February 22, 2013

It’s not news that U.S. banking models are changing. Fluctuating market dynamics include regulations reducing traditional sources of revenue, and gradually rebounding employment rates that are sparking renewed opportunity and competition for credit card products. Additionally, technological advances are allowing for greater opportunity to connect with customers: smartphone usage and tablet adoption are driving higher consumer expectations of mobile and digital banking experiences, and big data is encouraging insights on customer spending and behavioral attributes.

In addition to these shifting macro factors, we are in the age of the empowered customer, in which brands are crafting customer-centric strategies to stay competitive, and are optimizing the customer experience at every touch point. Financial institutions have reached a tipping point in which they need to leverage these technological advances, while maintaining focus on the individual customer, to ultimately move to the top of the consumer’s wallet.

For instance, Citi is adopting a strategy to better engage customers by utilizing big data to gather a combination of credit card spending, smartphone geo-location and behavioral activity information to initiate one-to-one localized marketing via mobile for customers who opt-in. The marketing goes beyond personalization (what you know about the person) to contextualization (adding current behavior to past history), which means highly relevant marketing in real time.

Citi is just one bank that recognizes that new value opportunities exist when customers receive differentiated digital experiences. Leveraging customer data further enhances these experiences, and engages in a personally relevant manner that makes a customer feel known and valued, thereby building an emotional connection to a brand and deepening loyalty. And when relevant, real-time experiences are delivered via the most engaging digital medium – online video – the message is as compelling as it is informative. Here are four ways banking institutions can deliver effective and engaging videos to customers in order to rise to top of wallet.

Drive card activation and early utilization with new customers

First impressions are everything. The first 90 days of a new customer relationship are critical in making or breaking the connection; customers need to be assured they made the right decision. Banks have the best opportunity to influence utilization by proactively onboarding customers with ‘welcome’ experiences that can be the difference between an active and inactive account, and further, the difference between occasional and frequent spending. When banks engage new customers in a manner that is relevant and informative, the bank’s likelihood of gaining customer trust and increasing levels of brand engagement, loyalty, and hence, spending, is high.

Banking institutions can leverage customer data to generate a smart video presentation to proactively educate the customer about his new account, briefly explain the first statement and payment due date, highlight value-added services (such as autopay), and recommend actions that deliver a great experience.

Enhance the customer experience with the first statement delivery

Extending the personalized video experience to the delivery of a customer’s first card statement offers opportunities for care cost containment, specifically by reducing the number and duration of statement-related calls from new customers. And as with onboarding videos, smart video statements include promotions that drive up spending, uptake in value-added services (such as paperless statements), and enrollment in loyalty programs. Again, this offers deeper levels of brand engagement, improving the overall customer experience.

Boost reward redemption, ultimately fostering long-term loyalty and value

Banks must be effective at encouraging customers to redeem rewards, as this has significant influence over top of wallet and total spending. Loyalty program marketing typically tailors communications, promotions and offers based on segment or persona-based attributes. Smarter applications of video take loyalty initiatives a step further with more memorable and effective brand engagement than traditional marketing tactics, enabling deeper levels of contextual relevance and more targeted calls to action. In addition to segment or persona-based attributes, historical data (such as purchase history) and situational data (such as the recognition of a life event) can be leveraged within the video experience.

For instance, a video scene could feature the customer’s points earned on recent transactions, followed by a scene of eligible and relevant redemption offers based on the customer’s recent life event (e.g., the purchase of a new car) or spending history (e.g., a frequent traveler). These videos enhance loyalty marketing initiatives, delivering increased program enrollment and reward redemption rates that exceed that of mass communication tactics.

Deliver targeted and relevant cross-sell and upsell experiences

Smart banks invest in cross-selling and upselling to own as much of the customer’s wallet as possible, especially as traditional revenue sources continue to diminish. As with loyalty marketing initiatives, behavioral analytics and segmentation data enable rich customer insights and an ability to tailor marketing offers in order to maximize customer profitability.

Connecting with customers at an individual level – as someone the bank knows personally – can derive additional customer value, simply by leveraging the same profile, historical and situational attributes in previous customer touch points. For example, banks can deliver a video presentation that shows where the customer is spending, and then offers a tailored promotion or reward for the spending behavior, such as a VIP airline credit card. Tailored offers can also be included within the previously discussed customer onboarding or card statement videos.

Regardless of the use case, leveraging data to engage customers in a personalized and contextualized way with video not only addresses consumer demand for better digital experiences, but also allows for differentiated experiences that keep banks competitive and propels them to top of wallet to grow revenue.

Jim Dicso is the president and chief revenue officer at SundaySky