Building Personal Relationships
Though speed is a major component of the retail experience that consumers crave, they also want to feel valued by the companies with which they do business, and personalized recommendations and service go a long way toward buidling the right types of relationships. As a result, financial services providers need the best view possible of their customers in order to match them with the right products.
Rod Brooks, CMO for the Seattle-based property and casualty insurance company PEMCO (more than $300 million in annual premium), says his company's familiarity with its policyholders is a clear-cut advantage for the regional insurer. "Within retail, there are a lot of different kinds of experiences that people value: big-box stores, convenience stores, the online experience, the local store," he says. "You need to consider the clientele and the consumer and give consideration to how you can translate your brand. Once you take that position that says we've got a home-court advantage — we know the customers more than the national guys — that's the differentiator between the big-box stores and the local mom-and-pop store."
The difficulty for insurers is that once the product is sold, the customer doesn't typically make repeat visits to the site, Brooks cautions. On the other hand, banks benefit from ongoing interactions with their customers, similar to the advantage retailers enjoy in terms of being able to touch consumers multiple times and at many different points — through advertising, in the parking lot, online, he says.
The challenge, Citi's Weber adds, lies in understanding the nature of each customer interaction, and tailoring the experience accordingly. "There are a lot of people who are checking in frequently to see where their balance is, but you also have a person who comes only a couple times a month, pays all their bills, and downloads lots of information," she says. "That's why the customer experience has to be very intuitive and have speed of purpose."
When PEMCO has an opportunity to talk to existing customers, it encourages them to come back to its website and leave reviews of the products they've purchased, Brooks notes, explaining that this serves the dual purpose of reinforcing PEMCO's position as a trustable institution while also replicating a familiar experience for today's online shopper. "Retailers want to have their products and services reviewed, especially when they think that's a competitive advantage," he says. "Any time we have an opportunity to interact with a customer at one of our primary touchpoints, we'll offer them the opportunity to leave a review with us."
Knowing whether a customer has left a review also becomes a data point for PEMCO that it can touch on in its later interactions with the policyholder, Brooks adds. Retailers are always keyed in to the last time a customer interacted with them, he says, and PEMCO is making investments in its customer data systems to make sure it has that single source for all customer information.
"If someone calls, you have to be informed about what they bought, what they're open to buy, when's the last time they called, what kind of service experience did they have, did they write a review, what's the household makeup," Brooks insists. "Amazon built their company that way. But insurance companies are converting our companies to that. You can't provide a world-class experience if you have to pull up three different systems to figure that out."
Louisville, Ky.-based health insurer Humana (approximately $37 billion in revenue) has incorporated a rewards program, HumanaVitality, into its policyholder wellness initiatives. The program — which is similar to a credit card or supermarket loyalty program — awards points based on how policyholders meet wellness milestones. Humana issues customers pedometers that allow them to gain points daily, and the company entered a partnership with videogame maker Ubisoft on a fitness game that also allows point accumulation. Points can be redeemed online for merchandise.
"The future is in non-intuitive partnerships between healthcare companies and consumer-focused companies," says Shankar Ram, vice president of innovation at Humana. "What's really unique about this partnership is that we haven't just sponsored in-game content -- it's the data exchange point that's allowing us to get the data from gameplay to reward our Vitality members."
More robust data collection could help banks with their loyalty programs, according to Nigel Smith, managing director of New York-based Accenture's banking distribution and marketing services in North America. The recent Accenture Global Consumer Survey revealed that while participation in bank loyalty programs is on the rise, those programs aren't as effective as they need to be, he notes. About a third of bank customers reported that they did not know that loyalty programs were available, and less than half said loyalty programs have persuaded them to stay with their banks.
Keeping Customers Satisfied
"More customers are joining traditional loyalty programs, yet these programs are not enough to keep customers satisfied," Smith recently told Bank Systems & Technology. "Agile banks monitor customers' behavior and purchases so they can easily spot when a particular customer's commercial patterns change and respond accordingly, using advanced customer analytics. Importantly, the magnitude of these changes must be viewed through the eyes of the customer, not the bank."
But as financial services companies collect growing amounts of consumer data, it's important to make sure that security protocols are in place to handle the influx of sensitive information, stresses Wells Fargo's Wilson. "Fundamentally, financial services is based on a sacred trust with the customer," she says.
"Ultimately, customers want secure, anytime, anywhere banking using a variety of access channels," Wilson continues. "There's no question that safeguarding customer information and information security in general is a top priority."
This article contains additional reporting from BS&T's Olivia LaBarre.