Content feeds can be banking’s path to personalization

Greater engagement with customers means greater loyalty, which in turn leads to greater customer lifetime value.

Matt Gillin, CEO at Relay Network, joins us to discuss how banking institutions can use content feeds to elevate customer engagement and increase personalization.

A few takeaways from the conversation:

  • Content feeds are powerful because they can target an individual and their preferences, making them part of a personalization initiative.
  • Nurture time is needed: A content feed becomes more personalized the more a customer interacts with it.
  • A personalized feed requires trust, which can be boosted by creating content that offers more to the customer than it asks of the customer.

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Below is a full transcript of my interview with Matt Gillin.

Matt, start us off, if you could, by telling us a little bit about Relay Network – how long you’ve been around, what you do, who you do it for, that sort of thing.

We’re a SaaS company based out of Philadelphia. We’ve been around for 10 years, and our mission is to solve the customer disengagement problem. We’re solving that problem for 110 different businesses across three verticals: banking, health care, home services. And about 75 million of their customers are engaging on our platform in a unique way every single day.

Knowing the complex relationship that people have with their money, what Relay does in the financial services space, is that a different challenge, say, compared to what you do in your other verticals – health care and home services.

What we’ve come to learn is that financial services, health, home services – every business and customer relationship today is really suffering from this disengagement problem. The problem itself in banking is not that different. The way that we solve it’s a little bit different. The types of relationship that you have with your health insurance company, your doctor is different than the relationship you have with your banker. When we talk about our technology and how we solve the problem, the outcomes that we’re driving through solving disengagement is different. But banks – what we love about banks, Terry – is they stand to gain as much as anybody on solving the disengagement problem. While the outcomes and the relationships are different, the solution is really the same.

This concept of engagement that you’re talking about – it’s one of those things that can differ in definition, I would imagine, from company to company, so when you talk about engagement in this context, about customers being engaged or disengaged with their banking institution, what exactly do you mean?

When you think about engagement, first thing that we do is we get people focused on disengagement. What you’re going to find there is what does disengaged mean? It means they’re not responding to your emails, they’re not actively logging into your portal, they haven’t downloaded your app. The first thing that we focus on are the ways that you can look at the disengagement of your customer. Clearly, people that aren’t clicking on emails or coming to your portals or downloading your app, they’re not engaged. The second thing that we then focus on is, well, what’s the cost of that disengagement? When we think about engagement and then disengagement, we look at the definition and then the cost of it. The fact of the matter is that disengagement is costing businesses a fortune in churn and lost opportunities for funding accounts, or cross-selling and upselling. Then the third thing that we look at when we talk about engagement is the difference between engagement and what we call true engagement. You could say that when people go to a portal, for example, and they check their balance, well, that’s engagement. But it’s not the type of engagement that drives the relationship, that really drives customer lifetime value, revenue per user. It’s more of a commodity type of engagement. When we think of engagement, we not only talk about disengagement, we also talk about true engagement – the type of engagement that has the biggest impact on the customer relationship.

How do you think banks are doing in terms of creating engagement with their customers? Generally speaking, could they be doing it better, and if so, how?

I think that they’re investing a lot of money and I think that they are currently caught in a mindset and in a strategy which is focused more on acquiring customers than it is on driving the true type of engagement we just talked about. There’s clearly an understanding that there’s a need here. I think that the problem of disengagement exists very heavily with banks today. Regardless of stat, we’ll say close to 70% of their customers are either passively or actively disengaged. I want that to sink in for a minute. If you bring in 100 customers and they sign up for an account, and they immediately become disengaged. Where 60+% of your base is disengaged, well, that’s a major problem for banks. They have the problem in a big way. When you ask me “how are they doing?” … Well, they’re investing heavily, but the things that they’re investing in really weren’t built for solving the engagement problem. They’re investing in CRMs, they’re investing in marketing automation, they’re investing a lot and bringing people in the funnel, and they’re investing a lot in self-service tools to reduce the cost of serve. But it’s this middle ground of really taking a little bit of that budget and put towards engagement is where I see the biggest opportunity for them.

