Traditional methods of customer interaction are no longer sufficient because customers are tired of being bombarded with sales offers that may or may not hold any relevance to their needs, asserts Phil Oschmann, SVP of strategic customer management for Cleveland-based National City Bank ($140 billion in assets). At the same time, the increasingly competitive environment is forcing banks to look at new ways to differentiate themselves, he says.
In the past, "Banks have made money by holding the line on spread and maxing out fees," explains Wymond Duncan, director of consulting with CGI, a Montreal-based IT and business process services provider. "Now people want a lot more control and they expect that control. ... Banks have reached their limit with fees, and customers are more demanding and less tied to their banks than the previous generation."
Patric Timmermans, director of industry and product marketing at financial services CRM-software provider Infor (Alpharetta, Ga.), says that E-mail open rates illustrate consumer apathy toward banks' marketing efforts. While banks currently have higher open rates than most industries, it's still a low 31 percent, with click-through rates of only 8.6 percent, he contends. "That means that 69 percent of the time a client thinks that E-mail is a waste of their time or spam," Timmermans says.
"From a customer viewpoint, a bank has no idea what their interests and needs are," Timmermans continues. "The opportunity for wallet share is huge if a bank does its job right." He contends that growth is more tightly linked to customer wallet share than even customer acquisition.
"A number of our customers see organic growth as their goal," Timmermans adds. "There are a lot of changes happening in what technology can bring to the financial services world. Some of the challenge is how to personalize the interaction with the customer, because that is where organic growth really starts."
"Organic growth by definition is doing more with the customers you have," CGI's Duncan says. "Start with ... [the] interactions you think will have the highest impact."