Posted in: Wealth Management Administration
First published on Finextra
The customer has always been king. Customer engagement is the holy grail of marketing; creating an emotional attachment to a brand can create loyalty which means longer-term, less price sensitive and therefore more profitable customers. Customer engagement can make a significant financial difference: research from Gallop in 2014 found that customers who are fully engaged with their bank bring 37% more annual revenue than those who are actively disengaged and ready to switch.
But with the rise of digital, customer engagement has become more complicated. It’s no longer a case of simply delivering strong products and excellent service. Consumers are increasingly expecting to access seamless, tailored interactions with companies across channels whenever and wherever they choose. The quality of personalised experiences is becoming key to creating competitive advantage across all markets.
Our online shopping habits are analysed to produce personalised suggestions of products we might like and targeted adverts. Location data is used to recommend nearby restaurants based on our previous search habits. Social media is used as for marketing, as a customer service tool and complaints channel and increasingly as a way to design and deliver product innovation.
There are obvious steps that financial services providers can take to improve the customer online experience.
Ensure that your website is fast and easy-to-navigate to make it as simple as possible for people to find the information they need and be willing to do business with you. Align online touch points like Twitter, LinkedIn, Facebook and YouTube for look, feel and service standards. And that means across formats as customers in all age groups increasingly expect to have information accessible on iPads and smartphones.
This is the base level of functionality that consumers now expect as standard from corporate online offerings. Engaging with customers in a digital world goes beyond the basics. Technology can help create a more personalised experience that makes customers feel like individuals.
It is crucial to take a multi-channel approach to ensure that the virtual experience fits seamlessly with face to face and telephone for a consistent customer experience. Gallop research found that customers judge brands by their experience across all channels, so having a bad digital experience can offset any goodwill a company has built up through its other channels.
Digital needs to be embedded into all parts of the business. It can’t be treated as a separate, stand-alone offering any more. The rise of smartphone technology means customers can interact with a brand several times a day in a way that didn’t happen when we visited a physical branch, called a customer service centre, or even bought something online via a PC. Experiences can be shared publicly, immediately and widely to influence opinion both positively and negatively.
Unfortunately for many traditional financial services firms, legacy systems don’t adapt well to personalisation. And competition is fierce, not only from new and innovative financial services challenger brands, but also from established non-financial services like Apple muscling in on the traditional financial services payments space with ApplePay.
However, traditional financial services brands have the power to fight back. These firms hold enormous amounts of customer information that can actually drive personalisation. By harnessing technology to unlock the customer data held on legacy systems, traditional financial services firms can seize a huge competitive advantage over challenger brands.
Data can be used create differentiation to segment the client base, predict behaviour, drive customer deals, anticipate needs to support product development and deliver a more individual experience. And some large financial services brands are already getting this right. For instance, American Express links customer credit cards with their social media profile to deliver offers driven by their online likes. While NatWest is using digital and mobile technology to significantly reduce mortgage application times.
Digital is changing the face of customer engagement within the financial services industry. For customers that means wider inclusion, better targeted, tailored products and improved service. For brands who get it right, it can mean real differentiation creating increased customer loyalty leading to lower costs and higher profits.