Chase Using Customer Data Base for Marketing

By Nathan, Sara | American Banker, April 13, 1998 | Go to article overview

Chase Using Customer Data Base for Marketing


Nathan, Sara, American Banker


Chase Manhattan Corp. hopes to score with small businesses by using a data base similar to the one it uses for credit card marketing.

"We wanted to understand small-business owners and their needs better than any competitors," said Joseph Scharfenberger, executive vice president for commercial and professional banking. "The only way we can do that is by using all this information."

New York-based Chase has compiled a data base on its small-business customers and is using the information to predict which are more likely to want particular products.

Though such data bases are commonplace in consumer banking, they are still rarely used for marketing to small businesses, said Linda Soldatos, Chase's senior vice president for information and technology management.

Mr. Scharfenberger and Ms. Soldatos got the idea for the data base marketing method from Chase's credit card department, where they worked before the 1996 merger with Chemical Banking Corp.

Chase, which has $365 billion of assets, uses the small-business data base to identify prospects, target direct mail offers, and issue pre- approved credit, Ms. Soldatos said. So far, Chase has been able to reduce its small-business direct mail costs by as much as 25% while generating the same number of responses, she said.

The primary difference between the use of a data base for credit card marketing and for small-business banking is that the bank tries to sell entrepreneurs more than one product, she said.

"Business owners don't want you to look at them as product users, they want you to look at their overall relationship," she said.

The direct marketing technique is similar to one pioneered by Wells Fargo & Co. in 1995 when it began mailing pre-approved loan applications to small-business owners nationwide.

Since then, PNC Corp., First Union Corp., and Banc One Corp. have been mailing loan applications to small-business owners.

But Ms. Soldatos said Chase is interested in more than loans.

When it began developing the data base in 1996, Chase compiled information on all the customers with deposit accounts, added borrowing information, then added investments. Last month the bank finished adding information on small-business insurance to get a complete view of the customer's relationships.

Chase also analyzed whether customers choose to interact with the bank through branches, a call center, or via PC banking. The bank plans to increase its promotion of its PC banking program to likely users.

Small-business data base marketing began at Chase when branch employees were handed a list of longtime customers that used a variety of services. Branch managers were asked to check whether those customers had other banking needs, Ms. Soldatos said.

One of the customers the bank identified was Robert Levy, whose family's linens store had banked with Chase for at least 90 years. The local branch manager called Mr. Levy and offered a term loan to replace a revolving credit line. …

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