SunTrust Bank

Suite of Claritas data help provide insight on bank's marketplace

The Company

SunTrust Banks, Inc., headquartered in Atlanta, Georgia, is one of the nation's largest commercial banking organizations. As of March 31, 2005, SunTrust had total assets of $164.8 billion and total deposits of $107.5 billion. The company operates an extensive distribution network primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia and the District of Columbia, and also serves customers in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the company provides credit cards, mortgage banking, insurance, brokerage and capital markets services.

The Challenge

SunTrust marketers were challenged by senior management to develop relevant market research data that would assist the Strategic Integration Committee review strategic plans. To do so, they developed a strategy that combined Claritas data with SunTrust internal information and focused on three areas:

• Market Size and Growth
• Market Composition
• SunTrust Market Position

The Case

Using a suite of data products, including the iMARK site analysis software, Integras Market Audit, an annual financial services survey, and P$YCLE, Claritas' financial services segmentation system, SunTrust compiled a wide range of important information for each of the three areas, covering the years 2000 to 2003 and 2003 to 2008. Here is a sampling of what the data showed:

Market Size and Growth (data provided by iMARK)

• Households
  Over a five-year period (from 2003), the number of households in the SunTrust footprint was projected to grow at an average annual rate of 1.8 percent. This was slightly lower than the estimated 1.9 percent annual growth rate that occurred from 2000 to 2003.
• Non-mortgage Loans
  The total market for non-mortgage loans within the footprint was estimated to be over $200 billion.
• Deposits/Investments
  The total market for personal deposits within the SunTrust footprint was estimated to be nearly $500 billion. The market for personal investments within the footprint was estimated to be over $900 billion.

Market Composition (data provided by Market Audit)

• Distribution of Households & Non-Mortgage Loan Balances
  Nearly 70 percent of all footprint households fell within three of the high end P$YCLE groups: Upper Affluent, Lower Affluent and Mass Market
• Distribution of Deposit Balances & Investment Dollars
  The Wealth Group, which is the top P$YCLE group, accounted for only three percent of households, but 22 percent of deposits and 43 percent of investment dollars.

SunTrust Market Position (data provided by Market Audit)

• General Penetration (a client’s response to the question: What financial institutions do you currently do business with?)
  SunTrust’s general penetration was about half of the market leaders
• Primary Penetration (Primary Penetration represents a client's response to the question: What is your primary financial institution?)
  SunTrust ranked third in its footprint in terms of primary penetration.
Primary Penetration by P$YCLE segment showed that some banks focused on upper segments, while others were more clearly targeting the middle market.
• New Account Share – Measured by five product categories – checking, savings, loans, lines of credit and mortgage loans – the data showed, in part, that the market leaders tended to perform above most banks in all categories but varied in how well they competed in each product segment.
• Share of Wallet – Using the same product categories as above, SunTrust learned that SunTrust skewed toward the high end of the share of wallet ranges in most product categories.

The Results

Reviewing market growth, segment growth, segment primary penetration, and segment profitability suggests that SunTrust learned it could not meet overall corporate growth goals in the consumer marketplace by simply extending current trends. The future lies not just in growth, but also in capitalizing on the growth of key market segments where significant opportunities exist.