To say 2017 has been a year of unpredictability would be something of an understatement. With political twists and turns dominating the headlines over the past six months, a general feeling of disruption and uncertainty has hovered over the nation. It’s therefore understandable that consumer confidence – always an insightful benchmark of how people are feeling – has recently dipped.
On 15th June, a decline in retail sales volumes sparked the biggest daily fall in the FTSE 250 since last summer. In particular, customer trading decreased from branded groceries to cheaper own label, with more visits to discount food retailers such as Aldi. In the midst of turbulent times, it becomes not only more important but increasingly difficult to manage customer relations. So what can customer-facing businesses across all industries – including banking and telcos – do to boost engagement and loyalty?
Make the customer experience truly omnichannel
Providing a holistic, seamless experience across multiple channels should be the core customer engagement strategy for any business, at any time. Customers need to know their needs will be met regardless of whether they are interacting with a bank employee in-branch, or raising a query over social media.
This is particularly true when external factors such as rising house prices, changes in interest rates or new legislation mean customers may seek extra reassurance and advice on important areas in their lives, such as their financial arrangements or home insurance provider.
But with tech-savvy customers able to transfer funds between bank accounts, renew insurance policies and book flights without talking to a single person, the role of face-to-face in the customer journey is dwindling.
Capitalise on every interaction
For businesses, the opportunity lies in being able to see every interaction as a chance to impress customers with their customer service and make them aware of other areas in which they can add value to their lives.
For example, research from Lexis Nexus found that when it comes to opening a bank account 61% of UK millennials prefer to do it in person. This represents a chance for banks’ employees to introduce them to relevant products and services that can benefit their lives. For example, a bank could enhance its role as a trusted provider and offer cyber-protection services to keep its customers safe online.
In the digital world, the rise of Artificial Intelligence presents an opportunity for businesses to enhance and personalise the customer experience. Chatbots, in particular, could move beyond a customer service role to one where they offer real engagement with customers’ lifestyle needs.
This is already happening in Sweden, where Swedbank has developed a web assistant called Nina, which has an average of 30,000 conversations per month and can handle more than 350 different customer questions.
In future, it’s expected that chatbots will be able to facilitate the administration needed to change utility providers, for example, or offer a concierge service such as booking flights based on browser history. This is where chatbots will really come to life in the customer journey and add value.
Remember the power of customer retention
There is an argument to be had that some customers may be less likely to switch during times of change, as they seek reassurance with familiar brands they already know and trust. This represents an opportunity for businesses to further engage with their existing customer base and leads them on a path to advocacy.
When you consider it can cost five times as much to acquire a new customer than retaining one, it’s important businesses invest in their retention strategies, and looking after your customers can reap rewards. According to research by Bain & Company, increasing customer retention rates by 5% can increase profits by 25% to 95%.
According to our The Connected Customer report, there’s a direct link between a customer’s intention to stay with a company, their intention to purchase and finally, their intention to recommend the provider to others.
Customers that are engaged with a business and happy with their experience are more likely to become advocates in the long term, which can help during periods of economic flux.
Understand the customer journey
But treading the path to customer engagement does not happen overnight. According to our research, different factors play a role at different stages in the journey. Satisfaction, trust, obligation, affection, and enthusiasm have an impact throughout the process. Emotional factors such as enjoyment, intuition, and moments of truth also play a significant role during the journey.
Peer-to-peer is often a crucial factor to customer acquisition; our report found that customers are more likely to choose their provider based on the recommendations of their family and friends, rather than advertising. In fact, 55% follow their parents and other relatives when deciding where to bank.
This reveals how customer engagement can trigger a domino effect, something that could greatly help banks and other financial services’ providers, as they react to the challenges brought about by change. Whilst having advocates to support one’s brand has long been deemed a great asset for any given company, this applies even more so to today’s uncertain global climate.
When it comes to modern customer engagement, businesses need to interact with their customers at relevant, opportune times, with personalised, data-driven messages which demonstrate to the consumer that they are valued and an important to a businesses’ future.
By Karen Wheeler, vice president and country manager UK at Affinion
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