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164 Managing Customers Through Economic Cycles

One top UK bank found that when they had sufficiently
developed information, cross-business-unit sharing, and
leadership support, their ability to implement numerous and
aggressive cross-selling initiatives skyrocketed. They also
found that the added information perspectives from many
business units caused the number of people who actually
responded and purchased products to quadruple.

Mastery and risk

Most organizations do not have the information competency
to accurately assess and then price for risk. Therefore, organ-
izations typically under-price the risky business and over-
price the less risky business. They also avoid very profitable
business, which may be inherently risky yet could be priced
appropriately for the risk with the appropriate level of infor-
mation competency.

One leading UK bank was avoiding writing certain
loans because they couldn’t price them accurately for the
level of risk. After they began to develop their informa-
tion competency, they were able to write higher-risk loans
without increasing the percentage of loans that went bad.

One very aggressive US insurance company found itself
avoiding the traditional high-risk segments of car insurance,
which was consistent with the industry as a whole. As this
organization developed its information competency, it was
able to aggressively target a segment of high-risk insurance
which had been ostracized by its industry. It is now one of the
largest sellers of car insurance in the industry with perform-
ance rates similar to companies insuring a lower risk pool.

Information mastery and marketing

Most of the organizations are able to obtain marketing
response rates of 1–3%. Organizations who begin to lift their