What is Event Driven Marketing?

Traditional marketing in financial institutions

is based around pushing products to
customers based on a statistical
assessment of their likelihood to accept
such an offer (Product Push).

Author – Ajay Kelkar

e-mail - ajay.kelkar@cequitysolutions.com

© Copyright 2008 Cequity www.cequitysolutions.com 1

 Index
About EDM? …3

Evolution of EDM …7

Benefits of EDM …9

About the Author ..11

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1
About EDM?
What is Event Driven Marketing,
really?
Event Driven Marketing (EDM) has come as a
breathe of fresh air for financial institutions.
Offering the ability to access customers through a
"pull" strategy, EDM is relevant instantly as it
meaningfully assimilates to a customer's need.
While traditional methods use a "product push"
strategy based solely on statistical assessment
and repeated campaigns that result in very low
conversions, EDM uses valid, concrete data to up
sell products during a short, but focused time
frame. EDM uses existing data from a customer's
background and transactions to analyze and
predict precise moments to offer specific
products. Simply put, instead of conducting a
campaign based on the marketer's sales
objectives, an Event Driven approach is focused
more on the customer's need and how that Bank
can satisfy this.
With EDM's ability to create pre-defined business
value through detailed customer interaction and
behavior, financial institutions are reaping the
benefits of EDM driving value-producing
interactions that can even be customized for
individuals. As more banks follow the trend of
expecting better and concrete ROI, EDM
technology has proved its worth by recovering
costs in very short periods of time.
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“ EDM is relevant instantly as it
meaningfully assimilates to a
”
client's need.
But still, how exactly does this system work? By
adapting a number of technology-enabled
communication tactics to the existing CRM
process within a financial institution, EDM
literally keeps a tab on the pulse of every
individual's activities. Looking for certain triggers
or specified conditions called 'events', EDM
effectively throws up opportunities to contact the
customer with 'event' specific sales, service
information.
In EDM terms, an 'event' is a relevant and
significant occurrence in a customer’s life and is
only specific to that particular customer. An
example might be the birth of a first child. At this
time, the parents most likely re-assess their
financial situation to cater for these new and
changed circumstances in the family. They may
consider taking out insurance, making a will,
moving house, purchasing a different car,
opening an account for their child (to hold the
monetary gifts received from family members),
etc. Thus, if a bank could determine an Event
such as this in a customer’s life, this would
represent an excellent opportunity to contact the
customer in order to offer appropriate products
and services. That said, 'events' are not just for
sales opportunities and can also be used to find
many kinds of significant occurrences such as
Attrition, Risk and Service.
3
 There are four distinct levels at which EDM can
function: simple, complex, real-time and
sophisticated. At every successive level there
exists an increased event complexity and an
increased data detail requirement, yet each
successive level tends to yield ever-higher
specificity and actionable customer insight.
Simple Events
Simple events are data thrown up by basic
queries or conditions. An example would be
"everyone that purchased a new refrigerator
yesterday." With this data at hand, specific
communication can be sent out to all that meet
the criteria. This type of event is driven by
scheduled segmentation schemes and usually
run on a monthly basis as time is not critical for
the execution of simple events.
Examples of simple events include product
purchases, age thresholds, birthdays, address
changes or purchase thresholds. While on the
surface they appear intuitive, these 'simple
events', when coupled with relevant
communications, can deliver double-digit returns
on marketing activity.
Complex Events
Slightly more complicated than 'simple' events,
'complex' events are necessarily a product of the
marketing team working with the IT team.
Complex events are based on marketing
responses to changes in customer behavior over
time. This activity consists of leveraging the data
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you have about your customers to understand
behavior trends over time. For instance, you
want to know whether certain customers'
spending or other activity is increasing or
decreasing. Complex events also require a level
of knowledge about the data, so even though
defined by marketing, the execution might
require a user who is technically capable,
someone know better as a 'power user'.
Real-time Events
Real-time events fall under 2 categories -
session-specific and non session-specific.
Normally associated with online/web-based
interactions, 'session-specific' real-time events
tend to setup up-sell or cross-sell messages in a
normal transaction. For e.g. while shopping for a
PC printer online, a customer is delivered an
additional offer for paper and ribbons - relevant
products attached to the principal product
purchased. The purchase "event" is driven from
a predefined product profile or bundle that might
reflect "items that other customers have
purchased who also purchased this product".
In a 'non-session-specific' real-time event, a
customer who visits a bank website to check
mortgage rates for refinancing, within a very
short span of time, while interacting at an ATM,
receives a message about attractive financing
options. This could be followed by a phone call
from a personal banker with a personal
mortgage package offer. This kind of 'event'
enables the marketer to combine it with
4
 additional information from the data warehouse
and responding with an enhanced offer back to
the customer. This response could occur on the
same channel, in a different session, or on a
different channel.
All four of these event categories, in combination
with each other, create a sustainable competitive
advantage that will protect customer asset base.
The Event Driven Marketing process can be split
into three areas of effort

