How bankers can fortify their revenue drivers
With the evolving customer preference to research in digital channels, increasing customer acquisition and expanding customer relationships involves capitalizing on previously missed revenue opportunities. This can best be accomplished by transitioning from “passive” to “active” web technology.
Digital marketing practices, which include digital sensory capability, automatically detect and engage consumers in the early customer journey stages of awareness and consideration. Each customer segment shows a high proclivity to research online. In most cases, the prospect is 60 percent of the way through a purchase decision before they engage, thus proactive customer engagement and abandonment retargeting increase success.
As we rethink and align our priorities, knowing that the customer is outside a bank’s conventional purchase funnel paradigm, we have to reimagine engagement models to capture the advantages of the digital economy at work today.
Bankers lose the traditional advantage of face-to-face influence because there is no way to detect early-buying-cycle awareness. As a result, we risk being out of touch with the customer. To make matters worse, the convenience of digitally accessible options minimizes consumer loyalty and makes it easier for them to switch banks. The easier it has gotten for consumers, the more challenging is has become for banks to acquire and retain customers.
Industries outside banking are driving consumer digital expectations. Consumers are overwhelmingly ready to use automated support structures, but they also want effective access to human assistance. More than half want and are open to receiving financial advice. Three-quarters are willing to share personal data in exchange for value. We know what consumer market segments want, but current business models do not deliver.
As an industry, the focus has been on digital fulfillment, and rightly so. Going forward however, a fulfillment-only approach will not get the job done. The vast majority of consumers now research online, which demands earlier engagement and the opportunity to proactively nurture ongoing engagement based on a consumer’s generational segment.
There are many positives – among them, convenience, intuitive website and functional capability – that we can respond to in the digital world. There are also strong dissatisfiers, which include inadequate access to human assistance, outages and errors, and a cumbersome user interface that reduce the effectiveness of traditional consumer financial delivery models.
Here are some of the key challenges to overcome with the new normal:
- It’s more difficult to improve knowledge and data asset value due to reduced physical contact.
- With the digital economy offering so many options, competitiveness and risk increase, and loyalty decreases.
- Greater consumer empowerment from digital capabilities translates into consumers strengthening their control over the stages in their customer journey. Thus, banks are more out of touch, especially in two important customer journey stages – awareness and consideration.
- Online fulfillment abandonment rates exceed 75 percent.
- Traditional sales models lose effectiveness with reduced buying signal detection. Consumer influence is more difficult, and banks suffer from reduced timing insight of consumer needs and intentions.
- With digital acceptance, consumer satisfiers – and dissatisfiers – change. Providing excellence in customer experience is increasingly difficult.
- With increasing nonbank offerings in commodity-based products, market differentiators must focus on customer service level and contact relevance.
- One-size-fits-all models experience diminished impact, as we have diverse consumer market segments to please. The next decade is often described as “yold” – strong segments of young and old.
A proactive on-demand strategy overcomes the loss of influence and the lack of knowledge about customer needs. It is a model that integrates risk assessment, customer engagement, data asset value, digital/human services integration, digital sensory, fulfillment, abandonment retargeting and customer authentication.
Insight acquired through digital listening and detection technology compensates for knowledge loss due to diminished physical contact. It senses consumer intentions and measures signal strength for propensity to purchase, which can drive intelligent advertising, intelligent triggers and nudges, and offers. Notifications can include voice of customer survey questions to advance knowledge of customer behavior. Issues and errors can be detected during fulfillment to mitigate high industry abandonment rates.
A model that intelligently analyzes customer data insights across digital, branch and contact center assets for highest potential and customer timing will not only differentiate service, but will also align more closely with expectations that are being molded by other industries across customer segments today.
Todd Robertson is senior vice president of business development at Argo Data Resource Corp.