Epsilon’s 5 & 5 - Consumer Bankers Association5_personalization... · Epsilon’s 5 & 5 for financial services 5 trends and 5 insights to ... personalization that will guide you

5 trends and 5 insights to watch for in personalization1epsilon.com

Epsilon’s 5 & 5 for financial services5 trends and 5 insights to watch for in personalization

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Personalization is a tricky business. Get it right and you could create long-term fans. Get it wrong and make enemies.

Consumers today not only appreciate relevant messaging and offers, they expect it. And just addressing them by their first name is no longer enough. In fact, it actually may be annoying to your customers who know it’s not truly personalized content. The stakes are high. If they opt-out, you effectively lose them for 3–5 years—which in marketing terms is forever—so why would you risk sending non-relevant content or offers?

There are no silver bullets. Personalization is a journey you need to test into. It relies on customer listening, relevant data and new approaches to marketing.

5 trends and 5 insights to watch for in personalization

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Even the more sophisticated data-driven financial services marketers are struggling to figure out how to effectively and efficiently integrate personalization into multichannel customer and prospect marketing strategies. This iteration of the Epsilon 5 & 5 is intended to trigger some contrarian thoughts and challenge your marketing status quo.

In this issue, we’ll talk about personalization, what it really means in financial services, why it’s important and where to start.

We’ll explore five trends and five insights about personalization that will guide you in optimizing your marketing strategy and connecting with your customers in meaningful ways.


5 trends and 5 insights to watch for in personalization4

Five trends

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Just personalizing one channel (like email) isn’t good enough. The majority of customers carry their purchase decision cycle and engagement interactions across channels and they expect the experience to be consistent. Inconsistency will deflate acquisition results and accelerate customer attrition. Being consistent across channels leads to a host of benefits, according to the CMO Council (see chart bottom right).

Customers don’t care about the technical difficulty of making the multichannel experience happen, they just care that it happens. A recent survey by Sitecore and Vanson Bourne found that more than a third of respondents expect more personalization through mobile apps and websites in the next three years.2

Specific to financial institutions, 52 percent of consumers want messages tailored to their financial needs and goals.3 And they are willing to see personalized ads from their bank with consistent themes across channels to help them reach their personal financial goals (like paying for college or saving for a home). But, not all customers have the same preference for personalization.

Here’s the important part; even though 63 percent of your customers are open to seeing personalized ads from you on channels outside of your website and app (as long as they are relevant to their financial goals), 57 percent of consumers report never seeing those ads (like banner ads or sponsored social posts).5 Perhaps it’s not the right content, poor placement or incorrect timing, but regardless, you have an interested audience, make sure you stay in front of them with relevant, timely and visible messaging across the appropriate channels.

1 CMO Council/IBM Digital Experience, Brand Attraction from Enriched Interaction, 20152 Sitecore/Vanson Bourne, How to Keep Pace with Mobile Consumer Expectations, 20163 Segmint, 2016 Consumer Bank Marketing Report4 Ibid.5 Ibid.

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Leading benefits of using enriched/personalized content and digital interactions according to

senior marketers worldwide, June 20151

% of respondents

Higher response and engagement rates

More timely and relevant interactions

Greater customer affinity and word-of-mouth

Conversion of more customers

Clearer and more persuasive communication

Differentiation of our brand from others

Higher loyalty and retention

Better recall and recognition of our brand

Attraction of more prospects

A more compelling product sell or brand

Stronger appeal to millennials or other

Other

2%

28%

37%

38%

39%

40%

40%

43%

43%

44%

47%

56%

One: Customers expect a consistently personalized multichannel experience

Percentage interested in personalization tailored to financial needs/goals4

67%18–34 years old

59%35–44 years old

42%45+ years old


Two: Customers want to know where they stand

As humans, we like to know how we stack up against our peers. It’s called social comparison theory and it’s how we figure out where we’re succeeding, where we’re on par and where we’re falling short.

This is particularly true in our financial lives, although most are hesitant to ask. There’s an opportunity here for you to be proactive. Your customers may wonder:

• Am I ahead, on track or behind in achieving certain goals?• Do I make more or less money than my peer group?• Am I investing in the right markets and with the right products?• Are my investments earning comparable return rates?• When will I be able to retire?

Many financial institutions are starting to capitalize on this interest with user-friendly tools to show customers how they stack up, like trackers, real-time progress bars, etc., both comparing progress to the goal and to others. The savviest brands are then using the results to recommend products/services or provide content to show customers how to get on track (or what to do now if they’re ahead of the curve).

