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Banking forever

Banks can use small and big life moments to keep customers for life

Mapa Founder Mark Pavan discusses the importance of sustaining digital conversations with customers.

In this time of ever-increasing change, retail banks face a pressing loyalty challenge: turning customers from passive to actively loyal customers – that is, customers who use a range of your banking products. Incumbents have an advantage here, as they offer a wide range of products, and it’s clear that several big players are focusing on the ‘banking for life’ marketing message to get people to this point.

However, the digitisation of banking, plus the financial and social pressures to close branches, means that customers rarely enjoy the interaction that can unlock this ‘active loyalty’ – a meeting with the bank manager. These meetings gave providers a chance to assess the specific needs and life stage of the customer; to up-sell and cross-sell other financial products that were absolutely relevant, and keep customers engaged and interested. It also showed customers a real ‘face’ of the bank, and gave them the feeling that they were appreciated and listened to.

The challenge, then, is to recreate this engagement model for the digital age.

Targeting and personalisation

The technology exists to tie customer data together based on a range of information – behavioural as well as demographic – to make personalised product recommendations and deploy highly targeted marketing within the secure area of banking apps. Offline marketing and any digital marketing before the point of login, by contrast, must cater for all audiences, with the likes of Lloyds and HSBC employing the ‘here for you at every stage of life’ messaging.

HSBC-life-events

HSBC categorises products on its website by ‘life event’

lloyds-bank

The recent Lloyds campaign promises to be with customers ‘whatever your next step’

Facilitating a two-way dialogue between ‘branch’ and customer is far from impossible on digital channels – although making it work may seem like a costly exercise, especially after ‘going digital’ has been chosen for its efficiency in more austere times. For example, chat bots on private messenger channels offer brands the chance to speak to customers digitally, and brands outside financial services have shown that live chat can be used for up-selling as well as customer support.

Supporting financial health

Might it be possible to utilise the PFM apps that banks so clearly need to perfect in order to win active loyalty, as a way to have sensible conversations with customers? On top of clever data visualisations and useful push notifications, could a ‘chat’ element be introduced to ask questions based on customer behaviour? For example, you’ve saved money on coffee this month by avoiding your daily Costa. Do you want to open this special savings account, and start by putting £2.95 away in there every day? This makes use of ‘big data’ (some geolocation tech could be employed here too – we notice you walked past Costa, well done) as well as introducing the option for customers to respond. Yes I’d like to do that. No it’s not for me. Hmmm, tell me more. Can you remind me later? Mondo and Simple are already trialing similar functionality on their mobile banking apps.

Of course, the sophisticated AI needed to automate this process for large banks with thousands of customers is not only far from ready, it’s likely to cost a lot of money. Using real people to perform this undoubtedly useful function is probably costly too. The same applies to social listening – there is technology out there to pick up on conversations as they happen, where people mention needs or desires that fit your offering – or you can employ a smart person or team to trawl Twitter for ‘I need a mortgage’ moments.

As complex and expensive as the highly engaged and communicative approach might be, it’s a surefire way to win customers and loyalty.

Smart use of customer data

As we’ve discussed, it’s not just about the big moments. Smaller signals, over time, can be as useful as overt ‘I really need a mortgage’ signalling. If you can gather the right data – via banking apps that people simply can’t live without – you’ll build a picture of your customer that the bank managers of old could only dream of. What they buy, when, where… and to what financial detriment… can paint a vivid picture of someone who is close to buying property, requiring a loan or likely to need credit, open to savings options or a candidate for ‘premium’ current accounts.

Gathering data around what is known as ‘micro moments’ shouldn’t only be used for promotions – it can be used to nudge people into good habits as per the spend categorisation and PFM suggestions above, and as an opportunity to serve up useful content and advice to consumers via third parties. These meaningful conversations that avoid the impulse to ‘sell, sell, sell’ can be considered ‘credit’ for when you want to have that chat later. Build the relationship and trust first – the technology exists to do so.

The challenge (and opportunity) is to find clever, creative, cost-effective ways to have ongoing, comfortable conversations with your customer, digitally – so that you not only have a chance to influence their banking choices in the big moments, but so you become a trusted partner by being there in the smaller ones.

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