The Financial Brand Forum conference in Las Vegas was packed with sage advice and excellent ideas for bank and credit union marketers to ponder and act upon. Several sessions, such as the insightful opening keynote from Ray Davis of Umpqua Bank and the equally compelling keynote from Eric Ryan of Method, focused on the importance of organizational culture. Employee engagement and empowerment are key to success when the primary source of differentiation is how well you understand your customers and how far you are prepared to go to meet their needs. Having employees who are dedicated to making a difference in the lives and businesses of customers is essential if you want to thrive and grow in today’s increasingly competitive financial services marketplace.
Another major theme of the conference was the importance of data and analytics to the business of financial institutions. In particular, how data can be used to:
• Determine who your best customers are
• Segment your database and identify new opportunities
• Optimally allocate your marketing budget or plan your pay-per-click (PPC) spending
• Personalize messaging and cross-selling activities
• Build better customer relationships
• And much more
In fact, the use of data and analytics was such a strong component of the conference that I’d like to highlight four key areas where we can help bank and credit union clients make a difference for their customers.
1. Onboarding
Many organizations do have some form of onboarding strategy, but it seems that most have not formalized their process or developed KPIs to make sure it’s followed. Yet the advantages of successfully executing an onboarding process are significant. Apart from the obvious benefit of having happier customers (which is a big benefit), onboarding provides the opportunity to learn more about customers’ situations and needs, explain how products and services work, educate on topics that customers would like to know more about, and enroll more customers into additional products and services. Per Onovative CEO, Mike Browning, customer attrition—which is at its highest in the first 12 months—goes down from 50% for customers who use a single product to just 5% for customers who use four products or more.
Michael Balsimo, in his session on digital onboarding, provided more details. The average cost to acquire a new bank customer is around $400. Losing 50% of your new customers is likely to prove expensive, and that’s without counting lost revenue. On the revenue front, Michael’s analysis shows that enrollment in online services encourages customers to deepen their relationships with their banks and credit unions. Those who use four or more online services are almost three times as likely to be loan customers too. In addition, the average annual revenue from online versus offline customers is about 70% higher, and the revenue from customers who use four or more services averages over 100% higher than those using a single service.
What does it take to successfully onboard a new customer? Onovative recommends an automated multi-channel onboarding and cross-sell process using multiple forms of communication—email, phone, SMS text, direct mail, and surveys. The process should begin with the collection of validated contact data (address, email, and phone numbers) to ensure future communications arrive at the destination. In addition, it’s important to ask about preferred methods of communication and to get permission to text customers, if texting is acceptable. Experian Data Quality can help by validating contact data in real-time and/or by reducing the amount of data your new customer must enter. Collecting accurate data up front saves time and customer inconvenience later, and provides quality information that can be used to prevent fraud, ensure message delivery, and facilitate your customers’ understanding and knowledge of your brand and services.
2. Micro segmentation
Today’s customers crave a personalized touch. Why can’t you see that I have no extra money to invest and am at a time in life when I’m unlikely to make very large purchases? Or that I already have several loans and could benefit from consolidation? Customers want to know how to better manage their own finances and want advice from their financial institutions—not product promotions. However, crafting individual messages and advice en masse is impossible for any consumer-focused organization to achieve. The solution is to create micro-segments; smaller segments of customers who have common situations, aims, and challenges.
The recommended approach is to identify lifecycle stages or segments and to then develop personas representing each segment so that sales can more easily identify them and empathize with their needs. Segments might include: young college grads, just-married couples, families with young children, families with teenage children, families with children at college, and so on. By examining the typical needs of each segment and aligning advice and recommendations, messaging will appear much more personalized and offers can be better targeted.
How do you go about creating these micro-segments? Experian Data Quality can help by providing additional individual and household attributes that enrich your existing customer data—marital status, family size, number/age of children, college loans, homeowner, vehicle age, length of residence, interests, home equity and improvement value, length of commute, investments, education level, and much more. The more you know about your customer, the better and more appropriate the advice you can give. Better advice leads to a stronger relationship, better customer experience, and ultimately the sale of additional services and increased revenues.
3. Replicating your best customers
In her ForumX presentation, Roxanne Emmerich, acclaimed transformation expert and business savant, gave us the seven lies of marketing. Lie #1 was that “it’s all about leads.” Clearly it’s not. It’s all about revenue generation, growth, and profitability—even for credit unions who turn that profit into better rates and services for their members.
Roxanne pointed out that, on average, your top 100 customers are likely to represent a large portion of your revenues, maybe as much as 75%. Whereas, 87% (she estimates) of customers probably lose you money. From a strategic viewpoint, is it better to target the next generation of customers (e.g. millennials) or is it better to analyze the profile of your top 100 and then work to find another 100 just like them?
Assuming you answered “the latter,” again Experian Data Quality has solutions that can help. Simply put, by analyzing the data from you best customers enhanced with Experian’s own rich consumer data, we can determine which set of attributes most closely correlate across those customers (in accordance with all consumer privacy and industry standards). The results are linked to addressable user IDs for all digital channels so that we can identify an online target audience with those same attributes and execute digital campaigns across search, social media, mobile, display ad networks, and cable and satellite TV networks etc., to help you engage with them.
By the way, lie # 7 was “customers care that you have ‘great people’ and are ‘older then dirt.’” No, they don’t! They want to know how you can help them transform their lives for the better.
4. Data transformation
And while we’re on transformation….data transformation wasn’t a topic mentioned much (if at all) during the Forum workshops and sessions, however it did come up a lot when talking with exhibitors. We asked vendors who offer API-driven services and those who ingest customer data to perform analysis or to provide marketing services if there were problems getting data into the right formats for their applications.
Several indicated that there were issues. Some pointed to the challenges of having inconsistent data formats, in telephone numbers for example, or incomplete data, e.g. in address fields. Others were concerned about the time and effort it can take IT staff to depersonalize and format the data so that it can be made available to the vendor. Others wanted their bank and credit union customers to enrich the data with additional attributes before it was depersonalized. And some just wanted their customers to supply comprehensive and accurate data. Many financial services organizations don’t collect email addresses when accounts are opened in a branch; many don’t validate their email addresses or determine if the phone number listed belongs to a mobile device.
Experian Data Quality can help here too. Experian Pandora helps to automate the mundane tasks of transcribing data formats, combining different data sets based on specific keys or fields, checking for missing or non-standard cell data, and many other data management requirements. It is easy to use, requires little training, and can be deployed in hours versus weeks or months. Want to get a consolidated customer view across multiple databases or datasets but don’t have time to wait for IT? Experian Pandora can do that, helping you to quickly understand who your top customers are and what products they use, without having to call on scarce IT or vendor resources whenever you have a question.
If you went, I hope you enjoyed the conference. We certainly found it very helpful. To learn more about how we are powering opportunities for financial services organizations, visit our website.
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