Experiential Innovation for Bankers Webinar – The Recap

For those of you who couldn’t sign in to last week’s webinar with Senteo’s Michael Ruckman, here’s a taste of what you missed.

Michael got things started by talking about the nature of customer experience, what most of us understand by this much-used term and how businesses generally, and banks in particular, attempt to quantify it. He went on to explain that traditionally, banks have been motivated to provide a good customer experience in order to ensure customer retention. However, he pointed out that in developed markets “it becomes increasingly difficult to differentiate based on product and channel factors. Also, the reward in terms of increases in income, market share, or competitive advantage gradually decreases as the competition begin to resemble one and other and the market becomes commoditized.”

The only way to truly differentiate then, is to shift from focusing on customer retention and concentrate on customer loyalty. Michael drew comparisons from brands such as Apple and Harley Davidson to show how customer loyalty can become an incredibly powerful force. He used the example of Apple and the iPod to show how when a disruptive technology is combined with a disruptive relationship, the results can turn market expectations upside down. This is because customer loyalty is emotional, rather than rational, and therefore difficult to predict. For banks to harness the power of customer loyalty and try to build potentially disruptive relationships a radical change in thought and process is needed.

It’s not enough for banks to just to try and anticipate customer needs based on past behavior, they must reach out to their customers and become an essential partner in achieving life goals. Financial industries are one of the few businesses that have access to exactly the type of information and services needed to create personal, lasting and mutually beneficial relationships with their customers. By looking at transaction history and a customer’s life stage, banks can extrapolate relevant reasons to make contact. One idea is to offer tailored group experiences, such as networking events for property investors, which will engender a sense of belonging and gratitude. This results in an emotional tie between the bank and the customer, a tie that is far less likely to be as easily severed by the end of a contractual obligation, like a loan being fully repaid.

Another simple but brilliant example of surprising and delighting customers (both great emotional responses that strengthen relationships) involved repackaging existing products and targeting them effectively. Michael gave the example of how surprised and delighted new parents would be if they received a congratulatory message from their bank with an invitation to come in and talk about how to set up a saving account for college. This kind of experiential engagement requires minimal investment but adds a huge amount of value to customers.

The idea of investing in creating experiences like this shouldn’t be a stumbling block as both studies and experience have shown that customers are willing to pay more for services that are customized to their needs and help them achieve their goals.

If you’re hungry for more tips on how to engage customers using your digital channel, check out our white papers.

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