Mobile as Sales Supplement, not Sales Substitute

Mobile banking services can be used as effective tools to help banks sell additional services and improve customer relationships, but only if they are used correctly and in coordinated efforts with other delivery and sales channels.

“When it comes to buying bank products, customers will use multiple resources,” said Tom McDermott, senior vice president of cross-channel strategies for Atlanta-based SunTrust Banks Inc. “They might start on a mobile phone or go online to find out about bank products, but they may still use the bank branches to complete the deal. Branches will still be a big component of selling bank products because people still want some face-to-face discussion about their needs.”

McDermott made his remarks in a session at the recent BAI Retail Delivery 2012 entitled “Sales Effectiveness in a Multi-Channel Environment.” He was joined onstage by Jody Bhagat, senior vice president of Internet and mobile channels for U.S. Bancorp, Minneapolis.

McDermott said that the increasing popularity of mobile services will inevitably impact the size and type of services that banks offer at their branches and call centers. “We don’t need 5,000-square-foot branches anymore,” he said.

However, both speakers warned banks not to assume that their techno-savvy customers are going to want to do all their banking via mobile devices. Instead, banks need to look at how to integrate their customers’ mobile banking experiences into that of other channels, especially as it relates to selling products and services.

McDermott, for example, cited mobile devices as great vehicles for presenting offers that customers can check out later in more detail by visiting a branch or contacting a call center. “People calling the call center want help,” he said. “But the success rate of call centers in converting service calls into sales is not very high. The cost of sending alerts and text messages by mobile is cheap and could be a more effective way of getting customers to talk to call center representatives about products.”

McDermott added that the best products to sell via online or mobile alerts are credit cards while the hardest products to sell via electronic channels are mortgages and investment products. “Clients are less willing to look at mortgage offerings online and investment products are really branch-based sales,” he said.

The key to effective use of mobile banking, however, is not just to sell products but to use the device to engage in meaningful conversations with customers, according to Bhagat. “A lot of banks talk about cross selling when they should be talking about deepening the customer relationship,” he said.

Rather than just send out alerts about random products, banks should notify customers about special offers that fit their lifestyles and needs, Bhagat said. Text messages also can notify them about rewards they have earned, which creates a very positive experience. Even sending customers “Happy Birthday” messages can improve the relationship, he added.

Finally, using mobile messages to check out questionable transactions made on customer accounts as part of an active fraud prevention program makes customers feel the bank is looking out for them, Bhagat said.

In any case, all mobile communications with customers need to be coordinated among the various channels so that the customer’s experience is seamless, Bhagat said. “You have to have the right conversation with customers at the right time using the right channel for that specific conversation,” he said.

Ms. Giesen is a contributing writer to BAI Banking Strategies based in Libertyville, Ill.