For an industry that has really, for decades been transaction driven, what you’re talking about sounds like a profound change in how they should be or could be thinking about their customers and the future relationships that they have with those customers…

Yes, it is a profound change. I mean, the fact of the matter is that banks make their money, and they’re great at bringing customers in, acquiring customers – 77% of all marketing budget is geared toward bringing customers in. The change that we believe needs to be made, and I think the banks are waking up to, is you have to take a portion of that budget from acquisition, and you have to apply it to true relationship building. The only way to do that – the only way to build a relationship in the digital world – is to invest in new tools that address the engagement problem. If you think about it, businesses and banks included, no more so than any other business that invested $6 trillion in digital transformation. And yet the relationship and the trust between their customers has never been further apart. There’s been a decade-long march to spend it on acquiring customers and spending on reducing the cost to serve customers and self-serve, but it’s created this great gap in the relationship and the trust, and the opportunity is to close that gap through new tools.

You’ve mentioned tools a couple of times in that answer. When you say tools, what are we talking about, tool wise?

The thing that we believe is the biggest opportunity from a tool perspective is to look outside of the customer relationship and look to what other tools have worked in society. So, 75% of all engagement today is being done on feeds – social feeds, news feeds, video feeds. If you think about it, Terry, think about the feeds that you engage with and their purpose. Feeds are incredible at driving a high rate of engagement. The content on the feeds can be very directed to the individual and their preferences and their interests. One of the biggest things that we see in the marketplace as an opportunity is we believe every bank should and will have customer feeds on their digital roadmap. Because unlike apps or even their portal strategies, you can give a feed to everybody, and it drives the highest rate of engagement and the type of engagement that’s non-transactional. You’re not checking your balances on your feed. You’re learning about auto loans for your kid in college, or you’re learning about how do you get a second mortgage, or what people at your stage of life are doing. Feeds are very personal, and they’re less transactional, and they drive the rate and type of engagement that makes all the difference in the bank’s economics.

What is it about feeds that gives them this special power, this greater power to create engagement?

A feed has content that is short, concise and actionable, so you can scroll through your feed, and you can immediately identify 10, 20, we call them experiences, that you can look at and, in a nanosecond, make a decision on whether it interests you or not. The investment from the end user on a feed is I’m scrolling and I can make a decision. If you think about that and compare that to a content mindset, where you put together content, you push it out to an email – feeds can quickly engage in much more content than you have in other channels. It drives the rate of engagement because everyone can have a feed. The old model was you have to come, you have to enroll in a portal, you have to download an app. You have none of that friction with feeds. It comes with the product. You push it to them, and then you reengage them by pushing messages out and bringing them back into the feed. We use text messages, so you get the highest rate of engagement, you get the type of engagement on feeds that give an inherent advantage over any other technology.

Matt, when you pitch a bank on the power of feeds as a way to strengthen customer relationships, what are the typical responses that you get? I mean, do you get a sense that marketers at banks are usually quick to recognize this as an opportunity? Do you run into skepticism about the potential ROI of it all, or any resistance or inability to make the change you’re advocating?

The short answer to that is “yes.” We have a range of responses, and those responses have evolved. We’ve been at it for 10 years. We’ve been pioneering feeds for 10 years. We have all this learning, but the first thing we learned is how the market responds. I’ll say this, I’m saying now that the market’s ready. I talked earlier about the digital roadmap. Our prediction is that if we were to have this conversation a year from now, 50-60% of the banks are going to have feeds front and center on their digital roadmap. And that is a much higher number than it was when we first started this. Often there is doubt and fear. If you think about banks, they’re well-entrenched in the mindset of the types of digital tools they’ve invested. They’ve already made those decisions to invest in them and, in many cases, they’ve already invested. I want to be really clear – we’re not replacing any of the things they’ve invested in. Feeds are going to be additive and will augment the return on the investment of your other assets. If you’ve invested in product education content you’ve buried on your website where people maybe aren’t finding it, you can put that on a feed. The first response is, is a little bit of fear, a little bit of skepticism, but what I’m really seeing is the market’s ready because the ROI is indisputable.

I’m guessing that not all feeds are created equal. What goes into an effective feed and what goes into an effective feed strategy more broadly, and how individualized would, say, my feed be compared to another person from a similar demographic?