The tools are generating positive results. Empower Retirement, the administrators of $440 billion in assets (from over 7.5 million retirement plan participants), found that consumers who used the peer comparison tool increased their deferral rate from an average of 7 percent to 9 percent. The tool allows savings comparisons based on age, gender and income.

Voya Financial (formerly ING U.S.) which launched one of the first peer comparison tools in 2009, recently launched a new tool. Voya says that small and mid-size retirement plan participants who use the new tool contribute an average of 7.3 percent (compared to 5 percent of participants not using the tool).

Increase in deferral rate of those consumers who used the peer comparison tool

7% 9%

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Three: Customer service always beats marketing

We know that customer service is important, but we often ignore the impact it has on customer satisfaction and long-term engagement. Too often we think our marketing drives the brand image. This is a good reminder that it’s really only one component. Forrester found that banks have the highest correlation between customer experience and the likelihood of switching providers.6 This means that customers who aren’t satisfied will leave.

Financial consumers who have positive experiences are significantly more likely to have higher trust in the brand (71 percent compared to 32 percent of those with negative experiences).7 And trust is important. According to Forrester, “Financial service brands have long suffered from a lack of consumer trust, but the 2008 financial collapse undermined the brand relationship. Difficult as the road is, financial service brands must strive to secure brand trust…through superior personalized product offerings.”

The key idea here is that personalization is about more than just marketing, it’s about assuring that customers receive the best service possible—that their questions are answered accurately and promptly, that problems are resolved quickly and with minimal hassle for the customer and that there are service recovery programs in place when the service experience is not optimal. No amount of marketing or positive PR will cover up servicing issues. At the same time, we do need to remember that meeting emerging customer needs (up-sell, cross-sell) can easily overlap in the customer’s mind as servicing.

Part of the challenge is that service may not be deeply integrated with marketing, leaving the two to determine how to best serve customers without knowledge of the other’s strategies or communications with the customer. Often, we just integrate the next best interaction or offer with the servicing channels to promote cross-selling during the next customer contact. But what about the other way around?

Servicing interactions aren’t typically an input into marketing (instead, it’s usually just data about product ownership). If something is unfolding in servicing, marketing needs to know. If the customer is unhappy with service, marketing should be put on pause. Nothing will accelerate attrition more than continuing to cross-sell to an unhappy customer. But if you get it right, you have an opportunity to actively deepen the relationship.

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6 Forrester, How Financial Services Firms Win Loyal Customers, 20117 Capgemini and Efma, 2016 World Retail Banking Report

Consumers who are more likely to have

higher trust in the brand

71% of those with

positive experiencescompared to

32% of those with

negative experiences


Four: The ability to personalize can get lost with the focus on analytics and technology

The penalty for not being relevant, of which personalization is a critical component, is high. Research shows that mistargeting prompts consumers to either ignore you—nearly half either automatically delete your communication or mark as junk—or abandon you (38 percent unsubscribe).8

But what we’re also seeing is that many brands are tackling the challenge of analytics and technology at the expense of personalization. In reality, your brand must do both. Delaying personalization until you have the analytics and technology “just right” means you’re missing an opportunity. If you have customer level data, do something with it!

Testing into personalization is always a better strategy than doing nothing. Start with the data that gives you a clue to the customer’s needs and wants. It’s the foundation of relevancy.

Part of the challenge is the separation of IT and marketing, where leadership thinks that flashy technology will solve deep organizational and non-integrated data issues. The speed of marketing is only accelerating and unless it was designed around speed, technology has trouble keeping up.

Drilling a bit deeper into the topic, the majority of analytics in financial services is missing a critical part of the picture. Today, the most advanced analytics are focused on the current and potential value of the individual/segment to the company (company focused and not customer focused). While this is a critical driver of determining the next best treatment/interaction/offer, it’s only half of the picture. Consideration of the customer’s actual needs and wants is either minimized or absent. Further, too many companies rely on secondary research and advanced analytics to determine what the next best interaction should be. You likely interact with your customers via multiple channels, aren’t you missing opportunities to understand their needs by asking them for their input?

