The Perspective 
Monday, 25 January 2010
In the financial services industry, our target audiences and their respective needs are so segmented that it makes customized messaging via traditional advertising and direct mail tactics expensive and difficult to justify. For a growing number of savvy financial institutions, however, an effective solution lies in a tool they’ve already deployed: their fleet of ATMs.
As convenience features on ATMs continue to evolve, financial institutions are taking advantage of new software applications for their own marketing and sales objectives. Through recent innovations in ATM software that work in concert with a financial institution’s customer relationship management database, banks and credit unions are realizing previously unheard of levels of return on investment for marketing campaigns that target the individual consumer through the ATM.
These “one-to-one marketing” campaigns enable flexibility in messaging, dynamic promotional offers, ease of customer (and non-customer) segmentation, speed-to-market, repurposed creative and the elimination of multiple print runs and call center support. Early adopters have realized response rates of 10 percent and higher for campaigns, far exceeding the 1 percent to 2 percent success rates of traditional direct mail campaigns, and at little to no incremental cost.
It’s all about the “long tail.” Chris Anderson, editor-in-chief of Wired magazine, first wrote about the long tail phenomenon in 2004 when he observed that our culture is increasingly shifting away from a focus on a relatively small number of high-demand products and markets at the head of the demand curve toward a vast number of niche markets in the tail.
The theory proved true in the example of online book retailer Anderson noted that while competitor Barnes & Noble carried 130,000 titles in an average brick-and-mortar store, more than half of Amazon’s book sales came from outside its top 130,000 titles. Anderson’s argument then became — in this reference, at least — “the market for books that are not even sold in the average book store is larger than the market for those that are. In other words, the potential book market may be at least twice as big as it appears to be.”
Anderson’s conclusion was “you can’t treat markets as large groups anymore, pushing stuff out that may be relevant only to a few. The natural shape of the demand curve is more niche-oriented than we ever realized.”
The long-tail approach, applying economics to marketing, has proven to be a success in the banking industry. Niche marketing through the ATM channel enables a greater response rate to campaigns at little to no additional investment.
Targeting a specific message to a smaller number of customers can have a huge payoff for financial institutions. And in times of economic crisis when marketing budgets are tightly scrutinized, it’s critical to have immediate and measurable payback with any new initiatives.
Playing off the long tail theory, modern ATM software now enables niche, one-to-one marketing by allowing a financial institution to customize promotional offers and campaigns by very specific customer segments. Depending on the level of sophistication of a financial institution’s CRM system, applications can be executed that call attention to an expiring certificate of deposit, a happy birthday wish, a late mortgage payment notice, a checking account promotion to a non-customer and countless others.
With newer, higher quality screens and greater design functionality, financial institutions wanted to take advantage of the medium for marketing. Initial implementations were static, non-interactive brand messages on-screen. They were predominantly banner ads promoting online banking or a community event the financial institution was sponsoring.

It wasn’t truly one-to-one marketing, but rather a way to get accustomed to the channel and what was possible.
More recently, the focus shifted to getting new customers into the bank. Customer satisfaction enhancements, including the ability to personalize transaction screens for individual customers, such as language preference, receipt or no receipt and fast cash settings, came next. Financial institutions also used the ATM to improve consistency in brand look and messaging with its online presence and other marketing campaigns.
Successful efforts include:
Credit card promotions. A customer can accept a credit card offer right at the ATM screen and the legal verbiage can print directly on the receipt. For financial institutions this means tremendous cost savings in addition to a greater response rate. Eliminated is the time and expense of a direct mail campaign and its associated printing and postage costs. Financial institutions can also be faster to market with the campaign since it can be deployed to an entire ATM network at the push of a button. Improved, as well, is the time required to process forms when the customer responds to a mailing. Most impressive, response rates for marketing at the ATM have proven to be 10 percent and higher versus traditional direct mail at 1 percent to 2 percent.
Customized offers. Within the credit card campaign, parameters can be pre-set inside the financial institution’s customer database to present a specific, customized offer.
The technology can also:
• Detect customers whose CDs are about to come due to receive a message during their next ATM visit with renewal rates or an offer to move that money into a different product;
• Identify users who fall into a particular age demographic to be presented with an offer to apply for a student loan;
• Target ATMs located within a sports arena to show a promotional offer for sports tickets or an opportunity to apply for a credit card featuring the logo of the cardholder’s favorite team.
Dynamic promotional offers. With one-to-one marketing at the ATM, financial institutions can detect a need one day and deploy a campaign to address it the next. And campaigns can be measured and analyzed on a real-time basis. An example is a financial institution that wanted to determine the tipping point for the incentive needed to convince non-customers to accept a specific checking account offer before it rolled out the program en masse. The offer ran for three days rotating three different cash incentive offers, $100, $150 and $200. After the campaign ended, it was determined there was no discernable difference between the number of consumers who accepted the offer when it was $150 compared to when it was $200, so $150 became the offer for the broader campaign.
Marketing to small businesses. ATM cards tied to a business checking account can trigger cross-selling opportunities, such as mobile banking or remote deposit. Offers can be as simple as “click here to learn more about our mobile banking solution,” which, when clicked, would feed the contact information into a database for a call center to follow up at a later time to close the sale.
Generate advertising revenue. Financial institutions can co-brand the ATM screen with local restaurants or other small businesses and generate advertising revenue. Messages can be as timely as that day’s lunch or dinner special.
Community relations. Financial institutions can further embed themselves in the community by promoting their involvement with local charities, and they can post timely public service announcements, such as missing child notifications.
One-to-one marketing campaigns at the ATM are only limited by the robustness of the financial institution’s CRM system, and the ROI has proven to far exceed traditional marketing methods.

Lewis is the director of global marketing for North Canton, Ohio-based Diebold Inc.
Posted by: Keith Lewis, Diebold Inc. AT 09:04 am   |  Permalink   |  0 Comments  |  

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