Friday, September 4, 2020

Personalize to Create an Appealing Consumer Banking Experience


We live, almost without exception, in a buyer’s market. Consumers today are spoiled with an overabundance of choice. But even though they have access to more options and information than ever before, they often struggle to figure out which products and services are right for them. This is particularly true in the consumer banking industry where the quantity and sheer complexity of solutions can leave anyone’s head spinning. 


In this kind of environment, the ability to “Appeal” to consumers plays a critical role in capturing attention and winning business. In the past, appeal was primarily established via interactions with a personal banker. In the digital world, that 1:1 interaction happens less often or is altogether missing. This means banks need to get creative with how they apply advanced digital tools and platforms to close the gap. They need to use strategies like social connectivity and gamification to restore a sense of human connection and emotion to what would otherwise be a faceless engagement.


Creating Appeal is particularly important in this time of heightened emotions and uncertainty due to Covid-19. While there are many unknowns, we do know that the pandemic has greatly accelerated the adoption of digital technologies by consumers and companies alike. To thrive in this new reality, consumer banks need to fully harness their data along with emerging technologies and innovative thinking to address the four key elements of a better customer experience: Relationship Value, Appeal, Ease, and Availability. 


Our POV, Putting the Consumer in Consumer Banking First, covers all four of these elements. This post is the second in a corresponding 4-part series. It focuses on how banks can use Appeal to put customers at ease, make them feel special, and positively influence their brand loyalty. Read the first blog in this series, Strategies for Improving Relationship Value in Consumer Banking, which focuses on the idea of establishing a personal connection that delivers customer benefits beyond secure money management.

What is Appeal, and why does it matter?

Appeal refers to the intangible “what” of the consumer banking experience. It answers the customer question, “How do I feel about working with this bank?” And in a world of almost endless options, the answer to that question is critical. By appealing to a consumer’s emotions as well as to their tactical needs, a bank creates an experience that differentiates them from the competition. In this way, Appeal can become an important decision point alongside product and service attributes, and ultimately serve as the tie-breaker between comparable competing offerings. 


In our experience-led approach to consumer banking, there are three levels in the emotional customer/bank relationship. The first and foundational level focuses on building trust and establishing a sense of security and comfort. This has always been core to the banking industry. The next level helps improve comprehension, empathy, and satisfaction. This means successfully enabling and equipping consumers with information and services they need. And the third and final level builds on the other two by generating excitement, pleasure, and inspiration. This level helps a bank stand out in a consumer’s mind by delivering a lasting, positive impression. It is the level that gives a bank the valuable opportunity to exceed customer expectations by doing more than just servicing their needs—by going above and beyond and expanding the way the customer thinks about the bank. 


As banks shift to digital channels and in-person banking becomes a rare-to-never occurrence, banks need to employ creative strategies and digital technologies to move up these three levels as they acquire, retain, and grow each customer relationship. To achieve this, banks must focus on creating experiences that are relatable, personalized, and interactive. 

Chart 1 

Relatable – Putting Customers at Ease

Most people dread talking about money. In fact, a study by the S&P found that 44% of US adults would rather talk about death, religion, or politics than discuss money with a loved one. The topic of money clearly makes people uncomfortable, so a big part of a bank’s job is to remove emotional barriers to that conversation. 


Traditionally, conversations and choices about money were facilitated by personal bankers who created a direct connection with the customer. These one-on-one interactions helped put customers at ease because the banker was approachable, knowledgeable, and someone to be trusted. As customers transition to using digital banking tools, banks need to make those virtual interactions simple, empathetic, and intuitive. They need to feel as approachable (and helpful!) as the personal banker of yesterday, no matter the stage of the customer journey or the complexity of the task at hand. We all know there’s nothing worse than trying to address a high-emotion topic and being met with apathy or irrelevant responses, which is why banks must do everything they can to ensure digital interactions are grounded in the human experience.


For example, if a consumer knows they will default on their mortgage, the bank can help them navigate their options in an empathetic way that both educates and informs. The bank can achieve this with an interactive journey that captures situational data via an AI layer, which is then able to surface important options and important considerations the consumer should factor into their decisions. From there, a 1:1 conversation with a banker becomes much less intimidating because the consumer is equipped with information, options, and a sense of hope. 