Well, first of all, it’s a really good question, because if you think about, we’re here proposing feeds as a new tool and a new mindset. The strategy is really simple. Number one is everybody gets a feed. When you think about your strategy for feeds, everyone gets one. And number two is feeds are for the individual. Now the way that you create an effective feed – if you think about other feeds, social feeds or newsfeeds – you can start with general interest or things that you generally know about a person. Generally, you can say, “Matt and Terry fit this persona,” and there are a number of personas, but very quickly based upon how Terry interacts, based upon how Terry engages, things that Terry tells us on his feed, it gets optimized just like a social feed would be. Or just like when you go to YouTube and you search for certain things and all the content they’re serving up to you or recommending to you is based upon your interest. The strategy is to give it to everybody and to start with personas, the persona work you’ve already done, that allows for things to be interesting on the feed, and then to allow the technology to kick in, to optimize, to make it down to the individual. The feeds ultimately become unique to the person. That strategy is really effective in building that relationship of the known customer and building that elusive relationship at scale.

Of course, engagement, whether via feed or another mechanism, it tends not to be achieved instantaneously. It’s a process. How much patience, how much nurture time, is needed for feeds to reach their peak effectiveness?

In order for feeds to be effective, we tell our clients, and they’ll see that they’re effective pretty much immediately. Now, your question is an astute one. Even though they’re effective immediately, you say, well, how can they be effective immediately, but still require nurturing? They’re effective immediately because immediately, the rate of engagement goes up with feeds. Because everyone gets a feed, and you’re driving them back there via text message at a very high rate, the first part of effectiveness is the amount of engagement that you get. The feed is going to have relevant content immediately. People tend to think, well, it’s going to take a lot of time. The moment you hit a feed, it’s going to be relevant. So here’s a good example. If I just got onboarded from a bank and I just signed up for a checking account, well, right off the bat, on my feed, as soon as I click submit on the website, I get a text message that’s educating me on the product I just bought. It’s showing me how to fund that into a direct deposit easy. It’s building that rapport in that relationship, which means, right off the bat, it’s very, very effective. Where the nurturing comes in is, as you bring them back to your feed and you start to get more information from them – that’s when it gets optimized to be truly personalized to the person. That’s the opportunity that you have.

When you’re talking about the continuum of engagement from very engaged on one side to very disengaged on the other end of that, for financial institutions, in terms of how and where to focus their efforts, where’s the bigger payoff? Is it to go from already engaged to even more engaged? Is it to go from disengaged to kinda sorta engaged? Where’s the big payoff?

The math will tell you that the biggest payoff, first, I’ll tell you, is feeds do both. But the biggest payoff, mathematically, is if 70% of your base is either passively or actively disengaged, well, then, they are very near to churn. The disengaged customers are one-fifth the value, and they churn 56% more often. Being able to take someone from the disengaged bucket and move into an engaged bucket, there’s no greater investment than a bank can make because think of it, if I’ve moved someone who’s a fifth of the value, and I get them into the engage bucket, where I have the opportunity to maybe cross-sell or upsell, where I have the opportunity to reactivate that account, where I have the opportunity to educate them on the rewards program I’ve invested in. The data shows that when you get them moved from disengaged to engaged, well, they’re now in the bucket, which drives eighty percent of the profits for the bank, which is the engaged population. But most importantly, they don’t churn. Engaged customers don’t churn. Disengaged customers churn. Moving from the disengaged to the engaged is the single greatest opportunity for banks today.

Matt, you mentioned earlier about trust being a consideration in here. Seems to make sense you that it would be a pivotal part of all of this. How hard is it to establish trust, to get the customers to do that two-way sharing in order to really make the feeds effective, and what methods are out there that are proven to help a financial institution establish that trust?

Trust has to be established. If it’s not established that the jump, then is hard to establish, but the methods of establishing trust are like any other relationship. The first and most important thing that banks can do is they have to recognize that the types of experiences, the types of content, has to be mutually beneficial. The big mistakes that businesses – and banks are no different – is they load up on the marketing, or they load up on the transactional. So the first thing that you can do to build trust in a relationship is you want to give more than you take. The types of experiences that you have on your feeds tend to be very educational about the products you just bought. It tends to be educational about where you are in your life stage, and “here are things that other people like you find interesting.” When you do that, what you find is you start to build a rapport, you start to change the nature of a relationship, from a transactional one to a relational one, to one of guidance, and one where trust gets established. You’ll see that trust through the rise of engagement rate, down to the individual customers and in your base as a whole. It’s really a magical thing when it occurs.

I would imagine so, and that this process you’re talking about helps with personalization, which in turn helps to develop greater customer loyalty, and that of course is the Holy Grail of marketing. Matt Gillin, CEO at Relay Network, many thanks again for joining us on the BAI Banking Strategies podcast.

Thank you so much. I really appreciate it.

Terry Badger, CFA, is the managing editor at BAI.