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Toyota Financial Services, Highly Commended, Best Card Solution

Photo of Eleanor Hill and Jiming Chen

As part of a major effort to build customer loyalty, Toyota Financial Savings Bank (TFSB) launched the Lexus Pursuits Visa Card in 2005 and the Toyota Rewards Visa Card in 2008. This latest project builds on that successful implementation. The solution was supported by Axiom’s ‘matching logic’ software to create personal identification keys that enable measurement of loyalty at the customer level. The Analytics Group, led by Jiming Chen, could then deliver new analyses to management that point to enterprise-wide impact.

Photo of Eleanor Hill and Jiming Chen.

Jiming Chen

National Manager of Customer Analytics

Toyota Financial Services (TFS) is the finance and insurance brand for Toyota in the US, offering retail auto financing and leasing through Toyota Motor Credit Corporation (TMCC). TFS currently employs over 3,300 associates throughout the US, and has managed assets totaling nearly $89 billion.

“After launching the card, we coordinated and consolidated Toyota customer information, allowing measurement and analysis of repeat customer transactions at Toyota Motor Sales (TMS), TFS, and at the dealerships.” This brings clarity to the beneficiaries, and in turn allows for data-driven decisions on the strategic direction of the credit card business, and to leverage the cards to target loyalty initiatives for deeper and wider enterprise impact. For example, shortly after the Toyota card was launched, the global financial crisis struck. Many card issuers have since exited from the credit card business given the unfavourable macroeconomic environment. TFS was also evaluating which strategic direction to take. Had the credit cards materially enhanced customer loyalty to the brand as anticipated? Which members of the Toyota family were seeing most benefit? What other card initiatives could be taken to further increase loyalty and drive success?

Data security, privacy, and data integrity issues between the organisations were among the hurdles to overcome before any fundamental business strategy questions could be answered. Challenges included: internal data was housed by different business units at different locations with various formats and indexes; data was at the contract level, not an individual level; therefore, individual loyalty was previously never measured, analysed, or tracked; data was not consolidated or aggregated to address the credit card loyalty question.

Despite these issues, TFS recognised that analytics and data-driven decision making was critical to its success. And to provide the right information for executives to make the right decisions, TFS needed to integrate data from multiple sources, aggregate at the individual level, define loyalty, measure the loyalty, and analyse the business impact brought on by credit cards. With Axiom’s support, business intelligence built a customer data mart with a personal identification key that enabled measurement of the loyalty at the personal, customer level. Business intelligence also improved the data integrity to ensure the quality of analytics. “We then conducted further data integration, sampling, and statistical analysis to look for the answer. In the end, the collaborative efforts paid off and robust analyses were delivered,” says Chen. “A strong conclusion can be drawn that Toyota/Lexus credit card customers are twice as likely to purchase another Toyota vehicle or finance with Toyota Financial Services within a three year period. They also visit the Toyota dealerships more frequently during that time period, for example for vehicle servicing or to purchase parts and accessories.”

In addition, during the financial crisis, credit card customers were more likely to remain loyal and support the Toyota brand, while other customers’ behaviour followed the macroeconomic trend of reducing their purchases. “Furthermore, the results of this collaborative process have facilitated shared understanding and alignment between all parties – Toyota Motor Sales, Toyota Financial Services, Toyota Financial Savings Bank, and Toyota dealers. We can now directly evaluate the impact of any targeted loyalty initiatives to the broader Toyota ecosystem,” says Chen.

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