Ameritrade Holding Corporation is a pioneer of the online brokerage industry with a 25-year history of providing a customer-focused approach to brokerage services. The company provides brokerage and clearing services to self-directed individual investors and financial institutions through its subsidiaries.

Ameritrade, Inc. is a leading online brokerage firm and received Money magazine's highest five-star overall rating (Best Online Brokers, June 2000). Ameritrade, Inc. sits comfortably at the top of the Keynote Consumer 40 Internet Performance Index (March 19, 2000 ­ present), which tracks home-page loading speed.

Ameritrade, along with several other major competitors in the online brokerage industry, planned to dramatically ramp up spending on advertising in late 1998. Acquisition of new accounts was, and still is, a focus of the industry as a whole. However, Ameritrade realized existing customers were a source of new accounts through referrals and additional accounts. Dissatisfied customers negated much of the advertising budget through negative word of mouth and attrition.

Simply stemming any and all attrition was not the answer. We realized that the Pareto Principle is easily recognizable at Ameritrade. We were in the 80-20 mode when comparing the percentage of revenue to the percentage of customers. We also realized that the 20 percent of customers generating most of the revenue can be a moving target. We needed to better control the identification and communication process to enhance our success in keeping those 20 percent generating most of the revenue. Selectively responding to customers based on their value (or their potential value) to Ameritrade was a requirement along with learning what types of customers were leaving, why they wanted to leave, where they were going ­ if anywhere, and why they chose a particular competitor. This information helped to identify which competitor's advertising campaign was most effective at luring our customers away. Through effective analysis and customer contact practices, we felt we could selectively improve retention and maximize the activity of customers with potential. In short, it was imperative that we did everything we could to effectively and fully meet the needs of those customers with the greatest positive impact to our bottom line.

Ameritrade approached Paradigm Solutions to assist in the creation of a system that would identify, analyze and assist in the contact of customers that had announced a desire to close their accounts. Paradigm Solutions responded by tailoring their existing Enterprise Intelligence Suite to Ameritrade's needs. Ameritrade and Paradigm partnered to implement a solution that has provided valuable strategic insight, as well as a tactical system that has allowed us to keep more valuable customers while letting some of the less profitable customers go to our competitors.

Much of this was accomplished in less than three months due to the existence of a robust data mart, a dedicated team from Ameritrade with executive support and Paradigm Solution's flexible application suite. With the assistance of industry leaders such as Paradigm, Ameritrade has successfully implemented a decision support system for each portion of the overall solution. Our ability to effectively partner with Paradigm, along with their willingness and ability to tailor their existing CRM tools to meet our business objectives and operating infrastructure, has resulted in significant success.

Leveraging customer/business intelligence adds a new dimension to company/customer interaction. It actually creates a synergy between sales, marketing and customer service. A customer relationship management strategy doesn't have a start and end date. It is a process that puts customers at the center of business activities. It is important that senior management understands this principle, commits the required resources and sticks with the program. It is also important to partner with a flexible technology provider. Companies need to measure results, make appropriate modifications and continually improve the process.

Ameritrade has seen substantial revenue savings since the implementation of the system. We have not only met the projected ROI, but significantly exceeded it. We continue to look to this system to help selectively lower attrition in the future.

Ameritrade's focus on systematic CRM processes combined with our partnership with Paradigm Solutions has resulted in better-than-expected success. We have learned that analytical technology (i.e., turning information into intelligence) and disciplined customer contact practices are requirements for effective one-to- one marketing and customer care. We have initiated CRM activities and measured the results. We have proof that it works.

Paradigm's Enterprise Intelligence Suite offers analytical and process automation tools enabling the effective execution of CRM strategies. Paradigm's integration of customer, category, channel, campaign and competitor data marts combined with the Enterprise Analyzer module allows for vital information analysis and meaningful customer interactions. Their suite of seamless and intelligent e-business solutions offers an online data warehouse, ad hoc OLAP data mining and one-to-one customer contact tools. This full suite of CRM services is offered via licensed technology and ASP modules.

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