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Digital channels opportunities for retail banks

Published: Thursday, 19 February 2015 11:20 by Katharine Hulls, VP Marketing
Contextual Marketing

Increased use of digital channels is driving cross-sell and up-sell opportunities for retail banks.

There has been much attention in the media recently about how great offers and new deals only available to new customers. To counter this, one high street bank has made the focus of its latest TV advert the fact that its offers and deals are available to both existing and new customers.

The concept of banks cross-selling and up-selling to customers is an interesting one because, as evidenced above, it does not seem to have been a focus for this sector’s marketing efforts.  Yet, the more products an individual customer uses a bank for the higher the profit per customer; a key retail banking success metric.

It would appear that this is now changing however, with banks understanding that they are not immune from the need to become much more customer-centric in today’s world of the demanding, fickle consumer. In the second blog of the retail banking research series, Katharine Hulls, VP Marketing at Celebrus Technologies discusses the various marketing channels that are being utilized by both UK and US retail banks, the level of personalization and the way organizations are exploring opportunities for successful up-selling and cross-selling.

Putting retail back into retail banking
As a result of some online secret shopping research at US and UK banks, a striking difference was found in the look, feel and usability of their websites, as well as the availability of interactive online tools. Less than a third of the UK and only 50% of US banks surveyed offered a savings calculator on their site, with one of the UK banks allowing a maximum value input of just £250 per month investment. For a savings calculator, this seems far too low! Providing a savings calculator on the home page of the site is an effective way of learning more about your existing customers’ intentions and interests which they might not have discussed directly with you for some reason. Perhaps they are shopping around!

By matching individual-level website interaction data with customer data, a bank can arm itself with a strong list of prospects for follow-up, whether that be by website personalization, email, SMS or even a very customer friendly outbound call from the contact center.  This type of action has driven very positive results for insurance companies who have achieved a 30% increase in conversion rate when they gave a friendly call to existing customers who had been using their online insurance premium calculator to get a quote for another product.

It’s good to talk
Live chat windows are also a regular sight on many retailer websites, with many consumers preferring to communicate with an advisor this way rather than by phone or submitting an online inquiry, let alone visiting a branch. As well as providing a modern channel for efficient customer service, live chat provides a great opportunity to cross-sell and up-sell other financial products to the customer, especially if the advisor can see data about what products and services that customer has been browsing on the website. It was therefore surprising to see that only one of the UK banks offered live chat. By contrast,  over half of the US banks (six) offered this functionality, suggesting that perhaps the US retail banks better understand the benefits that live chat can bring, not just to their customers, but also to their own business costs and efficiencies.

There might not be an app for that
Many of the banks in our survey have invested in mobile technologies, with 80% of UK banks and 90% of US banks offering customers an app. However, the promotion of apps for UK banks and their availability was found to be lacking when compared with the US banks. Only a third of UK banks surveyed actually promoted the app on the homepage, with one hiding it under the ‘mobile banking’ navigation tab. Again, the US banks’ use and promotion of apps was more advanced than the UK, offering the app in both an iOS and Android version, showing that they are catering for a wide variety of smart phone users. However, the UK apps did offer a wide variety of mobile banking functionality – from balance checking to money transfers to finding your closest ATM.

The research undertaken by Celebrus Technologies has shown that retail banks in both the UK and US do understand the value of the digital marketplace and whilst there are some clear areas for improvement, the basic concepts are in place. The US banks are ahead of the UK in several areas of digital marketing, driven perhaps by their more competitive banking marketplace which has a wider choice of options for consumers.  US banks therefore have to try harder to both keep and cross-sell to existing customer and acquire new ones. With a number of new and highly innovative financial services providers invading the UK market however, banks in Britain need to quickly step up their digital market game if they are to retain their dominant positions and not lose out to agile competitors. The right data foundations and technologies are going to be critical if banks are to become truly customer centric, particularly when it comes to engaging and enticing the next generation of digital native banking consumers.  By joining the dots from across the multitude of digital and offline channels and devices, retail banks can build up a 360 degree single customer view, drive highly personalized multi-channel communications and deepen customer analytics.  Done right, that type of insight and data-driven action will:

  • Enhance the customer experience and minimize customer service problems
  • Increase up-sell and cross-sell opportunities and maximize profit per customer
  • Maximize business efficiencies and optimize spend
  • Increase customer engagement and engender loyalty

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