If data is the new oil, banks must drill deeper to make the most of it.
Financial services firms are increasingly realising that customer relationships must be based on experiences rather than products. Why? Because people are no longer loyal to companies, brands or products. They are loyal to great experiences. Our new white paper, The Ultimate Guide To Digital Banking Tools and Strategies, looks at how banks should collect information from different sources to better understand what their customers want, strengthen customer relationships, boost conversion and even increase up-sell rates.
Where to drill: Traditional vs. non-traditional data
Financial institutions are sitting on a tremendous amount of traditional customer data. Were it aggregated with non-traditional data from social media platforms or mobile devices, this information could and should be used to build detailed client profiles and get in-depth customer insights.
Location, location, location
How can non-traditional customer data be turned into invaluable customer insights? Let’s take a look at geolocation information for starters. Global positioning systems and mobile phone signals help you track customers’ daily travel routes (say, between work and home), and map out their usual working pattern, holiday and weekend travels. You can even pinpoint their frequently visited cities or regions, favorite restaurants and sport venues. If you’re a visual type, this data can be displayed on maps.
But that’s not all. Combining geolocation data with other information – like which stores they visit or pass by regularly, the frequency of purchases or how much they typically spend at similar retailers – can unlock even greater benefits to banks. Think delivering digital experiences, services and products at just the right moment. To get an even better picture of customer behavior, combine it with demographic data or information on nearby events.
No wonder that having a holistic view of the customer has become a top priority for banks. Especially when it comes to customer-facing processes like cross-sell and upsell, complaint handling and service requests, as Hitachi Data Systems (HDS) observes. Because more longitudinal information on the customer means more personalized services and more effective risk profiling.
Get the whole picture
Customers want simple experiences, easy-to-understand products, transparency and 24/7 access to products and information, according to EY’s latest global consumer banking survey. 41% of customers surveyed in 32 countries said they wouldn’t hesitate to change financial services providers if they found one with a better digital experience or offer.
With a 360-degree view of their clients, banks can identify customer profiles and use it to drive actionable insights resulting in better marketing campaigns, as Evry, a Norwegian IT firm supplying digital services to banks, notes. In other words, a 360-degree view helps you understand product engagement (how clients use a specific product) better and predict customer behavior (e.g. flagging it up when a customer’s about to leave).
Take Netflix, for example. A company as data-driven as it gets, they can predict what movies you’ll love or hate. How? They feed all their customer data into a recommendation system that takes into account everything they know about you, from past viewing behavior to customer profile. Netflix then uses these predictions to create tailored movie recommendations based on your unique customer preferences.
Another example of putting different types of customer data to good use is combining transaction history with profile data. By predicting what the customer wants to buy next, this can increase up-sell and cross-sell opportunities. Evry advises digging deep into the customer’s market basket and finding patterns between products to forecast future purchases. This will boost customer loyalty and ultimately, bring you better sales results.
Surprise your customers
“Digital has confirmed the need to delight or surprise customers on an ongoing basis. Every experience makes a difference. And satisfying experiences, delivered over time, are what build long-term relationships and drive profitable growth,” as HDS puts it.
The takeaway message? To realign marketing activities, banks should develop a company-wide analytics strategy, driving a shift towards true data-driven customer relationship management. This also means making analytics a core part of all business processes and hiring people or third-party service providers with skills to apply the right methods to get the right insights.
For more on customer insights, download W.UP’s white paper The Ultimate Guide To Digital Banking Tools and Strategies.