Sophisticated Events
Being the highest level of EDM complexity,
'sophisticated' events are defined and initiated to Detect the Events
find patterns or specific circumstances that Detected at an individual
indicate a significant change in an individual's level based on the
situation. They enable marketeers to find
significance to that
Event Driven Marketing Process

individual
carefully calculated opportunities to
communicate with individuals. Sophisticated
events might include this banking scenario:
Find the Best Leads
"Notify me any time that someone withdraws
This requires the ability
180% more than his average withdrawal amount to filter based on
over the last 12 months." This scenario reflects a recency, best offer and
significant change in an individual's situation. channel limiting
These are questions asked daily, scheduled
queries of all of the detail data in your data
warehouse that find changes in customer
Communication with
the Customer
behaviour over time that represent opportunities
This requires a Multi-
to communicate with that individual. step, Multi-channel
Dialogue

Simple
Business Value

Complex Fig 2.0 Event Driven Marketing Process

Real Time
Sophisticated
So what's the bottom line on
EDM?
Complexity While traditional methods have yielded low
response rates between 2–5 %, and the bank
Fig 1.0 Complexity and Business Value increase as
Event Sophistication increases.

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 incurs and absorbs the costs/expenses, research
done on EDM showed that the average response
rates typically range from 20%-50%. Even with
such startling difference in results EDM hasn't
grown in popularity due to the presumed cost
factors attached. Only recently have specialists
and experienced strategists created frameworks
and systems that help financial institutions gain
access to this revolutionary method.

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2“
Evolution of EDM
Customers are unconscious
diarists of a portion of their lives.
Every account in your books is a
record, more or less graphic, of
the financial history and progress
of the customer, contributed by
himself.
” himself.”
Event data in banking, for long, has always
been an insight into the financial situation of
a customer. Bankers before, would sit
everyday reviewing their customers'
statements posted on that day to try and
assess the financial situation their customer
might be in. Only recently, with the advent
and extensive use of technology
automation, have great strides been taken
into accessing data more extensively and
methodologically.
As early as 1885, George Rae wrote in “The
Country Banker”, “In the case of people who
bank with you, you have in your ledgers a
record which will enable you, in many
cases, to check and rectify the estimate of
their means and position which is current
out of doors. A man’s bank account will not
necessarily disclose what he is worth: but its
entries, debtor and creditor, will serve as
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tracks to indicate with some degree of
clearness the line of progress along which
he is moving towards either failure or
success. Your customers are unconscious
diarists of a portion of their lives. Every
account in your books is a record, more or
less graphic, of the financial history and
progress of the customer, contributed by
In the automation of banking processes in
the 1960s and '70s, some basic event
management was often included. For
example, standard branch reporting often
included a list of large credits paid into
customers’ accounts. This information could
then be used for limit management or
marketing purposes. However, it was the
introduction of large decision support
databases and data warehouses in the
1980s and ‘90s combined with the
development of sophisticated marketing
solutions that exploited this technology that
led to a massive increase in the extent and
complexity of event management in the
banking industry. The traditional approach
to database marketing involves the creation
of campaigns that generate a large number
of solicitations to customers or prospects.
The expectation is that a small but
significant portion will respond positively
7
 and eventually take-up the product offered.
Most of the development in this area has
revolved around the use of statistical
analysis to identify segments of prospective
buyers who have a higher propensity to
respond and to buy the product concerned.
This push-based approach was considered
effective and economical to undertake and
continues to be the main mass marketing
technique in use in most large banks today.

