Long-term Brand Value In US Retail Banking

Deepening Analytics to Influence Recovery & Growth

A leading US retail bank, having recently suffered significant brand erosion in the aftermath of the financial crisis, was looking for a modeling methodology that would integrate insights from customer experience and brand tracking to help identify the specific perceptual challenges behind the decline.
- The aim was to build the business case for a better split of investment between brand building strategies, performance marketing and sales operations.
Whilst the bank had used MMM for years to successfully optimize local and national investments, it suddenly found itself facing an erosion in brand trust and allegiance and a massive change in baseline trajectory; one that was also impacting the efficiencies of short-term marketing.
Fortunately the bank maintained strong data streams, not just on short-term activities and sales but also on longer-term customer satisfaction at a branch experience level and consumer sentiment at a regional level.
Marketscience was tasked to identify which consumer perceptions were critical to restore, how much to invest to do so, and to inform programming impact as it rolled out.

The bank turned to Marketscience to leverage its proprietary and academically verified Dynamic Linear Modeling approach. This approach enabled the team to separate the impact of short term investments from underlying long-term trend changes driven by consumer sentiment. An additional Vector Auto Regression model was then able to identify the customer perceptions that had led to the long-term erosion in acquisition and retention.
- The modeling structure was designed to understand how marketing impacted new vs existing customers across the entire portfolio of products in order to assess both branding and halo effects.
Importantly, the methodology included time-based dynamic models AND critically for a national bank, the local vs national picture was also measured using hierarchical techniques, all in a fully integrated model.
- This approach ultimately permitted the balancing of investments between longer-term, national brand restoration and short-term sales and local programming using the Marketscience SimOpt tool.
Finally Marketscience implemented and supported a rigorous in-market test and control design to inform goal setting and ongoing campaign performance. This impact was measured both through ongoing Dynamic MMM updates and the Marketscience propriety Multi-Touch Attribution solution.

Post-financial crisis, the model was able to identify which consumer perceptions were critical to restore and would lead to baseline recovery. A focus on “trust” and “reliability” were critical, leading to a rebound enabled by a cross line-of-business, multi-product support strategy and investment guidance.
Ultimately, it was sustained brand investments using a more balanced mix of traditional and digital platforms which contributed to the effectiveness of key sponsorship and local programming. This helped grow boardroom appreciation and greater support of brand value and the resulting sales that led to a return of industry beating Marketing and Sales ROI with an 11% increase.