How will a financial services organization drive new customer acquisition in 2020?
As always, it’s high on the list of priorities for leaders in the financial services industry. New customer acquisition ranked second on the list of priorities in BAI Banking Outlook: Trends in 2020, moving up from third the previous year.
BAI research suggests three areas that will help new customer acquisition: The fluency of a financial services organization’s omni-channel experience, its institutional reputation and its content marketing strategy.
Managing all three factors—particularly the omni-channel experience—pose unique challenges.
Each is critical to new customer acquisition at a time when consumer research shows fewer customers are thinking about giving all of their future deposits to their primary bank. According to BAI Banking Outlook: Trends in 2020 research, nearly half (45 percent) of customers said in 2018 that they were considering giving all of their future deposits to their primary bank. But in 2019, only about a third (32 percent) said they were considering it.
The most significant decline was among Gen X customers. In 2018, nearly half (49 percent) said they were considering giving all their future deposits to their primary bank. In 2019, that figure had plummeted to only 30 percent. Millennials fell from 41 percent to 32 percent, and Boomers dropped from 45 percent to 32 percent. Gen Z customers weren’t surveyed in 2018, but in 2019, only 30 percent of the youngest generation were considering concentrating their deposits in their primary bank.
These trends pose both a risk to growing share of wallet and an opportunity to gain new customers.
When looking at acquisition strategies that can have the most impact, marketers should consider the foundational element of a strong reputation combined with a smart content marketing strategy delivered through the right channels at the right time.
Long before a prospect encounters a financial institution’s brand in social media or has received an email marketing message or a piece of direct mail, he or she may already have an impression about the organization’s trustworthiness, its reliability, its sense of innovation or its commitment to community. Reputation could be a good thing or a bad thing, putting your organization at an immediate advantage or disadvantage right out of the gate. The better institutions carefully cultivate this invaluable asset. They engage with their customers and their community online and in person. They demonstrate thought leadership and integrity, and they keep employees engaged as they’re the brand’s most visible and important ambassadors.
Reputations are fragile, and as Warren Buffet famously stated, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
I recently heard a keynote address from Russ Klein, CEO of the American Marketing Association. He talked about the evolution of the classic “4 Ps” of marketing — product, price, place and promotion — and the importance of focusing on solutions versus products. Financial services organizations have an opportunity to leverage content marketing to a greater extent, educating consumers on relevant financial topics and on real solutions that meet their needs and solve their problems. BAI Banking Outlook: Trends in 2020 found reported that Gen Z wants to understand what others with a similar financial situation are doing, and Gen X customers are specifically interested in online tutorials on money-management best practices. When done properly and tied to a strong keyword strategy, content marketing can help organizations improve their SEO performance and capture more consumers actively looking for a specific solution.
The omnichannel customer experience continues to be top of mind from a product and service standpoint. Delivering the right marketing communications through the right channels at the right time is also important when it comes to new customer acquisition and retention. While email has been a standard for some time, text and mobile app communications are rising in preference as seen in the BAI Banking Outlook: Trends in 2020 statistics below.
» 30 percent of Gen Z consumers prefer mobile app communication followed by text (27 percent) and email (24 percent).
» Millennial consumers’ top choice is email (31 percent) followed by mobile app (21 percent) and text (18 percent).
» Gen X consumers show similar preferences in email and mobile app communications with mail (15 percent) rounding out its top three channels.
» 39 percent of Boomers prefer email communications, followed by mail (20 percent) and website (17 percent).
Understanding personal preferences and generational differences, as well as the types of messages best suited for the different channels, can help improve both the impact of the messages and the efficiency of distribution.
Another important trend to consider is consumers’ willingness to share additional personal information if they receive better product and service recommendations. BAI Banking Outlook: Trends in 2020 showed this percentage of consumers rise from 27 percent in 2018 to 37 percent in 2019, even higher with Gen Z at 41 percent. What financial institutions do with that information is critical and a potential differentiator in gaining market share.
At a time when, according to BAI Banking Outlook: Trends in 2020, traditional banks are losing relevance with each generation, financial services organizations must redouble their efforts to keep deposits flowing through the door. Cultivating a trustworthy reputation, creating solutions-focused content marketing and deploying smart omnichannel communications should be key areas of focus in the year ahead to regain relevance and get on the consideration list for consumers who are looking for a new home for their deposits.
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