A major financial services client was sending out a direct marketing offer each month to customers who had been identified as having a high propensity to take out a loan – and who also met the bank’s credit scoring criteria. The problem was that the incumbent print manager was taking between 11 and 14 days to produce each monthly campaign. Add that time to the 5 days that it took the client to make the data selections and output them, and the 5 to 7 days Royal Mail would take to deliver the pack – and the offer would reach the customer over a month after the process was initiated.
There were two problems with this: competitors were getting an alternative offer in first, and often when a customer phoned up to accept a loan offer, their credit score had changed in the meantime. (Customers have their credit scores updated monthly.) This would mean that the bank was no longer able to offer a loan at the rate and terms contained in the mailpack, and sometimes had to withdraw the offer completely.
Brightsource were asked to apply ‘lean’ principles to completely re-engineer the campaign production process. By focusing on the value stream, it was obvious that building a more automated workflow which linked data processing and document composition, would eliminate many wasted steps and hand-offs.
This new workflow was built by Brightsource, and decoupled from the manufacturing process. Document output was switched from a proprietary format to variable PDFs, an industry standard. This had the effect of building much more flexibility into the supply chain – the variable PDFs could easily be pointed towards alternative manufacturing sites, giving much more production capacity when required. Not only did this reduce operational risk, it also gave Brightsource and the bank a much stronger negotiating position with manufacturing suppliers.
Efficiency and service improvements
This enabled Brightsource to achieve savings of 15% on production costs. And the removal of a host of unnecessary and wasteful process steps meant that the production time was cut to between 3 and 4 days – an improvement in speed to market of 66%. The benefits to the client included the virtual elimination of ‘disqualified’ calls to the bank’s call centre – allowing staff time to be more profitably employed. This also avoided the customer dissatisfaction that inevitably occurred when the offer of a loan is made, the customer calls to accept, and then the bank withdraws the offer or changes the terms.
Increased sales, better ROI
Sales of loans increased by 12%, partly through eliminating the ‘disqualification’ problem and partly through getting the offer to the customer earlier in their decision making process. Coupled with the reduction in production costs, there was a significant overall improvement in return on marketing investment – without taking cost efficiencies at the call centre into account.