It’s official: lack of knowledge of your customers and the resulting poor customer experience is now the number one quoted reason for loss of market share and performance. Jon Picoult, of Watermark Consulting, compared Forrester’s Customer Experience Index with company stock performance over a five-year period and discovered that revenue growth in companies with strong customer experience outperformed companies with poor customer experience.

The banking industry woke up to this fact a while ago. As a result, digital banking became mainstream, facilitated by consumer comfort around internet security and a desire to interact less with branches and customer service telecenters. Fast forward to 2016 and the perfect customer experience is actually a more complicated mixture of digital and physical interactions. Understanding who your customers are as well as the where, when, how and why of their behaviors is integral to achieving this omni-channel experience.

A delicate balance: digital investment vs the personal touch

As big banks have raced ahead with technology transformation, it could be argued that personal service has suffered. Conversely, smaller community and retail banks have struggled to balance investing in digital channels while still maintaining their traditional strength of face-to-face service. When a value proposition is based on relationships, how does one balance the need for face-to-face attention while simultaneously catering to customers who interact solely on digital channels?

By valuing personal touch and local decision making some retail banks are retraining their staff to handle just about any question a customer could ask. For example, Andrew Richards, Director of Regional Retail Banking for Metro Bank said, “there is no silver bullet in terms of technology, or magic products, instead we make sure we’re listening to our fans (customers) and having all colleagues empowered to help a customer instead of having to go through central teams”.

Forget marketing to broad groups

First Financial Bank of Cincinnati acknowledged that more customer insights would help the bank build a better experience across all channels. They acquired detailed information about their customers via analytics tools such as where they live, what assets they own and household demographics. Quoted in American Banker, Anna Western, Vice President of Marketing for First Financial said, “Marketing to broad groups, like saying you’re marketing to millennials doesn’t work anymore. Micro-targeting has allowed us to deliver different messages with a specific call to action for many different groups”.

Both these examples illustrate how banks are developing an obsessive focus on the customer in the pursuit of more knowledge and insights. However, the more data you look to acquire, the more robust the framework needed to gather it and then derive a customer engagement strategy.

Here are 5 steps to help you become customer obsessed:

  1. Define your customer audience: Understanding your target audience is a crucial step towards identifying which engagement strategies will work. Personas are often created and maintained by the marketing department in your organization. But if you don’t have personas, you should to talk to salespeople or customer-facing staff who can define characteristics about target customers. This can help you create “archetypes” of customers.
  2. Define where your customers interface with you: As the examples above illustrate, it is more important to effectively communicate with the right external users at the right time, than it is to communicate with a large number of people. In fact, Metro Bank deliberately worked on getting the customer experience right first before expanding branches. So the second step is to research what channels your customers use so you can effectively deliver content to the right channels, but usually not all of them simultaneously.
  3. Define how your customers can communicate with you: As the First Financial example shows, you need to understand how your external customers will choose to communicate with you. Once you understand which points your external users are driving a conversation, you’ll want to build a system to respond and carry the conversation forward. Here is where your work to define personas is important: aligning feedback from your customers into your internal process depends on understanding personas, for example, millennials may review banking products on Twitter or Facebook.
  4. Define who in the bank will listen and respond: Once you understand how your customers group into different personas you can decide the different roles or areas of your organization to engage with external customers. One European bank decided to appoint staff who were millennials themselves to facilitate discussions with customers communicating via Facebook or text. Calling them “funky facilitators” these staff were more effective as the millennial customer did not perceive them as an authoritarian figure and opened up more to their needs.
  5. Define how to measure your customer effectiveness: Your team will rally round driving stronger engagement practices for your organization if you are measuring effectively. There are too many analytics tools to recommend here, so our approach would be first to define KPI’s and then make them visible to the whole team.

Conclusion

You may or may not choose to adopt Metro Bank’s lead in calling customers “fans”, but by implementing these five steps you can start down the road to differentiated customer engagement and retention. According to Jon Picoult’s Watermark study, this could be the most effective revenue growth strategy you will employ in 2016!