E-banking means fewer visits to the branch and fewer opportunities for banks to interact with customers.
Posted Apr 1, 2007
The proliferation of online banking and automated technology in the financial services industry has brought convenience to customers and operational cost efficiencies to banks. But it has simultaneously ushered in a new challenge for marketers attempting to increase retention and build customer loyalty.
Relationships are built by connecting with customers on an emotional level and strengthened through all customer touch points. While automated services such as ACH, ATM, and online banking are convenient and cost effective, they have created the opportunity for customers to reduce personal interactions with their bank. This makes the nurturing of an emotional-level relationship with customers much more difficult.
Unique Challenge for Banks
Many industries conducting business online or through other automated technology face a similar challenge, but only to a degree. For example, booking Internet air travel does not require human contact at point of purchase. It does, however, require human interactions at point of redemption. Positive experiences at airport check-in or helpful flight attendants during the flight are examples of opportunities for the airline to strengthen its relationship with customers.
Conversely, banks don't often have those point-of-redemption interactions with customers. Once a transaction has been conducted online or at an ATM, no follow-on human interaction is required. So how can banks achieve the relationship-building effect of personal interactions in an environment where those interactions are often reduced or eliminated? Ironically, the answer lies within automated technology.
The Role of Customer Information
Financial institutions collect a plethora of customer information. But the sheer breadth of available data is difficult to harness and effectively use to meet the bank's business needs.
But today's database management tool sets enable marketers to easily consolidate multiple sources of data. This 360-degree view can then be used to deploy key components that are necessary in creating an emotional connection. Specifically:
When the opportunity to interact face-to-face is absent, it is important to ensure that any communications with customers are meaningful and relevant. Every customer touch point, whether in person, on-line, via mail, or phone, is an opportunity to strengthen the relationship--to demonstrate that you understand customers' needs and can provide them with solutions.
Understanding customers' needs is often predicated on understanding customers' life stages. Two 40-year-olds with similar incomes and similar types of accounts may be in very different stages of life with very different financial needs. To provide relevant solutions, it is important to recognize these differences and adjust marketing communications accordingly.
There are multiple external sources of lifestyle information. Or, that data may be collected directly from the customer. Regardless of how it is acquired, customer descriptors along with specific transactional information in your database will enable you to speak relevantly to customers and provide meaningful product and service offerings.
Timely access to customer information is key to taking timely action to motivate specific behavior and to prevent certain behavior from occurring. Today's highly competitive banking environment demands that banks have quicker and easier access to information to support the relationship-building process through multiple means:
Welcome programs--new customers should receive their welcome packages within days of opening a new account versus weeks later.
Proactive retention--action may be taken on customers exhibiting signs of potential attrition before actual defection.
Negative situation follow-up--quickly send positive reinforcement communications to customers who may have had a negative experience such as a decline for a credit card or loan.
Trigger programs--transaction or event-based triggers can be established to immediately respond to customer activity.
All of these initiatives go a long way toward solidifying customer relationships but their success is dependent upon the timeliness of their execution.
Transacting on the computer or at a machine may make customers feel like "just another account number" to their bank. So it is important to demonstrate that not only are they valued and appreciated but that you are interested in their feedback. Periodically soliciting customer feedback on their banking experience and ways to improve upon that experience will make a positive impression.
But solicitation is only part of the equation. A bank must be prepared to act upon the feedback it receives. Ignoring customer feedback can potentially have the opposite effect on the relationship.
The Dichotomy of the Situation
Creating strong emotional connections with customers has never been as important as it is today. Yet offering automated banking solutions to customers is critical to satisfy growing demand. However, in doing so we have reduced face time with customers and inadvertently impeded the relationship-building process.
Effectively using the customer information collected on a daily basis will enable banks to get to know customers in other ways--to communicate in meaningful ways even in an environment where human interaction is not required.
About the Author
Vicki James is leader of the strategic marketing consulting practice for Metavante Corp. Please visit www.metavante.com.