It is often attributed to a financial institution's inability to understand its own clients that it fails to promote effective engagement. If they design and build an engagement plan, financial institutions (FI) often commit to a monolithic approach that treats all their customers as homogenous groups with similar needs, giving no thought to the diversity of their requirements.
However, today's climate calls for a different approach. Given that the pandemic has ushered in a wave of accelerated digitization across all industries, FIs included, that focus on delivering personalized interactions to customers without having to visit a brick-and-mortar location. FI customers are no exception to those expecting valuable and authentic interaction from their chosen organization.
The marketing approach of seeing customers as homogenous aligns more with a customer service tactic that tends to have an umbrella response to certain customer needs. FIs who do this either push out the same universally comprehensive communication to all their customers, or individually react to each customer's problems without considering the pattern of further engagement with customers.
What does this mean for marketing in financial institutions?
Fostering better relationships between customers and the FI requires leveraging data, analytics and the ability to meet them where they are. People want simplified yet valuable communications from businesses they deal with and the quicker FIs are able to find a solution that offers better engagement, the better they can reduce the high customer churn common in this industry and create better customer relationships.
A decrease in the level of engagement usually indicates something is amiss, which can have detrimental effects on the retention of customers. According to a study of US retail banking customers, deposits grew 83% faster at banks with the highest levels of customer engagement. More importantly, customers are looking for FIs that they may establish long-term relationships with. FIs need to take a more customer-centric approach to how they interact with customers. If they take the time to build personal relationships with their customers whether it is opening their first accounts, helping them acquire a loan for a new business or refinancing a home, they will succeed and start to see an upward trend on their bottom line.
This is ample evidence that FIs have a lot to gain if they put a strategy in place that will yield stronger relationships between customers and the institution. However, they face a different challenge, even if they are motivated enough to build an engagement plan - measuring customer engagement can be difficult. Moreover, without the ability to measure and quantify engagement, FIs cannot determine the ROI of their efforts.
The value of a customer cannot be determined solely based on a single variable, but must be examined in depth, nuanced manner in order to comprehend the various touch points and interactions that influence the value. In order to attain an understanding of engagement holistically, FIs would have to utilize a wide variety of transactional, operational and behavioral variables, such as the type of member, the number of transactions and length of relationship.
How can FIs use one-to-one messaging to provide authentic personalized engagement with customers?
Various FIs are developing digital solutions to meet the needs of customers during this pandemic with different approaches. While some are working to launch their own offerings, others turn to third-party providers for secure and seamless capabilities required by their customers to accomplish various banking tasks remotely.
The good news is there are a number of digital solutions readily available that can be used by FIs to implement an effective engagement strategy, thanks to new technologies specifically designed to open and digitize legacy systems.
A unique and effective tool is personalized text messaging, which can be used to engage customers and has the capabilities of providing the segmentation FIs need to measure their engagement success.
As Thomas Shields, Vice President, Product Enablement at Kasasa points out "…instead of recording 5,000 calls, you can actually read the text messages you're sending. And if you have a service rep for your training, you can then scan their conversations too and look at the ones that didn't work and look at the ones that did."
Statflo's one-to-one business text messaging solution is at the forefront of addressing and enhancing customer engagement in multiple ways, including boosting personalization, adding context to customer conversations and facilitating customer interactions.
In light of the trends and numbers aforementioned, it is clear that FIs will lose customers, experience customer dissatisfaction and spend more on customers without an engagement strategy. By leveraging technology such as Statflo, FIs can build a connected experience with their customers and ensure the customer satisfaction that drives engagement. Additionally, a system that is as flexible as business text messaging, can offer a multitude of services, enabling FIs to adapt to changing customer needs.
The truth is that if one institution doesn't do this, another will. Some businesses may have some hesitations surrounding text messaging etiquettes and compliance regulations. It's a valid concern for sure, because the consequence of flouting these rules can be very costly. Which is why Statflo has built-in compliance as a safeguard to your company's customer success initiatives and reputation.
For more detailed information on how financial institutions can improve profitability and customer relations, download our whitepaper now.