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Banking & Finance

case study

Credit Card Cross-Sell

Business Challenge
A major regional financial services company conducted an enterprise-wide CRM analysis, which showed that its current credit card penetration within the bank customer base was less than 10% significantly below the industry average. Merkle was asked to lead the charge to develop a strategic solution to cross-sell credit cards to the existing retail bank customer base.

Guided by a shared vision for growth, Merkle constructed a strategic roadmap to determine the key steps for creating a comprehensive cross-sell program. Short-term and long-term acquisition plans clearly articulated the strategic theme for each step, from audience selection to targeting, messaging to offer tailoring, and pricing to media and channel optimization. The ultimate business goal was to deepen portfolio penetration while optimizing risk and revenue trade-offs.

Sample Credit Card Cross-Sell Strategy Map

Goals Acquire Accounts Audience & Modeling Targeting & Optimization Manage Risk Measurement & Reporting Increase Protability Channel & Frequency
Test media & channel mix by segment

Strategic Theme

Creative, Offer & Message

Customer-centric, highly offer-driven communications by segment Test offers by marketing segment: - Revolver - Transactor - Student - Small business

Identify profit potential Random mailing across Measure the impact of model for non-card consumer & small profit & segmentation households business to support models building product response models Build segmentation tool to identify likely transactor & revolver for consumers & small business Build product-specific response models for consumer & small business post random campaign mailing Build ITA models based on insights from original prescreen solutions Validate TRIP segment Build baseline with random mailing performance for account performance transactor & revolver segment offers

Test frequency & cadence by segment


Measure impact of product offer, frequency, cadence & key profit driver tests (incentives, creative, etc.) High-level monthly reporting focused on the following: - Applications - Accounts - CPIA, CPIH Quarterly deep dive

Test impact on Bonus points are the performance during primary offer for typical holiday periods currently enrolled customers

Use PURLs to deliver offer-driven landing pages that motivate response & capture customer behavioral data

Today, many credit issuers adopt a standard payments behavior segmentation framework, splitting cardholders into four key categories: transactor, revolver, inactive and paydown (also known as TRIP). However, the industry has stopped short with this internal, one-sided, behavior approach. Merkle has developed a total payments framework to not only evaluate internal on-bank TRIP behavior, but also predict external off-bank TRIP behavior. Such an approach is critical for tailoring offers and messaging to meet the right customer needs.

Existing credit card portfolio diagnostics

Prole on TRIP & value segmentation

Identify key retail-bank attributes

Predictive Modeling: Prot & TRIP behavior model

Balance Targeting: Protable revolvers & Transactors

After initial in-market testing, net booking models can be built to optimize future campaign targeting and communications strategies.

Phase 1

Mail random test campaign

Campaign Performance: Collect response data

Modeling: Predict transactor & revolver accounts

Integration Campaign Solutions: Efficiently targeting high-prot cross-sell households with a credit card that enables predicted card behavior

In order to acquire the most desirable prospects, Merkle developed an advanced statistical modeling solution to predict prospects profit potential. The model is based on a combination of various customer attributes, such as retail bank product ownership, transactional behavior, risk profile from the credit bureau, industry-wide segmentation, demographic data and other third-party consumer intelligence, such as Merkles wealth index and estimated home value. Merkle also built a linear regression model to predict potential credit card profit. The outcome will facilitate prioritization for campaign selection. However, selecting the right target was only half the solution. In addition to the profit model solution, Merkle also developed a transactional behavior determination based on a multinomial segmentation model to predict a prospects payments pattern.

Merkles predictive models enabled the bank to target the most valuable prospects and extend the most relevant offers. With the right combination of their internal financial and behavioral data, credit bureau and market-wide customer intelligence, the predictive model solution scored a significant lift in identifying potential prospects who are more likely to be higher profitability accounts. Model Performance: Actual Versus Predicted
$80 300 320

Phase 2

Modeling Sample
220 173 240


Expected Prot


129 82 55 35 17



80 4 9 -15 10 -80

$0 1 $20 2 3 4 5 6 Predicted 7 8



Will Bordelon

Sr. Vice President & GM, Banking & Finance 443.542.4009

Merkle, a customer relationship marketing (CRM) rm, is the nations largest privately-held agency. For more than 20 years, Fortune 1000 companies and leading nonprot organizations have partnered with Merkle to maximize the value of their customer portfolios. By combining a complete range of marketing, technical, analytical and creative disciplines, Merkle works with clients to design, execute and evaluate connected CRM programs. With more than 1,700 employees, Merkle is headquartered near Baltimore in Columbia, Maryland with additional offices in Boston; Denver; Little Rock; Minneapolis; New York; Philadelphia; Pittsburgh; San Francisco; Hagerstown, MD and Shanghai. For more information, contact Merkle at 1-877-9-Merkle or visit

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