Presented by Yodlee | Envestnet
Catch this VB Live event for key findings from Forrester’s report on customer advocacy in the financial services sector, “The State Of Open Banking In Australia”, and why improving customer perceptions is not only good for your brand, but good for your bottom line — especially in these uncertain times.
Access for free on demand right here.
Your customers don’t think you’re any different from your competitors, says Alyson Clarke, Principal Analyst at Forrester.
“Over the past few years, we’ve seen a huge lack of differentiation in financial services,” Clarke says. “You may think you’re different, but consumers think all banks are the same, all investment firms are the same.”
Forrester’s research and insight around customer experience, engagement, and driving customer loyalty shows that the quality of the customer experience is what drives loyalty. What they call the three Es are the major drivers of customer experience: effectiveness, ease, and emotion. The Forrester model, called the Product to Customer Experience Index, measures how successfully a company delivers customer experiences that can create and sustain loyalty.
They found that the drivers of customer loyalty are how good the experience is in delivering value to the customer, the ease with which customers can gain value from the experience, and how customers feel about their experience. In the end, loyalty comes down to retention, their interest in buying more from you, and their willingness to recommend you to others, Clarke says.
But in Forrester’s customer experience index research, analysts found that around 30% of respondents strongly agree that all banks or investment firms are the same. While this answer is pretty consistent across all generations, that number shoots up to 37% with older millennials — the generation financial services firms are most interested in targeting as they buy houses and start families.
Where financial services firms fall down the most is around that third E, emotion, Clarke says. Why does emotion matter? Because it has a significantly bigger impact on brand loyalty and revenue than effectiveness or ease.
“This is the golden secret that so many firms have not quite understood yet,” she says. “Firms that excel at customer experience, and as a consequence excel at revenue growth, at a rate that’s much faster than their peers, typically score around 70% on the element of emotion.”
These are the firms that are spending all their time investing in making digital experiences really easy and simple for customers. But the bar has now been raised, because people expect those experiences to be flawless.
For instance, she points to Amazon Prime, which has led customers to demand that two-day delivery be the standard. That ease and effectiveness have become table stakes — but it doesn’t necessarily make customers loyal, she emphasizes again. It’s emotion that makes them loyal, emotion that makes your customers stickier in the long run.
Personalization is one of the best ways to drive emotion, Clarke says, because it drives a one-to-one relationship with your customer. Even with an unknown prospect, you can still personalize the experience by asking questions, just like you would in getting to know a new friend.
“You don’t grab a bunch of data and then assume things about the person you’re meeting,” Clarke says. “Instead, you get information, and you try to understand them. As they build trust and they trust you, you get more information from them, and you can share more information back.”
You might have a basic segmentation understanding of your customer. But as the information flow ramps up, and you build a one-to-one relationship, your customer becomes willing to share more information, which in return, enables you to share insights and valuable information back to that customer.
“It’s a two-way street,” Clarke says. “This can help drive emotion when it’s done right, because personalization can create a competitive advantage that can’t be replicated.”
When you build that connection with the customer, that two-way information flow, it’s very hard for a competitor to come in and steal that customer away. They could come in with a cheaper price or new features, but customers tend to be a lot more forgiving when there’s that strong emotional connection that can come from personalization — they’re so much stickier, and they’re so much more forgiving.
“You don’t need to be the cheapest, you don’t need to have the best interest rate, because they have a relationship with you,” she says. “They just trust you.”
To learn how to actually build that kind of connection with your customers, what kind of personalized experiences customers are particularly interested in — and which drive them off — as well as real case studies from the financial services companies that are driving strong customer relationships in a world changed by a pandemic, don’t miss this VB Live event!
Access for free on demand here.
Attend the webinar to discover:
- How advocating for customers drives a sustainable competitive advantage
- Why the wealth management sector scored highest for customer advocacy in a recent Forrester survey
- How customer advocacy is linked to increased future purchase intent
- How to improve customer engagement through hyper-personalized digital banking experiences
- Alyson Clarke, Principal Analyst, Forrester
- Dustin Walsey, Co-founder and CEO, Buckle
- Jim Del Favero, Chief Product Officer, Personal Capital
- Katy Gibson, VP, Application Products, Envestnet | Yodlee
- Evan Schuman, Moderator, VentureBeat