At the time of this writing, the U.S. unemployment rate is at a low of 7.5 percent since the recession, and the recovery of household income is renewing consumer interest in credit card products. Additionally, banks are reallocating resources from teller windows to technology initiatives as branches continue to close and mobile and online banking continue to grow. Finally, today’s age of the customer means banks need to focus their energy and strategy on enhancing and optimizing the customer experience at every touch point.
Customer-centric companies continue to differentiate with superior customer experience, and banking institutions are no different. Forrester recently validated this with a report revealing that customer experience trumps price-value perception as a loyalty driver for banks. Leveraging big data analytics, such as customer spending and behavioral attributes, further enhances these experiences and engages the customer in a personally relevant manner that makes him or her feel recognized as an individual. Cisco’s global report also confirms this, with results showing the majority of U.S. consumers want a more personalized customer experience from their banks.
Herein lies a solid opportunity to deepen customer relationships. These evolving industry dynamics mean banks need to utilize technological advances to meet consumers’ digital banking expectations, while keeping the individual customer at the core. Personalized experiences are even more relevant when they include information in real time, and are more captivating when delivered via the most engaging digital medium — video.
Video technology becomes “smart” when it is created for and personalized to the individual viewer, yet replicated at mass scale for millions of customers. Structured data is pulled from one or more sources, such as a CRM database, for a personalized and contextually relevant message to the customer. Specifically for banking institutions, this data can include a customer’s account statement, recent rewards points, past transactions and behavioral history. Real-time generation and delivery of the video is key for an effective experience. If a customer makes a mobile payment in transit, then later that day does not see the transaction, this experience can negatively affect the customer and incur service costs when the customer inquires to the call center. The ability to access and use structured data in real time is critical for such differentiated video experiences.
Smart video technology can prove to be measurably valuable, and new value opportunities exist when video experiences are delivered in support of key initiatives for retail banks: moving to top of wallet, increasing share of wallet and increasing customer loyalty.
Top of Wallet
The average U.S. cardholder has three to four credit cards in his wallet or her purse, and three-quarters of cardholders have one card they prefer over another, according to Gallup Business Journal. Each bank aims to be that preferred card — to move to the top of their customers’ wallets in order to be used over a competitor’s card — and typically does so by offering targeted incentives and rewards, such as cash-back bonuses.
Smart video programs can enhance early utilization and drive activation with new customers as soon as they are approved for a new credit card account. As with other service organizations, the first 90 days are critical to reassure bank customers they made a good choice. Favorable onboarding experiences gain new-customer trust, increase levels of brand engagement, and can be all the difference between occasional and frequent spending. A personalized smart video presentation can recommend actions that deliver a great customer experience, including scenes that highlight value value-added services to make the most of a new account (such as autopay and e-statements), enrollment in loyalty programs, and promotions that drive up spending.
Retail banks can leverage customer data to proactively educate the customer about his specific account, thereby driving a measurable, material increase in active accounts during the first three months, reducing time to utilization and turning new customers into brand advocates. Extending this video experience to the delivery of a customer’s first statement offers further opportunities for care cost containment, specifically a significant reduction in the number and duration of statement-related calls from new customers.
Share of Wallet
If a bank is successful at securing top of wallet position early, then the likelihood of maintaining that position is high. In order to further affect growth and lift average customer value, banks need to expand from the top spot of the customer’s wallet and strive to represent the majority of, if not all, financial products within the wallet, too. Wells Fargo averages almost six financial products per customer, better than any other bank. Yet with the average U.S. household’s roughly 16 financial products across multiple institutions, there is further room in the wallet for banks to grow.
Acknowledging and rewarding existing customer relationships are critical first steps in expanding the number of products per customer, and hence, customer profitability and stickiness. Digital acquisition, merchandising and re-merchandising are particularly effective given the high frequency of online interaction that banks have with today’s consumer. Marrying that with captivating video engagement at the right time, with the right offer, through the right channel ensures effective share of wallet initiatives.
Targeted and relevant cross-sell experiences delivered via smart videos that speak to the customer personally result in engaging and highly effective offers. Leveraging behavioral analytics, segmentation and transactional history enable rich consumer insights and an ability to tailor marketing offers accordingly with goal of expanding share of wallet and maximizing customer profitability.
Banks can derive additional value from existing customers with relevant smart video experiences that recognize and reward spending behaviors and patterns with special offers for new products. Individual customer spending behavior and supporting interactivity features are reflected in every video. Cross-sell and upsell opportunities that reflect the individual’s wants and needs are far more thoughtful to customers and profitable to banks than aggressive pricing or nickel-and-diming customers, both which have a lasting negative impact on customer experience and retention.
Though rewards programs are no longer a differentiator for retail banks, smart banks invest in encouraging their customers to redeem rewards, as this has significant influence over top of wallet, share of wallet and total spending. If cardholders are not redeeming rewards, banks leave long-term value potential on the table.
Smart video technology boosts reward redemption by enabling more targeted calls to action based on the customer’s profile, historical and situational attributes. This ensures more memorable and effective brand engagement than traditional segment and persona-based marketing tactics alone, enabling deeper levels of contextualization. The result is a loyalty marketing initiative that increases program enrollment and reward redemption rates that exceed that of mass communication tactics, and achieve a measurable increase in long-term customer loyalty and value over time.
For instance, if purchase history and trends reveal a frequent traveler, the customer will appreciate a reward redemption offer for a first-class upgrade. Customer service follow-up to an inbound call can include a recommended action for the customer to avoid card churn, while adding value-added services, such as balance protection in the context of customer’s transactional history. A bank’s recognition of a customer’s life event, such as retirement or the welcome of a new baby, will support in fostering deeper loyalty and brand advocacy. And all of these examples can be delivered via smart video technology for a differentiated and compelling customer experience.
Smarter video programs can power customer engagement initiatives for retail banks that put the customer first. Leveraging data analytics to engage customers in a personalized and contextualized way allows for a differentiated customer experience that supports banks’ goals to derive more revenue per customer, greater lifetime value, and deeper brand engagement and customer loyalty.
Jim Disco is president and chief revenue officer at SundaySky, New York, N.Y. For more information, visit www.sundaysky.com.
Copyright (c) July 2013 by BankNews Media