Case Studies – Cheltenham & Gloucester, SAGA Good Hospitals

We begin our coverage of the best of the case histories from the 2005 Financial Service Forum Awards for Marketing Effectiveness with the winning entries from Cheltenham & Gloucester and from Saga Services.
The business challenge
Fixed-rate bonds are a popular choice amongst C&G’s traditional customer base. The company has had considerable success in attracting savers seeking a guaranteed return over terms of one, two or three years. The challenge faced by C&G came as each tranche of bond funds reached maturity. Before the introduction of the enhanced fixed-rate bond maturity mailing, customer balance retention was disappointing. Two key factors were identified:
• Mailing positioning: as the maturity date approached, customers received a mailing pack outlining the options available to them. It explained that, if no action was taken by the customer, the funds would default into an instant-access account.
• Customer reaction: customers purchasing bonds are known to be heavily influenced by the rate offered, but this was not adequately addressed in the mailing pack. Retention of savings business, including fixed-rate bonds, had already been identified as a key priority. With bond maturities leading to lost customer balances each month, C&G needed a solution – and quickly. To address this, the following objectives were set:
1. Enhance customers’ lifetime value.                                                                                                                                                                                                                                                                                   • Increase customer balance retention to a minimum of 60%.
2. Control operating costs.
• Maintain profitable margins.
• Contain mailing and fulfilment costs.
3. Improve customer feedback.
• Counter negative customer feedback about a cumbersome bond re-investment process and improve customer satisfaction significantly.
4. Increase staff engagement.
• Involve and enthuse branch staff to build stronger relationships with customers.
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