Marketing used to be about gut instinct, professional relationships, and creative flair. Not anymore. It has shifted from an art, to a science.
Today, good marketing is about understanding technology and data analytics. The advancements in these areas is allowing marketing to become considerably more productive than ever before.
Done effectively, marketing is now an über- function that goes way beyond customer acquisition. It is a powerful driver of profitable growth.
Recently, Jake Sorofman, a Vice President at Gartner Research, noted that: “Marketing is now responsible for critical customer-facing, revenue-generating systems and applications. As the marketing leaders’ mandate broadens, we are seeing the CMOs’ marketing tech spending approach the levels of the CIOs’ technology spend.”
At the heart of this golden age, is the marketer’s ability to access quantifiable insights about their customers.
These analytical possibilities are unprecedented, but, oddly, most banks have been slow to realise their potential.
Technology is changing banking forever, driving a seismic shift in the way it operates. The rate of change and the need for banks to offer their customers a rich, engaging and personalised banking experience is greater than ever.
While most banks are not known for their customer centric business models, there are some, such as the Bank of Ireland and Nordea, that are significantly increasing their marketing tech spend, and reaping the benefits - profitable growth and increased customer loyalty.
If PayPal were a bank it would be the sixth largest in Europe. Likewise, in the US, at the end of 2016, Apple Pay was accepted by more than 35% of retailers, just over two years after its launch. Both of these tech companies are succeeding in the banking space because they put the customer front and centre of their business models.
Unlike ‘traditional’ banks, they are not weighed down by legacy systems that can’t see the whole customer picture, whose front end can’t talk to the back, and whose analytics can’t make sense of the rich customer data they hold.
Instead, their tech gives them a rich picture of each and every customer, and they use these insights to automate processes, cross sell, upsell, become more efficient and offer customers a better service.
If traditional banks want to maintain their market shares, they too have got to provide what the customer wants, when they want it, and via the right channel.
That means embracing technology. For example, when a bank extends a relevant offer during a spontaneous customer interaction, the success rate is 15 times higher than a non-targeted campaign.
Similarly, banks sell an average of 30% more products to each customer with tech-enabled targeting, and those customers are more satisfied. Attrition rates fall 25% and customers are more likely to recommend the bank to friends. Technology improves success rates, profitability and reputation.
Another example where tech can help is customer acquisition. According to SiriusDecisions, the average company turns just 1% of inquiries into a deal. That is a dreadful drop rate that banks can ill afford, particularly given the predatory competition.
Leveraging data and implementing automated processes will have a huge impact on improving positive friction points, cross selling, upselling, customer scoring, prioritising, and retention.
Recently, Temenos, a leading software provider in the banking industry, invited some of the best fintech companies from around the world, to enter its Innovation Jam. The purpose was to shine a light on ground-breaking banking and finance technologies that address some of these issues.
One of my favourite examples was Xtremepush. As the SiriusDecisions research demonstrates, a huge percentage of customers are lost during a typical application process, giving up at various friction points. Xtremepush nudges customers over each friction point, ensuring more applications are completed. This means that revenues grow and processes become more efficient.
For marketers, this should be basic stuff – keeping the customer happy.
More difficult, but just as vital in banking today, is anticipating what the customer wants before they might even know themselves. Here, technology also has a big role to play.
Another of my favourites from Temenos’ Innovation Jam, was Easy Equities, that uses AI and chatbots in wealth management. It’s a service that takes away the mystery of equity investing, by holding the hand of the first time or novice investor, offering a low-cost service that includes online tools and research.
Banking today is about playing to the mantra of the late US economist Theodore Levitt: “People don’t want a quarter inch drill, they want a quarter inch hole”.
Banks must use technology to solve a problem, not sell a product. To do this they need to understand the customer journey and the different touch points, offering customers experiences, not products. The more banks do this, the more they will succeed.
The bank should aspire to proactively engage with the customer throughout the relationship, and become more involved in their lives. Banks should aim to become ambient; lifestyle brands.
But it’s not just about customer journeys.
Data analytics can deliver quantifiable metrics that allow banks to accurately compare similar products from a customer satisfaction perspective. This can, for example, help banks to cut down the number of mortgage types, from an expensive 400 to a more profitable 50.
Banks should also look at how tech can be used to improve the quality of leads and boost sales. Currently, only 31 per cent of banks use needs-based analytics in these areas. For the 69% who don’t, that’s a big opportunity missed.
It’s no surprise that successful marketing folk are seeing their tech budgets grow. I’ll end by summarising some of the ways in which tech and data analytics should be utilised by banks in their marketing, if they want to survive and thrive.
- Having an individual customer view that is rich in insights
- Integrating multi-channels
- Creating customer-centric products
- Creating multi-channel value propositions at speed, and offering a real-time service
- Understanding the impact of regulations
- Measuring across all stages of the customer journey
- Simplifying product ranges
Carl Robertson, Chief Marketing Office, Temenos
Image Credit: SFIO CRACHO / Shutterstock