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Keys to Successful Multichannel Optimization


Most thought leaders in banking agree that developing an integrated multichannel optimization strategy is paramount to remaining competitive in terms of cost and customer acquisition/retention. Some banks are investing heavily in self-service technology that reduces reliance on traditional branches by transforming these offices into service rather than transaction centers. Others are simply consolidating and closing branch offices and supplementing their market presence with technology-enabled self-service centers.

Neither strategy has proven more successful than the other. But doing nothing risks being left behind as customer behaviors and expectations continue to rapidly evolve. Developing and executing an integrated multichannel strategy requires foundational data to ensure that the strategy aligns with your channel capabilities, with customer preferences and the overall bank strategy and brand promise. We believe that the core of every strategy should include the following objectives:

Drive low-value activities to lower cost channels and leverage higher touch and digital channels to optimize sales revenue. This requires insight into your bank’s current performance, customer base and channel capabilities. From there, an effective digital sales strategy can be created and an implementation plan developed.

Develop a robust database of channel and customer (behavioral) activity data. The first critical step in building a truly integrated multichannel delivery strategy is to thoroughly understand current channel ownership, usage and propensity-to-adopt by customer segment. This requires linking multiple sales, service and transaction data with customer data for each channel. Creating this database provides a foundation for analyzing channel performance by activity type and customer segment.

High-level data, particularly in the branch channel, will not suffice. Customer visits often generate multiple transactions, some of which are candidates for digital migration, some of which are not. Having granular data will assist in developing estimates on the possibilities from a migration standpoint and create a better understanding of customer segment behaviors.

Develop a migration strategy. The next step is to determine activity migration candidates by customer segment and channel using the following steps:

  • Develop a rigorous, fact-based analysis of the current activities, volumes, frequency, time consumed and staffing requirements for each channel;
  • Develop a comprehensive approach to channel-specific unit costing, client segmentation, and scheduling and staffing for each channel to enable definition and prioritization of channel adoption opportunities;
  • Overlay industry adoption benchmarks and current channel capability gaps to develop a list of opportunities, and assist in defining the possible future state for each channel;
  • Analyze current product usage by customer segment to determine their propensity to acquire and use products;
  • Finalize the opportunities and their phasing/prioritization to incorporate realizable value, timing, cost and value to close gaps; near-, mid-, and long-term strategic considerations; and key enablers, obstacles and mitigation strategies.

At the conclusion of this tactical exercise, you will possess a prioritized list of channel migration opportunities that will create capacity within the higher cost channels. Some of these opportunities are immediately realizable with customer and employee behavior change, while others will require technology to unlock the full value. The capacity created can be realized via expense reduction or re-deployed to optimize sales revenue within the branch.

Develop a digital sales strategy: An integrated multichannel strategy is not complete by merely moving low-value activities to low-cost channels. It also requires utilizing the digital channels to increase revenue by reaching more customers and enabling a seamless sales transition between all channels. An effective digital sales strategy should utilize an integrated multichannel approach that focuses on both cross-selling into existing relationships as well as the acquisition of new customers.

For current customers, analyze product usage by segment and develop a database of individual customer opportunities for revenue expansion. From there, an interface can be developed to enable the presentation of most-likely-next-product in any channel the customer visits. All interactions should be tracked so that conversion analytics can be developed that track the funnel of channel traffic to opened accounts and enable ongoing refinement of the process. Additionally, it is critical to provide cross-channel opt-out points that jump channels seamlessly allowing customers to pick up where they left off in the shopping and sales process.

For prospective customers, the public website is typically the first interaction with a bank so it is critical to maximize that interaction. Make it easy for product shopping, link product views with offer generation, and simplify the offer acceptance to the application process. Again, it is critical to analyze the conversion funnel and provide cross-channel opt-out points.

Develop a high-touch customer engagement strategy. In addition to the digital strategy described above, effective customer activity migration and revenue optimization requires maximizing the effectiveness of all person-to-person interactions. Here are some key success factors for implementing that:

  • Provide employees with relevant customer segmentation and transactional data and develop differentiated messaging based on that data. Provide it real time to maximize customer experience and minimize employee hesitation to “sell” products or channels;
  • Properly train all employees of products and services and encourage usage themselves so that the customer messaging is genuine. Employees should utilize all channels and as many products as possible;
  • Utilize branch locations as a digital showcase that excites the customer about alternative channels;
  • Set goals, align compensation incentives to goals and track results. Include leading (behavioral) indicators and lagging (results) metrics of success. Customer offer responses should be tracked to eliminate repeat offers and provide data to analyze offer effectiveness;
  • Enforce a consistent, customized channel message, experience and product offers at all points of customer contact.

Effective organizations do not follow the herd as to what is working for leading institutions; rather, they focus inwardly to develop a strategy that aligns with their customer base and overall bank strategy.

Mr. Caulfield is a director at Los Angeles based-CAST Management Consultants. He can be reached at [email protected].