Personalized – Making Customers Feel Special

Everyone wants to feel seen and understood. We appreciate when the barista at the local coffee shop knows our preferred morning drink, or the salesperson at a boutique takes the time to help us choose the absolute perfect accessory.  According to Epsilon, consumers appreciate the personal touch so much that 80% of them are more likely to do business with a company that offers personalization. But, while 76% of organizations believe that personalization has a “major” or “strong” impact on relationship building, they aren’t all taking advantage of this powerful strategy. 


Banks actually have a natural leg up when it comes to personalization. They already have access to some of the most robust consumer data signals, which can be converted into intelligent recommendations and used to orchestrate persona-based consumer journeys that feel intimately connected. The key is using technology to activate this data in ways that are timely, relevant, and contextual. 


For example, an appropriate personalized offer for someone who has just originated a mortgage might be six months of a 0% APR on a credit card to help cover the expenses related to settling into a new home. Or, based on visibility into paycheck deposits as they relate to monthly expenses, a bank might promote personal budgeting content, services, or digital products. Personalization can also be used to tailor content and creative assets in marketing campaigns or on-site offers to ensure each customer sees timely and customized offers and recommendations that meet their specific known (and even unknown) needs. 

Interactive – Rewarding Customers for Engagement

It’s human nature to like rewards, especially rewards that make us feel like we’re getting something for nothing. Case in point: beyond using credit cards for the obvious—purchasing things they need—42% of consumers cite earning reward points as the top reason they use a credit card. Banks can tap into these kinds of behaviors using gamification strategies to increase the frequency of interactions, drive upsell and cross-sell opportunities, and deepen customer loyalty. 


Special point offers, status-based promotions, contests, and challenges can all be used to further engage customers, create a sense of community, and even influence saving and spending decisions. These kinds of programs require a core infrastructure that can interpret data signals and enable advanced interactive strategies from gamification to cross-product portfolio campaigns and promotions.


For example, a bank might implement a program that rewards consumers with a higher savings account interest rate for achieving previously established savings goals. And to bring in elements of community and competition, the bank might create an anonymous, cohort-based leaderboard that allows consumers to track their progress against others with similar goals. As part of a broader cross-sell strategy, the bank may then offer winners a lower APR on a credit card or a special offer on the interest rate for certain lending products. Ultimately, achieving high levels of engagement opens the door to increasing share of wallet and expanding the customer relationship. 

Your consumer banking customers want more from you. Are you ready to deliver the kind of Appeal that makes a real emotional connection?

The opportunity around the concept of Appeal is a big one. According to a study by Acquia, 60% of consumers feel that brands do not do a good job of using their personal preferences to predict their needs; 82% of customers want higher levels of personalization than many brands currently offer; and 55% of consumers agree that brands are behind the times with how they interact with customers, both online and offline. 


Even more compelling is the fact that, according to a 2019 study by JD Power, more than 50% of US retail bank customers favor digital advice, and advice delivered digitally had the largest customer satisfaction point gain (+21 points) in 2019 vs 2018. 


Consumers are primed for a more relatable, personalized, and interactive digital banking experience. For banks to deliver this and achieve a high level of Appeal, they need to implement a holistic data strategy and integrated personalization program that brings together aggregated and enriched data management, a predictive layer with a customer context engine and real-time analytics platform, data activation through omni-channel orchestration, and continuous measurement and attribution modeling. 


No one said it would be easy, but the trends and consumer statistics indicate that the investment of effort and resources will deliver big payoffs for banks willing to get ahead of the curve. Retail banking can’t risk falling behind other consumer goods and retail sectors that have already invested heavily over the last decade. Banks need to take the best practices from those sectors and apply them to their own businesses. 


We invite you to learn more about what’s at stake and how banks can take advantage of the evolving consumer expectations and technology by downloading the full POV, Putting the Consumer in Consumer Banking First. The relevance and urgency of reimagining the consumer banking experience has never been more pressing.