The Royal Bank of Scotland:
A Successful Implementation of Marketing Technologies

Executive Summary

Best Practices in Marketing Technologies Company The Royal Bank of Scotland Provider Chordiant Date of Implementation April 2001 Featured Marketing Technology Marketing Campaign Management Featured Return(s) Enhanced targeting and coordination of campaigns and event triggers to customers, resulting in approximately 25% higher customer response rate “Quotable Notables” RBS deployed Chordiant’s Marketing solution because it believed it provided the best approach to support the level of automation it required at each communications touch point.

With increased consolidation in the financial services and banking industry, large institutions are getting even larger and requiring new and innovative strategies to fend off the competition, create growth opportunities, and contribute to the bottom line. Customer relationship management (CRM) systems have helped many banks improve their ability to sell to, market to, and service customers.

The latest marketing technologies also support campaign optimization, individual customer communication and event planning, cross-channel management, and a high-touch experience based on personal and contextual knowledge of the customer. The value proposition of such technologies increases for banks that want to compete based on their ability to deliver high-quality, personalized care to every customer.

When The Royal Bank of Scotland (RBS) examined its business model and growing customer base in 1997, it found that its existing marketing system could not scale to meet its current and future business requirements. The Edinburgh, Scotland-based institution turned to PrimeResponse (acquired by Chordiant Software in 2001) to help it pioneer and implement a system designed to automate business-to-consumer (B-to-C) communications across all traditional channels—including direct mail, call center, advertising, and events—in an effort to improve the efficiency and reliability of the bank’s marketing communications and campaign con-tact management.

This Aberdeen profile briefly reviews how RBS worked with Chordiant (this profile will now refer to PrimeResponse as Chordiant) to implement an automation solution called Prime@Vantage (now Chordiant Marketing Director) to improve the automation and efficiency of campaigns and to integrate multiple channels at each communications touch point.

Issues and Challenges

Founded in 1727, the RBS Group is one of Europe’s leading financial services providers. By its market capitalization of £43.5 (2002), RBS is the second-largest bank in both the U.K. and Europe and fifth largest in the world. It employs over 111,000 worldwide.

The enlarged RBS Group has more than 18 million U.K. customers of its personal financial services and more than 2,250 U.K. branches. As of June 2002, the company had total assets of £397 billion (US$652.2 billion).

To manage its continual rapid growth and series of acquisitions, RBS continues to seek innovative methods and technology to make its existing products scale to handle growing employee and revenue bases and to integrate new marketing channels. To market to and service customers judiciously and with the highest possible care, RBS wants to enable its business representatives to access all of a customer’s information on one screen.

In the past, RBS used a largely paper-based in-house marketing system that required time-consuming marketing and business processes when it came to campaign planning and briefing (i.e., creating documents explaining targeting and campaign criteria and requirements). Much of the system’s records were restricted to the bank in which an interaction took place, meaning information in one location was generally inaccessible to staff in another. For a traditional bank where services were limited and customers always did business with the same branch, that approach might have sufficed. On-site bank personnel could fill in the gaps in the systems.

But the rapid growth of RBS and the increased mobility and sophistication of its target customers made this system inappropriate. Fundamentally, the bank’s existing system could not scale to meet its growing marketing and business requirements. Additionally, the bank needed a way to identify its most valuable customers regardless of where their primary branch was or how they contacted the bank. A customer record in a branch near the customer’s home could not support a transaction conducted at a branch near the customer’s workplace or one conducted by telephone.

Solution Objectives:

• Requirements that would allow the bank to understand and measure the impact of one campaign against another campaign, while also increasing the number of campaigns that could be run successfully at the same time
• Scale its marketing system to meet new customer management requirements and enable cross-channel, multitiered campaign and contact management
• Integrate among multiple database systems across the entire enterprise, which created an incomplete view of the customer and made it difficult to identify conflicts with customer communications
• Access and use relevant customer information held by its other financial partners related to the bank’s other business products and services.

Implementation

RBS deployed Chordiant’s Marketing solution because it believed it provided the best approach to support the level of automation it required. Also underpinning the bank’s decision to go with Chordiant was the fact that the Chordiant (PrimeResponse) team committed to a rapid implementation process. RBS first began deploying the Prime@Vantage marketing automation system in 1996 and upgraded from Prime@Vantage to Chordiant’s Marketing Director in April 2001.

Deployment

During the deployment process, RBS designed and built a new marketing data mart. This effort—independent of purchasing the Chordiant software and planned prior to the vendor selection—took four to five months. During the last four weeks, RBS implemented the Chordiant marketing application, tested batch processes with the warehouse, and conducted user acceptance and performance tests. The initial implementation took approximately 5.5 months.

