We’ve all experienced the high that comes after making a big purchase. We’ve also endured the opposite: the unique fear of checking your credit card balance. There’s a reason these moments are universal: Money is personal.
And as a result, every experience and interaction with a customer has with their financial services providers has the potential to be highly emotional. While institutions tend to treat these moments with customers as everyday business transactions, money means more for the customer. It means success or failure. It means a future. It means security.
While core values like speed, accuracy and convenience remain important to consumers, they also want relevant and personal interactions that address the emotional side of the relationship, and, paired with consistently delivered core elements, ultimately build trust between the institution and the human being. And for financial institutions and their customers, trust is everything.
Expectations for a tailored experience are reasonable, even if financial institutions have forgone them in the past in exchange for a more transactional relationship with customers. Greater attention to personalizing offers banks and other financial institutions a major opportunity to develop stronger and longer-term bonds with consumers that add value to the bottom line. And it’s not just a nice, warm and fuzzy thing to do. Forrester research shows that emotion is now the top driver of customer loyalty.
How Banks Can Infuse Emotion into the Customer Experience
Even when financial institutions do understand the value of emotion, there’s still the question of how to turn customer experience goals into strategies that feel authentic, and translate into high-value relationships. This challenge is being made even more difficult by the pace of new technology adoption, and the cultural changes it’s driving. According to Javelin Strategy & Research, a third of customers at major U.S. banks use mobile banking, and younger generations are revolutionizing what brands must provide. Nearly half of millennials, according to Salesforce, want to receive SMS alerts from their bank, and 92 percent would choose a bank based on its digital services.
And while the flight to the virtual world may feel less personal and emotional, all of those digital footprints and real-time conversations (via social, chat, and other channels) allow brands the opportunity to be very personal. However, no matter how much financial services’ customers change, the key to a mutually beneficial relationship is delivering the right customer experience. Organizations can begin by taking the following steps to put emotion, and trust, at the center of their relationships with customers.
A Strong Foundation
The integration of emerging technologies into the customer experience is critical in this day and age. However financial institutions must ensure they’re always focused first on delivering on the foundational promises of their industry. Your brand promise is just that; a promise. And keeping promises is what builds trust.
Not taking good care of the most essential components is like eating at a high-end restaurant with horrible service. The bad outshines the other features after the experience is over. To put this in terms of banking, if a consumer’s local branch is not conveniently located, advanced in-store perks like friendly employees or 24-hour ATMs simply become irrelevant. Likewise, if the banking experience is not fast and easy, other personalized characteristics during these interactions are made far less valuable. In InMoment’s 2017 CX Trends Study, our researchers found that customers report being most satisfied and loyal when brands get this right. On the flip side, consumers report strong, negative emotions like disappointment, frustration and disrespect when brands fail to deliver on this basic trust.
Know Your Niche
The next must-do is understanding and investing in your differentiators, or what your customers love the most about you. It is no longer good enough to offer a generic, all-things-to-all-customers experience. You’ve got to offer the right experience -- for your customers, and for your brand. This may mean focusing in on a particular customer segment or a more defined set of segments, which in turn requires a lot of up-front work. Take the time to understand where you can shine, and build your business around that core. In order to achieve this focus, it’s just as important to make a deliberate decision about what your business won’t do.
Automation may be one of today’s biggest buzzwords, but financial services also requires a human touch. As with other industries, certain scenarios need person-to-person connections. Focus automation efforts in areas that both enhance efficiencies, and the customer experience, as well as in areas that empower staff to have more more meaningful interactions with your customers.
One area where automation can be leveraged to create a more human connection is personalization. Machine learning, AI and other technologies can help brands learn what each customer values, their buying and browsing patterns, as well as personal details like birthdays and favorites. This data can be used to shape individualized experiences -- both digitally, and when delivered by staff.
Trust is a critical component in the overall value financial services brands offer their customers. In addition to the functional side of trust (consistency, security of their financial assets and future), today’s consumers need to trust institutions on a more personal basis, which requires that brands demonstrate that they know and care about those customers as individuals.
Why go to all the effort? Because it makes business sense. A 5 percent increase in customer retention can increase profits by as much as 95 percent according to Bain & Co. No matter the decade, emotions have always played a central role in lifetime loyalty, and customer retention can help acquire new customers, too. Nielsen research says ninety-two percent of consumers believe recommendations from friends and family over all forms of advertising, and people speak positively about the products, services and experiences they enjoy.
A strong emotional connection can go a long way for financial institutions. So for financial institutions, among all other organizations out there, it’s worth asking -- are customers having a positive emotional response to your business, or a negative one?
Erich Dietz, SVP of Global Business Development, InMoment
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