David Raab Article Archive

It’s more than 25 years since the first crude MCIF (Marketing Customer Information File) systems slithered from the primordial ooze onto bank marketers’ desktops. This means that these systems have been in banks and credit unions longer than most of the people who run them. And yet, nurse sadly, advice they (the systems, medical that is) are still rarely utilized to their full potential.

Part of the reason is that the potential itself has expanded. The original value of an MCIF system, which seemed miraculous at the time, was that it gave bankers desktop access to an integrated customer database. Before MCIFs, customer views were typically created by sending account files from different operational systems to an external service bureau, which matched the accounts into individual and household levels and returned printed reports showing statistical summaries such as product usage and average balances by branch. This happened maybe four times per year. It gave marketers some insight into their customers but little ability to reach them directly. At best, the bank could request a mailing list which would necessarily be based on information that was one or two months old by the time any promotion could reach the customers’ mailboxes.

Today’s MCIFs are updated monthly if not daily and can generate email lists that reach customers within hours of an important event. Even more important, MCIFs are often tied directly into teller platforms, call centers and customer management systems, giving front line users throughout the bank a complete view of the institution’s relationship with whomever they are currently serving. The MCIFs supplement this information with a history of previous promotions, recommendations for what to offer next, reports on current and potential profitability, and estimates of attrition risk. In other words, a fully deployed MCIF can guide both outbound campaigns and real time interactions, helping the bank to optimize the value of individual customers and of its entire customer portfolio. It (almost) goes without saying that the MCIF can also report on promotion results, provide detailed demographic profiles, support geographic analysis for branch location and regulatory compliance, and manage complex list selections for multi-product, multi-stage marketing campaigns. Some MCIFs extend still further to provide event tracking, contact management, sales incentive programs, marketing planning, referral capture, and even online surveys.

Granted, those are a lot of capabilities for any marketing department to fully exploit. Some functions require tight integration with other bank systems, which is beyond the marketing department’s direct control. But there are still many analytical and promotion opportunities that marketers can take advantage of all by themselves. And there are many more opportunities the MCIF makes available elsewhere in the bank, if marketers can convince other departments to take advantage of them.

So the challenge ultimately comes back to the marketers themselves: it’s up to them to make the best possible use of resources the company has invested in the MCIF. This requires a conscious effort to overcome obstacles including:

– lack of skills: making full use of MCIF capabilities requires new skills such as predictive modeling, customer profitability calculations, and optimization across products, channels and promotions. Fortunately, training is available from a wide variety of sources including vendors, trade groups and consultants. Marketing departments should set aside a reasonable portion of their MCIF budget for such purposes and ensure that staff makes use of it. If this is utterly impossible, consider outsourcing the MCIF operation itself to vendors who both know how to run these systems and can make intelligent marketing recommendations based on what they see.

– overwork: short-staffed marketing departments are already struggling to keep up with volatile economic conditions, regulatory changes and new electronic media. It’s easy to feel the last thing they need is still more projects related to their MCIF. But this has it exactly backwards. The MCIF helps marketers to solve these other problems by letting them work more efficiently and effectively. Not learning to use the MCIF properly is like not learning to drive a car because you’re too busy looking after your horse and buggy.

– inadequate infrastructure: some potential sources of MCIF information are inaccessible or contain such dirty data that they cannot be properly integrated. At the other end of cycle, connecting the MCIF to front line systems may be difficult or impossible due to the front line systems themselves. Changing the infrastructure is a long-term project that is beyond the direct control of marketing. But marketers can play a critical role by convincing other managers of the benefits to be gained from such an upgrade. This involves both explaining the capabilities that MCIF integration would add to other systems, and, more persuasively, calculating the financial returns that such integration would produce.

– company environment: top managers will not fund infrastructure upgrades or the MCIF itself unless they accept the fundamental importance of properly managing customer relationships. It’s up to marketing to act as the ‘voice of the customer’ within the organization, illustrating how failure to focus on customer needs ultimately produces undesirable results. This isn’t as simple as it sounds: many banks have a ‘product culture’ that conflicts quite directly with a customer-centered approach. Marketers need to show how these two perspectives combined can produce better results than a pure product focus. Again, the MCIF will provide critical data necessary to prove this is the case.

In short, today’s MCIFs are fantastically powerful tools that far exceed the capabilities of their early ancestors. But, like any tool, they will only deliver value in the hands of users who acquire the skills and resources to use them well.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.