A financial institution’s inability to understand its own customers is often blamed for its inability to promote effective engagement. When designing and building an engagement plan, financial institutions (FIs) often engage in a monolithic approach that treats all of their customers as homogenous groups with similar needs, disregarding the diversity of their requirements.
However, the current climate demands a different approach. As the pandemic has ushered in a wave of accelerated digitalization across all industries, including FIs, which are focused on providing personalized interactions to customers without having to travel to a physical location. FI clients are no exception to those who expect valuable and genuine interaction from their chosen organization.
The marketing approach of seeing customers as homogeneous aligns more with a customer service tactic that tends to have a holistic response to certain customer needs. FIs that do this broadcast the same universally comprehensive communication to all of their customers, or react individually to each customer’s issues without regard to the pattern of subsequent engagement with customers.
What does this mean for marketing in financial institutions?
Fostering better relationships between clients and the FI requires leveraging data, analytics and the ability to meet them where they are. People want simplified but valuable communications from the companies they deal with and the faster FIs are able to find a solution that delivers better engagement, the better they can reduce the high customer churn rate in this industry and create better relationships with customers.
A decrease in the level of engagement usually indicates that something is wrong, which can have adverse effects on customer retention. According to a study of retail banking customers in the United States, deposits have increased 83% faster at banks with the highest levels of customer engagement. More importantly, clients are looking for FIs with whom they can build long-term relationships. FIs need to adopt a more customer-centric approach in how they interact with customers. If they take the time to build personal relationships with their clients, whether it’s opening their first accounts, helping them get a loan for a new business, or refinancing a home, they will succeed and get started. to see an upward trend in their results.
This is ample proof that FIs have a lot to gain if they put in place a strategy that will strengthen the relationship between clients and the institution. However, they face a different challenge even if they are motivated enough to develop an engagement plan – measuring customer engagement can be difficult. Additionally, without the ability to measure and quantify engagement, FIs cannot determine the return on investment of their efforts.
A customer’s value cannot be determined solely on the basis of a single variable, but must be examined thoroughly and nuanced in order to understand the various touchpoints and interactions that influence value. In order to achieve a comprehensive understanding of engagement, FIs should use a wide variety of transactional, operational, and behavioral variables, such as member type, number of transactions, and length of relationship.
How can FIs use one-to-one messaging to deliver authentic personalized engagement with customers?
Various FIs are developing digital solutions to meet customer needs during this pandemic with different approaches. While some are scrambling to launch their own offerings, others are turning to third-party vendors for the secure and seamless capabilities their customers require to accomplish various remote banking tasks.
The good news is that there are a number of readily available digital solutions that can be used by FIs to implement an effective engagement strategy, thanks to new technologies specifically designed to open up and digitize legacy systems.
A unique and effective tool is personalized text messaging, which can be used to engage customers and has the capabilities to provide the segmentation that FIs need to measure the success of their engagement.
Like JHomas ShieldsVice President, Product Enablement at Kasasa, points out “…instead of recording 5,000 calls, you can actually read the text messages you send. And if you have a service rep for your training, you can also analyze their conversations and look at the ones that didn’t work and look at the ones that worked.”
Statflo’s personalized business text messaging solution is at the forefront of approaching and improving customer engagement in several ways, including increasing personalization, adding context to customer conversations, and facilitating customer interactions.
In light of the aforementioned trends and figures, it is clear that FIs will lose customers, experience customer dissatisfaction and spend more on customers without an engagement strategy. By leveraging technologies such as statflo, FIs can build a connected experience with their customers and deliver customer satisfaction that drives engagement. Moreover, a system as flexible as business text messaging can offer a multitude of services, allowing FIs to adapt to changing customer needs.
The truth is, if one institution doesn’t, another will. Some companies may be hesitant about text messaging labels and compliance rules. This is a valid concern for sure, as the consequences of not following these rules can be very costly. That’s why Statflo has built in compliance as a guarantee of your company’s customer success initiatives and reputation.
For more information on how financial institutions can improve their profitability and customer relationships, download our white paper now.