Ad Blocker Detected
Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.
Matt Gillin serves as CEO and cofounder of Relay Network, a complete customer engagement solution for the enterprise.
My company recently commissioned Forrester to do a study on customer disengagement in banking. As the CEO of a customer engagement solution, the results backed up a lot of what I already knew: that banks and credit unions want to make connections, but they’re struggling to keep customers from passively—and sometimes actively—disengaging.
While the study’s results didn’t surprise me, there were a couple of points that jumped off the page.
First, I thought it was telling that many banks and credit unions seem to be concentrating most of their efforts and resources on technology rather than content. They’re investing more in technologies designed to acquire customers and understand customer habits rather than those designed to sustain and build relationships with customers through meaningful, relevant content.
Second, banks and credit unions seem to be in the thick of a communication conundrum. Even though they know their customers better than ever and are reaching out to them through various channels, they often struggle with cadence and content.
Naturally, banks are in business to make money and build stakeholder value. But because many banking services have become commoditized, more than most industry sectors, banks depend on their ability to drive and maintain customer loyalty and advocacy as a primary differentiator. So, what’s stopping banks from engaging more cohesively with their customers and delivering the right content in the ways consumers are most apt to consume it?
Let’s dive a little deeper.
Engagement efforts are stalled. It’s time to prioritize customer retention.
It’s clear that companies value customer engagement but are struggling to make true, lasting connections. One set of our survey responses tells the story: Asked to compare the reasons for deploying specific tools and strategies for customer engagement, responses indicated that banks and credit unions are spending less time on content targeting existing customers as opposed to new ones. Of the 12 categories of tools and strategies listed, decision makers said 10 were put in place more for customer acquisition, whereas only two were positioned for nurturing existing customers.
Our study showed banks and credit unions are investing more in technologies that target the customer journey than in content that keeps existing customers engaged. It also showed that they’re placing less of a priority on content and much more on back-end processes, like analytics and data modeling, to attract new customers.
Of course, I’m not suggesting banks cease customer acquisition efforts; rather, I am suggesting an equal amount of effort be dedicated to maximizing the value of existing customers. In 2018, PwC noted that few banks “have even begun to evaluate how to evolve their marketing and outreach strategies despite the fact that the way in which customers interact with banks is shifting.” More recently, our study found that 66% of customers are disengaged, and a recent Qualtrics report stated that disengaged customers are 50% more likely to churn. So, it makes sense that if you want to prevent churn, you should keep customers engaged and bring the disengaged back from limbo.
Why are banks struggling to sustain engagement? Well, I’d argue we start by looking at content and cadence: What are banks putting in front of their customers? What is in their communications? What channel are they using to connect with that customer? Are they communicating at the right time in the right way? Banks and credit unions should aim to get to know their customers better and automate specific functions. If you do not develop useful, relevant and meaningful content that’s frictionless to consume and interact with, the customer will probably not engage.
Be specific with your customer communications.
It seems almost too obvious to write that the more you know about customers, the more focused you can be on your marketing tactics. McKinsey found that providing personalized analytical insights can increase customer engagement. So if a customer is overdrawn, perhaps it’s not a wise idea to educate them about a high-net-worth savings account. Yet, I hear from customers in every industry—not just banks—that they regularly receive irrelevant information and are overwhelmed by too many communications from too many departments.
To address this problem, I think the banking industry as a whole should focus on two areas: better managing the customer information they collect and communicating as one unified voice to the customer in a way that isn’t creepy or spammy. When asked which of 10 potential issues is most affecting their ability to develop and sustain a single, cross-organization communication strategy, 43% of bankers pointed to complex internal rules around ownership of customer relationships in our survey.
It’s easy to picture the following scenario playing out: Armed with stacks of customer information, every department wants to advance its own KPIs by scoring points with customers. So, the checking department sends a customer one email promoting a new checking account. Meanwhile, marketing reaches out about an upcoming event, and a credit card admin pitches a new rate—all within the same week. Or seven different departments send along anniversary messages—all on the same day.
Gartner refers to the process of accomplishing the dual goals of ensuring consumer privacy and relevance by focusing their engagement efforts on the delivery of “tailored help.” Determine who owns tailored help in your organization. Who is the traffic cop for your brand’s communications with each customer? The fragmented nature of the customer relationship makes it easy to say the customer relationship is siloed rather than with the brand as a whole. But, as consumers ourselves, we know that is not how the customer perceives it.
Revisit your engagement strategy.
It’s important for banks, or really any business, to revisit their engagement strategies to ensure they are delivering on their mission to provide maximum value for their customers as a means of receiving maximum value in return. Make sure investments in engagement take contextual relevance, utility and friction into account. And when you engage with the customer, do so in a coordinated organizational pattern through a mechanism that a lifetime-minded relationship approach rather than just delivering tactical outcomes.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?