KeyBank: Organizational Alignment

1. KeyBank: Organizational Alignment

2. MarketSpaces Value Proposition • Special needs requiring customized solutions and advice across a broad product array. Large Corporations Business Model Communication Middle Market Delivery Service Product Small Business High Net Worth • Standard solutions for most problems but with the option of a custom solution on occasion. • Process • Technology • Human Capital Emerging Affluent Mass Market Client-Focused Approach

3. Resistance to Segment Approach - Silos Retail Banking Consumer Finance Small Business Investment Management Segment Assessment Matrix Growing Families High Young Transitionals $$$ $$$ Low Demand $$$ $$ $ $$$ Client-Focused Approach KeyBank decides to take a segment focus Based on new corporate priorities…. “I want KeyBank to be at the forefront…of a movement away from an obsession with selling products to one that emphasizes meeting client needs.” A Mandate From Above Henry L. Meyer III CEO KeyBank It becomes incumbent on Marketing To demonstrate the value of this approach Value Marketing Creates Believers “To bring our segmentation efforts to fruition, we had to find a way to prove the value of segment-focused customer initiatives across the organization.” Chief Marketing Officer, KeyBank

4. Segment-based initiatives are consistently Screened by the senior leaders of KeyBank’s product and functional areas. Thus, each “winning” initiative is likely to be accepted by all product organizations. Executive Operating Committee Client-Focused Approach A Transparent Evaluation Process Creates Buy-in for Segment Investments Segment Initiative Competition* • Initiative Screening Criteria: • Yields X percent projected ROI • Provides a sizeable opportunity • Addresses a specific segment priority • Delivers an enhanced segment experience • Aligns with corporate priorities • Executed on appropriate time horizon Prework Segment Initiative Brainstorming Stage 1: High-Level Benefit Hurdle Stage 2: Business Case Hurdle Stage 3: Pilot Results Hurdle Fully Funded Initiatives Segments Initiatives that are obvious “ no’s” are killed by the EOC before any large-scale analysis Monitoring pilot results lowers Uncertainty around segment- investments and generates Organizational momentum Finance standardizes and Tests assumptions in order to Establish financial objectivity Grow Maintain Value Approach Control Cost Control Risk

5. The Key to Success Winning initiatives build cross-business support for increased segment-based investment…. …and encourage KeyBank to expand the breadth and scope of the program Marketing Budget Allocation Next Steps for KeyBank Illustrative KeyBank is Increasing the Portion of the Marketing budget Allocated to Segment-based initiatives Segment Champions – KeyBank is Appointing full-time segment managers to head each segment team Percentage Project Manager Pool – KeyBank is creating a pool of project managers to Implement segment initiatives 2003 2004 2005 Segment-Related Marketing Spend All Other Marketing Spend Incentives – KeyBank is planning to link segment teams’ incentives to segment initiative success Show Them the Money “Quantifying the financial impact of segment-focused initiatives In our growth and differentiation strategy has led us to Reallocate substantially more of the marketing budget to These efforts.” Chief Marketing Officer, KeyBank

6. Strategy& Developers by Market Space Analytics and modeling Database Marketing Reporting Technology Support Making it happen Field Marketing CMO LOB Marketing Media Implementing a structure to enable human capitol development to go deep as well as wide enables evolution. Reporting to the CMO assists empowerment.

7. Appendix

8. Tools that Support a Client Focused Approach: Decision Engine Environment Demand Segmentation Customer Integration Models Lead Distribution (AOM) Channels Affinium Suite Campaign & Optimize EDW CDM Value Segmentation Reporting and Analytic Environment supported by MicroStrategy and Consumer Extracts Contact History Direct Marketing Initiatives Prospect Database Service Guidelines Business Rule Registration Tool Market Space Decision Engine - DE Mail OTM Householding Desktop Triggers ITM Channel Optimization OBI Email

9. Raw Data SAS ETS Application of Modeling Techniques SAS E-Miner Regression Final Models Tools that Support a Client Focused Approach:Marketing Performance Optimization A system of models using complex mathematical & statistical relationships. Primarily employs Neural Networks, Time Series modeling and Regression techniques. A set of self-training models which continuously improve with time. Data Exploratory Data Analysis (EDA) Engine Analysis Input Files SPT Time Series ARIMA Scenario Planning Tool: An interactive, web-based software interface that allows marketers to propose different “what if” scenarios and projects the related results in terms of balances, EPA, and accounts. Neural Nets CHAID Cluster Analysis