Breaking down the barriers to customer acquisitionPublished: Monday, 09 February 2015 16:38 by Katharine Hulls, VP Marketing
Recent research undertaken by Celebrus Technologies has compared both UK and US retail banking markets. In this first of a two part blog series, Katharine Hulls, VP Marketing at Celebrus Technologies looks at how user friendly the retail banking landscape is for potential new customers, and whether UK and US banks are making it difficult for prospects to engage online.
Widening the net
Retail banking as an industry has had it tough over the last few years and is now subject to stricter rules and regulations than ever before. New initiatives such as the Current Account Switching Service – designed to make it easy and straight forward for consumers to move current accounts - is also placing additional marketing pressures on banks as they try to hold onto existing customers whilst tempting new ones away from competitors. Layer on top of this the open-mindedness of today’s consumers to getting their financial services from a mix of innovative new providers, and it’s understandable why banks are pushing to become more customer and digitally focused rather than relying so heavily on the old paradigm of relationship marketing. However, as the recent Celebrus Technologies research has shown, many retail banks could do more to improve their chances of acquiring new customers, if they only made it easier for consumers to engage with them.
When analyzing the use of email marketing amongst retail banks, it was shocking to see such a low volume of banks actually using this channel for prospect engagement. Of the ten major UK retail banks researched, more than half (six) had no way of collecting email addresses of visitors to the website. Two UK banks offered only existing customers the means of communicating via email, whilst the remaining two banks could email visitors their savings quotes after using the online calculator, but only after they completed a long, complicated and detailed form. The same was true when looking at the US retail banks, as all of the ten surveyed required visitors to submit a social security number in order to receive email quotes for savings accounts. Whilst regulatory requirements do exist, they do not include the need for detailed personal data this early in the savings account application process, so banks do not need to put this barrier in the way.
The benefits of email marketing have been proven countless times across a huge variety of sectors, so it is surprising that so many major UK and US retail banks are not capitalizing on the opportunities to engage with potential new customers via email. Sending follow-up emails to those that have browsed the site, particularly if they contain relevant messages based on the products the individual looked at, is a very powerful marketing tool when used correctly.
When it comes to acquiring new customers, there was a general feeling amongst the Celebrus researchers that the US banks were easier to engage with and seemed to be more open to accepting new customers. For example, over half of the US banks offered an online help chat service and an average of only 3.1 steps before a personalized area was accessible. In the UK however, there were on average 3.6 steps to go through, and four of the UK banks offered no personalization at all. Perhaps more surprising however is that across the UK and US, even once the researcher had handed over a raft of details and submitted the necessary forms, the communications they received contained no personalized information at all. So whilst the consumer has taken the time to provide these in-depth, personalized details, they are still not being used to the customer’s benefit.
Utilizing Social Channels
It is encouraging to see that 90% of UK banks are utilizing Twitter as a social media channel with the majority (eight) also having Facebook pages and seven promoting YouTube channels. The same is reflected in the US statistics, with 100% of the banks having Twitter accounts, and 90% having a YouTube channel and/or Facebook page. Many banks have also invested in mobile technologies with 80% of UK banks and 90% of US banks offering customers an app.
Overall, the Celebrus research (Putting the Retail into Retail Banking) has shown that, whilst many banks across the UK and US are stepping up their digital game to better engage modern, comparison-site using and deal-hunting consumers, there are still too many barriers to slick and really effective customer acquisition. There are no doubt critical regulatory and compliance requirements to be met, however it appears that many banks are missing a trick by placing barriers too early in the customer acquisition cycle. Is it absolutely vital to collect all the data on a person who simply wishes to use the savings calculator? Could it be better to allow visitors access to such tools in exchange for an email address which can later be used for targeted email marketing, then gather further data as they move through the sales cycle?
By harnessing the right information at the right time, retail banks can transform their customer acquisition effectiveness, increase net new customer volumes and enhance the potential customer experience.