Say goodbye to traditional customer segmentation
To stay afloat in a sea of consolidation, financial organisations, including community banks and credit unions, must recognise that their customers are individuals with unique needs. Michael Boukadakis, founder and CEO of Enacomm, explains how technology can help achieve this.
Algorithms have advanced, and other industries – from retail to transportation – have raised the bar for customer care.
Consumers increasingly have come to expect personalised service from every organisation to which they bring business.
The level of personalisation that traditional customer segmentation offers is no longer enough; true one-to-one individualisation is the best way for financial institutions to win and keep customers.
Every day, consumers are bombarded with broadcast messaging. Thus, they’ve been forced to become protective about what competes for their time and attention.
Not only can lumping customers in groups, rather than treating them as individuals, be ineffective, but ongoing mass personalisation can mar a brand when communications miss the mark.
Banks and credit unions must message customers appropriately, which is now possible with the help of new technology.
By researching literally hundreds of data points and accessing dozens of business policies, advanced intelligent decisioning engines enable banks and credit unions to offer top notch customer self-service experiences while reaping the benefits of predictive marketing.
Rather than gathering big data and relying on outdated customer relationship management (CRM) techniques to obtain a snapshot of customers, a comprehensive view of individual behavior is now within reach.
To make big data think, the latest CRM technology uses the information that is collected to proactively and intelligently interact with each customer in real-time, in any communication channel. In addition to demographics and account information, each customer’s behavior factors into the dynamic decisioning engine, allowing financial institutions to anticipate customers’ needs and predict their future behavior.
True personalisation is crucial to customer and member retention for banks and credit unions across the globe. With intelligent customer interactions, patrons will enjoy a unique self-service experience every time they connect with a financial institution via mobile, SMS text, the IVR or on the web.
Personalisation does not just mean a customer will be greeted with “Hello John” when he calls the IVR; it means he won’t be burdened with long menus and messages regarding products or services he already uses.
To achieve specificity and accuracy in micro-messaging, a dynamic decisioning engine must have the following capabilities:
- it knows each bank customer’s account types, account tenure and history;
- understands how often each account is accessed or not accessed;
- computes high, low and average balances for each account; calculates and records transaction amounts for each customer based on current values and rolling averages;
- identifies transaction types, differentiating among ATM, teller, debit card, and check activities;
- records and reacts to the number and types of each customer’s digital log-ins;
- applies sophisticated interactive policies and rules using hundreds of additional data points.
When patrons interact with financial institutions via any channel, the technology knows many key facts about them within milliseconds.
Tailored customer service leads to increased profitability for financial institutions. An advanced decisioning engine enables banks and credit unions to successfully cross-sell products and services, while reducing customer service costs with top notch self-service channels.
Modern technology can also help banks and credit unions hone in on their most valuable customers.
In the old days, it was commonly held that every customer should receive the same level of service – but that’s not the most effective approach from a business strategy perspective. In the airline industry, first-class passengers are more likely to be frequent flyers, which means they spend more money with the airline. Thus, they receive a higher level of service as they sit at the front of the plane.
Banks and credit unions should rank customers and members, as well. A customer who has a large sum of money and multiple accounts with a bank should be prioritised by that financial institution over a customer with a small amount in one account.
The person with the larger balance is more likely to take advantage of financial products and services that the bank offers. A dynamic decisioning engine can single out high-value bank customers, who should receive “first-class” service from a customer care agent. For example, when a “platinum” patron calls the customer service line, the latest technology can determine that he/she should be transferred directly to a representative without having to listen to promotional sales messages — a customer service “express lane.”
To keep patrons happy and increase profitability, trade in conventional customer segmentation for customer individualisation. Modern CRM technology can give banks and credit unions confidence that each customer interaction is tailored to the needs of the individual and the institution.