As the Banking and Financial Technology Industries become ever more intertwined in providing digital products and services to their consumers, some big opportunities for growth come to fruition, although not without some impeding obstacles.
Utilizing Big Data to Create Personalized Marketing Material
The 2017 Digital Banking Report and J.D. Power found that the most important component of enhanced customer attraction, satisfaction, and retention is the ability to apply customer-level insight to customer communications. The modern consumer increasingly defines him/herself through individual values, no longer can companies successfully target huge swaths of consumers with the same marketing campaign. Beyond simple name and account type data, communications between business and consumer should reflect the actions each consumer has taken, and the insights businesses have learned through consumer data analysis.
By mining through consumers’ purchase history, businesses can generate automated needs-based messages that are consumer specific. Businesses who leverage big data from all sources can develop content based on the needs, channels, and devices of their consumers. Highly personalized communication develops trust which can grow into a long-lasting, mutually beneficial business-consumer relationship.
As stated in the ‘2017 Account Opening and Onboarding Benchmarking Study’ the negative impact of a lost customer is at least $400 based on the revenue potential of a new customer and the sunk cost of acquisition. The financial cost of lost customers is staggering, with attrition rates of new consumers still hovering between 25% and 40%.
J.D. Power and Associates clearly outlines the value of consumer satisfaction improvement through targeted marketing outreach. The global market research company has found that improving consumer satisfaction by as little as 50 points can translate into a $24 million increase in revenue per 500,000 customers, or a 6% increase in revenue.
21st Century Technology Application to Channel Distribution
In addition to using targeted marketing communications to acquire new consumers, the channel in which messages are communicated is extremely important. According to J.D. Power, while 43% of Onboarding follow-up communications are sent by mail, consumers are most satisfied when they receive phone calls or text messages. However, only 33% of follow-up marketing communications are sent via mobile devices. The power of a phone call or text message cannot be underestimated, as cheaper alternatives to mailing documents, banks and financial technology should focus on utilizing these channels as often and efficiently as possible.
While broad based marketing campaigns may be ineffective in grabbing the attention of your target market, the increasing availability and decreasing cost of comprehensive data will provide the greatest opportunity for enhanced Return on Investment in marketing campaigns.
Pay-For-Performance: Maximizing the Utility of each Marketing Dollar
Pay-for-performance marketing is an alternative to traditional marketing strategies, presenting the best opportunity to segment, test, and personalize marketing campaigns, with results being 100% measurable.
One such digital marketing strategy are pay-per-click (PPC) campaigns, in which marketers only pay for ads when consumers actually see your content. The end goal is to have as many people as possible engage with your organization. The result is that companies spend less money on audiences who aren’t interested in company offerings and maximize exposure online. By trusting digital experts to put content in front of the right people; for example, by choosing the time of day and location in which ads will be placed, marketers are able to maximize the value of every marketing dollar they spend.
Advocates and Influencers: The Growing Clout of Online Blogs and Reviews
Consumers are often more influenced by individual people advocating for products rather than companies who promote their own brand firsthand. While creating a strong brand image through the company is necessary, consumers enjoy listening to real people talk about real problems and the solutions your products/services provide.
Creating a network of advocates and influencers translates to authenticity and continuing brand recommendations from consumer to consumer. Spending extra marketing dollars on campaigns to promote your brand through influencers may prove more lucrative than dumping funds into a broad marketing campaign that may translate into immaterial increases in sales.
Invoking conversation and comradery among your community of followers will grow understanding and awareness of product/service offerings to your already loyal community. However, with millions of daily social media and Internet users, starting a conversation will be sure to grab the attention of consumers who may otherwise would have never known about your company and the benefits you provide.
Marketing should never be overlooked. Old strategies including wide-ranging mass outreach will prove to be useless to the increasingly individualized consumer. New marketing campaigns that exploit big data to facilitate the targeting of conscious, interested consumers and employ brand ambassadors to enhance that message will be the most effective and cost-efficient.