However, with ever increasing customer

expectations and ongoing competitive
pressure, banks are starting to recognize
that the traditional approach to marketing is
becoming less and less relevant at meeting
their organization’s objectives. Increasingly
banks are considering whether a more
customer-centric, needs-based approach is
possible to enhance product sales and
customer satisfaction. At the same time,
banks are looking to gain greater efficiency
from their marketing investment and avoid
the huge volume of unsuccessful
solicitations which consumers consider as
junk mail and which have tended to
desensitize them to other, more relevant
marketing offers.

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3
Benefits of EDM
The biggest benefit seen with employing
EDM is that there is minimal wastage - of
time, effort and money. Instead of
conducting a campaign based on the
marketer's sales objectives, an Event Driven
approach is focused more on the customer's
need. Customers receive promotional offers
and service messages that are of interest to
them at the moment, and marketers avoid
the shotgun approach typical of most
campaigns.
In brief, EDM's benefits are:
• Improved customer experience
• Guaranteed brand reference
• Increased revenues
• Minimizing Attrition
• Maximize marketing opportunities
By providing the capabilities to meet each
individual customer at the point of need, turn
customer monologues into value-producing
dialogues and rapidly, if not instantly,
improve return on customer relationships,
financial organizations today are finding
more reason to change gears and consider
EDM to be a winning option.
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EDM creates avenues of dialogue
with customers by changing the
standard approach of "Bank’s time
to contact" to a "Customer’s time to
contact".
In addition to the impressive ROI it
generates, EDM is growing in popularity
because it offers financial institutions in
today's competitive scenario, the powerful
tools they need to manage customer
relationships in the right direction. For
instance, EDM empowers marketers to:
• Shape how the customer interaction
takes place, while the customer
determines the what, when, and
where.
• Engage each customer based on his
or her actual individual behavior and
interests rather than on a product
'push' marketing campaign or sales
promotion based on a targeted
segment.
• Fulfill the promise of CRM by triggering
helpful interaction with each customer
at the time that customer has implicitly
signaled a clear and specific need or
interest.
9
 To conclude and to summarize, the key
areas affected by the EDM approach are -
increased customer focus, satisfaction and
responsiveness, coupled with lower attrition,
lower costs along with increased revenue
and profitability.

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4
About the author
Ajay Kelkar, Co-Founder & COO of Cequity,
has over 17 years of experience in
customer-driven marketing across a wide
range of industries such as Soft Goods,
Banking & Financial services & Retail. A
well known & well respected analytical
marketing professional in India, he was the
head of marketing for HDFC Bank and was
responsible for building world-class
analytical marketing capability for the bank.

He has extensive experience in starting with

simple data-led marketing and scaling-up to
complex analytics based cross-sell, upsell
programs. He has specific expertise in
change management while implementing
CRM and has led the first Unica
implementation in India at HDFC bank -
ranked amongst the top 3 Unica customers
at the Customer Success Awards.

© Copyright 2008 Cequity www.cequitysolutions.com 11

 Disclaimer / Copyright
The information contained in this document represents
the views of the author on EDM in the existing market
scenario. It is exclusively for informational purposes
only. Parts of this document contain references to the
following publications: Enterprise Event Management
in Banks (Teradata), The Power of Event-Based
Marketing (Teradata), Affinium® Customer Alerts
Solution (Unica) and An overview of the Product Suite
(Eventricity). Complying with all applicable copyright
laws is the responsibility of the user. Without limiting
the rights under copyright, no part of this document
may be reproduced, stored in or introduced into a
retrieval system, or transmitted in any form or by any
means (electronic, mechanical, photocopying,
recording, or otherwise), or for any purpose, without
the express written permission of the author and the
above mentioned authors of the reference documents.

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