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8 Janrain and Blue Research, 2014, Social Login and Personalization9 FitForCommerce, 2015

Do you have the data needed to truly personalize the shopper’s experience?9

35% We have data, it’s not usable and

we don’t know how to use it

33% We don’t have enough data

32% We have data, it’s usable and

we know how to use it


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Five: Next generation preference centers are starting to play an important role in personalization

Preference centers should be much more than the page where your customers unsubscribe. If done correctly, these pages have the opportunity to engage disengaged customers, turn satisfied customers into loyal customers and weed out the truly disinterested.

Most preference centers are too simple. A complete opt-out should not be the only option. You should be giving your customers the option to “opt down” instead of forcing them to fully opt out.

The best preference centers allow customers to change preferences, differentiate between products, services and communication types, choose communication frequency (such as weekly round-ups versus daily digests) and select which types of communications they want to continue to receive. They also allow customers to revisit this page whenever they’d like to make modifications. Rather than thinking about it as a negative “in” or “out,” think about it as a positive place to tailor communications based on preference. Maybe it’s just one type of offer they’re tired of, like email card-related offers, and they’re open to all other offers?

And just because a customer wants to opt out, that doesn’t mean they’re lost forever. Building a preference center like this is the easy part. You must leverage your technology and adapt your marketing strategy to deliver on the “opt-down” promise.

Going even further, preference centers will go beyond communication preferences and venture deeper into customer needs. For example, what percentage of mail or email marketing communications use preferred nicknames? Probably pretty low: the majority of these messages have full names. In your interactions with the customer, explicitly identify and store a preferred nickname. It’s very simple yet few companies actually do it.

Just because a customer wants to opt out

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One: Databases are sexy again

Over the last five years, most of marketing focus has been on the “shiny” digital touchpoints. We believe consolidated databases will be all the rage yet again. They are foundational to relevant marketing. But, they are not a panacea. Using them to help understand your customer requires work and an investment.

To be effective at personalization, you need to have the best possible and complete view of your customer. Thus, the consolidated marketing database is critical. It’s what your analytics engine relies on to generate insight and ultimately the next best interaction recommendations.

Be sure to include demographic, lifestyle and behavioral information to help shape your understanding of the customer’s needs and provide personalized content. Assure that your database is dynamic. Customer needs change all the time. You need to have the capability to update it immediately with new or revised information. With more and more communications being delivered in real time to customers, you can assure relevance only if you rely on and can react to the most recent information. It’s critical to understand the data sources of your database and the frequency at which they change to align the database update routines accordingly (e.g. not all data sources need to be updated ASAP).

However, beware of trend four and make sure the building of the perfect comprehensive database doesn’t delay personalization. If you have the data, your database and the supporting analytics should run in parallel. Going further, maybe your starting point is some 3rd party segmentation that you ultimately augment or replace with your 1st party data?

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Two: Context is a multiplier

As humans, we incorporate context in our interactions. We assess the audience before making a joke, we give background information to a story and we tailor our dress and behavior to the environment. Marketing is no different. It is the “when” and “how” of your interaction.The message is the “what” and “why.” Context is quickly becoming commonplace in marketing.

Specific to personalization, time and place alone can have a significant impact on the next best interaction. Is it likely that a customer will apply for a card very late at night at an ATM in the theater district? Or are they more likely to apply from a laptop computer at home on Sunday morning?

Leverage your consolidated marketing database to inform your contact and offer strategies:

• Test to determine the best times of days to send emails and mobile messages/ads.• Avoid deployment of emails when your customer is not online. Strive to be at the

top of their inbox. • Recognize when customers are searching your website and offer to engage them

through phone or chat.• Time messages for the customer’s convenience, not your staff schedules.• Take advantage of the customer’s increasing tolerance to be known online.

But, don’t go crazy. Keep the messaging and offers to highly targeted segments.


Three: Service and marketing integration is the next frontier in personalization

The siloed approach to service and marketing information needs to end. Service and marketing should be based on the same integrated database because the service experience contains endless clues for the next best interaction. But most financial institutions still aren’t leveraging the service channels to engage the customer through relevant content and offers.

Are you properly arming your inbound channels to do this? At the very least, you should have a simple snapshot of the customer’s engagement and 2–3 next best interactions that customer service teams can choose from based on the context of the current interaction.

Are you properly training and incenting your frontline staff to personalize customer interactions? It’s not uncommon for financial institutions to not view their customer contact staff as marketing agents. Yet, those agents are local and have access to the best information at that moment (especially contextual information). Instead of keeping them at arms’ length, invest in proper training and incentive plans to encourage them to build connections with customers.

