A couple of weeks ago I was lucky enough to meet a man who had answers to the kind of questions all organisations are asking - how do I take the guess work out of winning? What I found amazing about what I heard was that none of it was new, in fact, those of you who read my blog, will have heard me talk about the importance of data, and how, in the future, organisations will do away with the notion of segmentation and speak to customers individually - as a segment of one. The difference here is that I met a man who was actually applying this thinking in the Banking sector and his client is not only winning, but out performing their competitors in dramatic fashion.
Data is the new Oil
To quote a friend of mine who has been working in this space for a long time ‘data is the new oil’. By analysing actual trends, using actual data to extrapolate information on customer needs, organisations are able to not only target their products and services to customers who have a high propensity to buy, but they are also able to tailor their products and services to such a degree that customers find them irresistible.
Again, this is not new, organisations like Facebook, Google, Apple and Amazon have been profiling customer behaviour for years, learning and developing their products and services based on real data that delivers real results and has driven them dominate their sectors... but why isn’t this happening in Banking?
Recently I visited a client who was struggling to grow their business. They have tried to follow the latest trends, taken the advice of expensive consultants and introduced ‘digital’ communication in their branches however, this has had little or not impact on their sale of products. Why, because they are not understanding customer behaviour. The solution in this case was simple. Understand who is in your branch, why they are visiting and tailor your messages to meet their requirements. By using the Q-Matic data gather from the branch, the bank were able to understand that in the morning, young mothers were in the branch, at lunchtime, office workers were in the branch and in the evenings, businessmen were in the branch. Seems simple - it is... so why then were the bank using their expensive digital screens in their branches to advertise student loans all day! By understanding who is in the branch and when, the bank were able to tailor their messages on a granular level, to speak to customers who have a greater propensity to buy. In this case, they used their digital screens to advertise school fee loans in the morning, credit cards and savings products at lunchtime and their business banking products in the evening and guess what... they saw their sales jump by 30%.
Now this example is a simple one, can you imagine how effective this is if the Bank look at their customer base as a whole? Well, the results are mind blowing. I have seen statistics that show banks are able to increase sales by more than 30%, reduce marketing spend by 30% and improve customer engagement by over 80% by using data analytics linked to propensity modelling.
How does this work?
Here are 12 tips to understanding how analytics with propensity modelling could work in your organisation:
Clean your data
Gather as much data as possible however, good data is critical. Invest time in making sure the customer information you have is accurate. In simple terms, if you feed rubbish in, you get rubbish out
Identify micro segments
Understand the data and identify micro-segments within it. I suggest 15 to 20 to start with. As you gather more information on your customer behaviour, you will be able to dissect this even further
Understand customer behaviour
Continue to gather data on customer behaviour to identify triggers which lead a customer to engage or buy
Control your organisations marketing spend and target campaigns to your audience based on what the data tells you is their propensity to buy
Keep messaging simple
Make sure your customers understand your messaging - keep it simple
Focus on Channels
Ensure you optimise your channel communication. Only use channels to speak to your micro-segments that will ensure your message is seen and heard
Rapid Incremental Innovation
Always look the the data to understand subtle changes in customer behaviour and be prepared to develop innovative new products, pro-active and reactive product and service offers. The more data you collect, the more powerful your organisation will become - remember ‘Data is the new Oil’.
Build accuracy into KPI’s
Make sure your staff understand the importance of accurately collecting data on customer behaviour and reward them accordingly. Provide them with the tools they need to gather data and speak to customers personally.
Hide the technology
Customers want human-to-human interactions and should not feel they are speaking to or being modelled by technology. Behave like a swan - graceful and elegant in front of your customers whilst paddling like crazy under the surface
Inform your decision making to drive customer experiences
Evolve your customer experiences online and in the physical space to compliment one another and serve your customers better based upon their needs. Steward your customers towards more profitable channels for your business in an elegant an sophisticate fashion.
Rationalise your network
Take cost out of your organisation by understanding where you need to be and what you need to say. The age of the large, expensive branch is over - be nimble, focus on formats and efficiency driven by informed decision making.
Seek specialist advice
Speak to organisations who have done this before - on the consultant side and the client side. Find one that can help you to build a program that works for your organisation. Accenture have, in my opinion, the best offer I have seen. It is fairly priced and has a proven track record of delivering results. Let me know if I can connect you to the relevant people.