When it comes to modern banking, consumers are more savvy than ever. Using apps and websites for managing accounts and transactions are common activities for every day customers. They want a personal, engaging experience (usually without even stepping inside the branch office!) Today’s personalized data technology lets banks and credit unions of all size build stronger relationships through targeted printed communications. Yet, time and again, we see numerous marketing missteps which can reduce customer loyalty. Every consumer can relate to irrelevant financial-services offers, liking offering a travel-reward credit card to consumer who clearly never travels or sends deep incentives to open a new checking account, when the consumer is already an account-holder in that same institution. In some cases, the institution completely misses the target.
So, what’s the problem? Part of the problem is cross-selling financial products without consumer insights is the wrong approach. Consumer goods can be cross-sold effectively; who doesn’t mind a Coke with their potato chips? With financial services, however, banks and credit unions need to put a finer point on the approach. The customer needs to be shown not only a solution, but also a solution relevant to their circumstances. Circumstances change, and they change quickly. Banks and credit union building their cross-selling models based on data a year or even nine months old are in trouble. In the digital age, old data is useless data, especially in financial services. Banks and credit unions need to look at how their prospects are researching information, and act quickly on it. This may require an adjustment in how customer data is shared. Does the online analytics team share prospect data with branches, who can act quickly? Financial institutions are also learning marketing practices based on classic market segmentation and demographics are not as effective in the digital world. Basing a marketing approach only on age and income, for example, overlooks the changing purchasing behavior of millennials. An individual’s actual behavior is more indicative of their purchase intent than their lifestage.
Another aspect to consider is today’s customers want to consider options, not just “take it or leave it” offers. Does this really encourage customer loyalty? Many marketers look at cross-selling as a one-step process: If the perfect pitch is offered, a suitable number of prospects will take advantage of the opportunity. This is contrary, however, to how customers’ actually make the buying decision. The modern cross-selling process is actually two stops. Data and analytics put a relevant offer in front of the consumer to get their attention, but is it enough to make the sale? Is the offer clear enough that the prospect understands all the options or is it seemingly “take it or leave it.” For example, if a card offer is bundled with travel rewards, can the customer exchange those travel rewards for something else, if they don’t travel during the offer period? To really develop a win-win strategy for financial institutions and consumers, marketers need to use technology in a meaningful and personal way. Properly executed, a digital-enabled direct-marketing strategy can open up the conversation to make consumers more receptive than ever. It just takes planning, commitment and execution. By Mark Pageau, vice president, sales and marketing email: firstname.lastname@example.org Twitter: mpageau