Are you equipped to handle poor customer service issues?The worst thing you can do to a customer or prospect is to try and sell to them right after a bad customer experience. Informing push and pull channels of this poor experience should be the first and most important goal of your real-time integration.

• Be honest in your marketing: ”This used to stink, but we’ve listened, learned and improved it.”

• Encourage and provide mechanisms for customers to provide feedback: “We are listening to you.”

• Develop a pre-emptive customer reclamation/win-back strategy: “We’ve missed you.”

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Four: Campaign-level attribution is yesterday

Attribution has become the challenge of the hour across industries. As new channels take consumers from offline to online rapidly, the customer journey is becoming increasingly complex. And as new channels allow your marketing teams to send content and offers to consumers, it’s becoming increasingly challenging to attribute the sale/purchase to one campaign or interaction.

Rarely is a customer’s decision based just on one message or offer, unless it’s a small purchase or decision (which is rarely the case in financial services). So if you run a campaign focused on customer education, why would you try and tie ROI to that campaign in isolation?

Campaign-level attribution in today’s environment just seems silly.

Instead, attribution must be based on the complete customer experience and your customer and acquisition goals. Start by mapping your customer journey and then testing and learning. Consider the totality of customer interactions when evaluating your marketing strategies rather than being singular in focus. Marketing and analytics are still trying to figure out relationship-level attribution. You’ll see more and more approaches hit the market in the coming months and years. The truth is, there is no silver bullet here either, you’ve got to test and learn.

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Five: Marketing is focusing on relevance, not volume

Nothing says “I don’t know you!” like a “Try our credit card!” offer to someone who already has your card.

We’re seeing too many financial services companies marketing to all customers who are eligible for a product or service. The problem is that the customer can see that you’re not trying to be relevant, that you’re throwing everything against the wall in hopes that something sticks. This puts the burden on the customer to figure out which products mean something to them, and that’s asking too much. It’s your job to get them what they want.

Personalization means tailoring the offer or message to those who will find it relevant. The communication doesn’t always have to be an offer; it could be a reminder of a particular benefit or education based on their life stage. To start marketing less, but with more personalized precision, align behind these three simple strategies:

• Be disciplined.• Test and learn.• Target, target, target.

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Conclusion

Personalization is important, nay, required. And not just because it’s good marketing practice, but because your customers expect it. If you want to win and keep their business, you need to step up and do your part. In this e-book, we’ve outlined 5 trends and 5 insights to help you succeed at personalization (shown here).

Now that you understand some of the key trends and insights around personalization, it’s time to evaluate your current capabilities. We expect to continue seeing this shift toward insight-based, customer-centric, real-time ultra-personalization using unified platforms and channel integration in the financial services industry. The key to thriving in this environment is developing a plan, testing (and learning from your results) and ensuring you have the right resources.

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Trends

Insights


To get started, consider these questions:

1. Do you have a consolidated marketing database (a relatively complete view of the customer/prospect)?

2. Are your considering service interactions as a critical part of your marketing strategy?

3. Is your customer strategy based on promotional history as well as recent customer interactions collected across channels and touchpoints?

4. Is your preference center multi-faceted and specific to channels and products?

5. Are you taking customer needs into account when calculating next best interaction/offer?

6. Does your measurement of attribution span multiple interactions?


About Epsilon

Epsilon® is an all-encompassing global marketing innovator. We provide unrivaled data intelligence and customer insights, world-class technology including loyalty, email and CRM platforms and data-driven creative, activation and execution. Epsilon’s digital media arm, Conversant, is a leader in personalized digital advertising and insights through its proprietary technology and trove of consumer marketing data, delivering digital marketing with unprecedented scale, accuracy and reach through personalized media programs and through CJ Affiliate, one of the world’s largest affiliate marketing networks. Together, we bring personalized marketing to consumers across offline and online channels, at moments of interest, that help drive business growth for brands. Recognized by Ad Age as the #1 World’s Largest CRM/Direct Marketing Network, #1 Largest U.S. Agency from All Disciplines and #1 Largest U.S. Mobile Marketing Agency, Epsilon employs over 8,000 associates in 70 offices worldwide. Epsilon is an Alliance Data company. For more information, visit www.epsilon.com and follow us on Twitter @EpsilonMktg.

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Documents

Epsilon’s 5 & 5 - Consumer Bankers Association5_personalization... · Epsilon’s 5 & 5 for financial services 5 trends and 5 insights to ... personalization that will guide you