To SANs Credit

Few companies know better than Premier Bankcard Inc. that sometimes you have to spend money to make money. Case in point: The credit card issuer has made back—and then some—the roughly $1.9 million it has devoted to a storage area network and business analytics project.

With rivals crowding consumers mailboxes with the latest credit card offers, Premier Bankcard needed to find a way to pinpoint and acquire high-value customers. In 2004—building on a project that started in 2001—the Sioux Falls, S.D., company put into play an ambitious, multivendor SAN strategy to support a highly available and centralized data warehouse.

By providing an analytics foundation that was stable and transparently scalable, Premier Bankcards Dave Geiver, vice president of technology, and Scott Erkonen, director of technology, hoped to fundamentally change the way credit cards were issued and to whom.

The results have been impressive so far. The SAN deployment played a big role in allowing Premier Bankcard to become the 14th-largest MasterCard credit card issuer and the 16th-largest Visa card issuer in the nation, according to Geiver. Using new analysis tools, Premier Bankcard employees are able to generate new and profitable business that today translates into an 8 percent yearly growth rate.

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The data warehouse expansion and SAN project has proved so successful that Premier Bankcard saw a $5.6 million return within a year after its June 2004 deployment and has a projected five-year cumulative benefit of nearly $63 million—or an annual ROI (return on investment) of 740 percent. The organization also estimates that it will realize a total five-year benefit per credit card analyst of almost $1.5 million.

"As we matured and grew to hit about 2 million credit accounts in our portfolio, we realized that we were going to have to do more analytics to sustain [our goal of an annual] 8 percent growth rate," Geiver said. "We werent talking about just doing mailings or Web sites, either. We wanted to really start to home in on our customers and on how to get to our customers with good, intelligent marketing. From an executive and organizational level, we knew wed have to invest heavily in people and in a platform to get us there."

Premier Bankcard offers secured credit cards to customers who are trying to establish—or sometimes re-establish—credit. The company was founded in 1989 with one manager and one employee. Today, the company has 2,500 employees and about 3.7 million active credit cards. The company adds roughly 160,000 new accounts each month, according to Geiver.

Next Page: The customer is always right.