Training and Operation

Training occurred two weeks prior to going live. A total of five people from the RBS marketing staff become skilled in the application. The Chordiant/PrimeResponse consultant remained engaged as RBS started to run live campaigns. After about six weeks, the RBS marketing team members felt confident enough to manage campaigns themselves.

According to RBS, “the learning curve was steep” and because expectations in terms of campaign complexity were so high, it took longer than expected for the marketing team to plan the initial campaigns and feel comfortable going live. When implementing new technology in the future, RBS indicated that it would start with a less complex campaign in order to speed time to operation and marketing optimization.

Outlook

RBS recently started using cross-channel marketing, including outbound call-center marketing, and hopes to integrate wireless and online marketing soon. Looking ahead, RBS plans to add tools for individual customer communication planning, with functions to personalize event invitations and trigger notifications to relevant customers across multiple channels.

Additionally, RBS is looking to implement tools that enable visibility across all campaigns “ahead of time”—providing a forward view of all campaign management activities—and allow the company to enter campaign and customer details 6 to 12 months before a campaign is launched. Finally, it plans to incorporate better statistical modeling and analytics tools into its overall solution.

Solution Results

In its effort to improve customer communication and the management of campaigns across multiple channels, RBS has identified several important objectives that the Chordiant marketing solution has facilitated (Table 7).

The Software Vendor: Chordiant Software

Chordiant Software (Nasdaq: CHRD) develops and implements CRM applications based on a modular architecture (Java). It targets its customer management solutions at global B-to-C companies in retail, financial services, insurance, telecommunications, consumer, and other industries that deal directly with very large customer bases. Chordiant serves businesses that have millions of consumer relationships where it is critical to balance the cost of servicing with customer value.

Table 7: Chordiant delivers results for RBS

Source: Aberdeen Group, February 2003

Chordiant developed Chordiant 5 to provide its customers with a comprehensive set of enterprisewide, process-centric, and dynamically driven role-based applications for managing marketing, selling, and service interactions with individual customers. Driven by the business process, Chordiant’s solutions provide an enterprise wide, real-time view of the customer at any touch point a contact center, retail channel, or self-service.

Built on the Chordiant JX Architecture, the Chordiant 5 suite consists of a fully integrated set of modular applications, including Chordiant 5 Enterprise Platform, Chordiant 5 Marketing, and Chordiant 5 Selling & Servicing. The Chordiant 5 Enterprise Platform offers an open, real-time, enterprise-scale platform that provides common business and application services. It integrates data and processes from existing operational systems and is leveraged by a suite of Chordiant 5 marketing, selling, and servicing applications. The platform reduces the total operating expenses of customer management by integrating with existing IT assets and automating end- to-end processes. Enterprises can quickly adapt to unique business policies and processes, integrating front- and back-office systems.

The Chordiant 5 Marketing module, used by RBS, helps B-to-C enterprises forge long-term relationships with their best customers by providing the tools to identify and retain the most profitable. It also allows companies to reduce marketing costs through more efficient operations, maximize returns through more effective campaigns, and react to market needs faster. Chordiant 5 Marketing offers an integrated suite of relationship marketing applications that supports customer interactions across traditional, online, and wireless channels.

Aberdeen Conclusions

Enterprises build successful and profitable relationships on precise and effective customer communication, mutually beneficial opportunities, and the ability to meet customer needs. By working together, RBS and Chordiant have demonstrated how a marketing automation solution can be used to achieve efficient cross-campaign contact management and also increase customer touch and care.

While RBS has made significant strides in reducing inefficiencies in managing campaigns, it also recognizes that it is not finished. The company continues to work with Chordiant to modernize and implement applications to address changes in business and technology and to fuel new opportunities. In the future, RBS hopes to increase the automation of event-driven campaigns and further integrate the marketing environment with downstream customer management.

RBS’s experience with Chordiant’s marketing solution demonstrates that marketing automation is a valuable tool in helping a company improve its bottom line (through increased operational efficiencies) as well as improve its customer planning and marketing process. It also shows that marketing technology can neatly tie into a company’s overall customer management environment to enable employees to become part of a larger and more effective, multichannel, customer-facing force. Like its competitors, RBS recognizes the need to implement modern technologies with demonstrated methodology to help it take advantage of new revenue opportunities and build efficiencies that add to the bottom line.

As a result of this research, Aberdeen considers Chordiant’s marketing solution an excellent choice for enterprises seeking to add structure and coherence to their campaign management and marketing process. Today, RBS is in a stronger position to meet customer expectations and improve its bottom line. As a result of Chordiant’s ability to meet RBS’s marketing technology and performance requirements, Aberdeen qualifies this implementation to be a part of Aberdeen’s What Works:Best Practices in Marketing Technologies.

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Copyright © 2003 Aberdeen Group, Inc., Boston, Massachusetts

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