Too many organisations in the financial services sector view ‘data-driven marketing’ as a means of generating more money out of customers. That’s too short-termist, frankly, as the real payback for firms in the sector is to see data as the way to constantly create value for customers so as to secure their long-term loyalty, instead.
Businesses and financial firms especially struggle to distinguish between what is valuable for the business and what is important from the customer’s point of view – which is to say that providers really ought to be offering their customers more in the way of data-generated value-add. When customers use their current accounts, their bank really ought to be able inform them, relative to other customers with a similar profile, how much they are spending – and whether they are over or under spending, so as to helm them better manage their budgeting.
When you come to think of it, there are all manner of ways in which financial services companies could be more proactive and helpful in helping customers better manage their finances. And if financial companies are prepared to offer that level of service and helpfulness on a consistent basis, then customers will be far more inclined to respond to service and product promotions that are sent to them. And that will remain true over the course of a customer’s life time.
In essence, data should be used for offering customers better personal financial planning. If you make the data truly useful for your customers, you will make your services correspondingly more attractive to them – and data-driven marketing therefore promises to increase your customers’ lifetime loyalty and could be potentially hugely lucrative. To achieve that, financial providers need to keep the take the long view and look to increase customer loyalty, and consider what would be the best thing to offer this customer, that would increase their chances of making further purchases of financial products over their lifetime.
In order to take the long view, there are various long-standing issues that banks need to address. Most banks are characterized by a silo-ed approach, in both systems and cultures, to the way products are traditionally marketed and sold, This has led to banks to have a very blinkered and short-termist approach and being 100 percent product rather than customer-led.
A related issue is that while some banks have made great strides in generating a ‘single view of the customer’ in terms of contact information and transactional data history, few firms have yet incorporated a customer’s digital behaviour into that customer record.
The problem is that data has been viewed a by-product, an as it were ‘digital exhaust’. What’s required is for banks to use data fully and expansively in order to achieve customer service excellence. To continue the metaphor, data should be treated as an organisational turbocharger.
Doing that entails integrating data into single customer views, capturing and consolidating the digital interaction data trail across channels as well as integrating that with off-line interaction and transaction data.
In addition, financial service organisations need to ensure that customer interactions are managed as a whole. It really has to mean an end to the silo. For ever.
That’s because the focus on using data to create value for customers before trying to extract value from them is the key to winning the data-driven marketing race.
By Ahmed Michla, Global Head of Content Strategy, Sopra Banking Software.
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