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March 06, 2019

By: Megan Curley, VP, Consumer & Market Intelligence, RAPP San Francisco

So many elements factor into a customer’s experience with a brand or business. From marketing to customer service to the retail environment — all of these components come together to influence how customers feel about a brand. And if this experience fails to meet expectations, you can pretty much guarantee they’ll go elsewhere — well, at least 76 percent of them.

So it’s no wonder why 89 percent of companies currently use customer experience as a way to stand out in the marketplace. Few, however, succeed. When asked, people say that just 8 percent of brands deliver a “superior experience.”

If these numbers are true, focusing on customer experience may not be enough — unless, of course, you know your customers, and knowing your customers often comes down to data. Without access to customer data and a practice for collecting, mining, and applying it to your marketing practice, you run the risks of failing to meet expectations and becoming irrelevant to your customer base.

Today, 63 percent of customers expect brands to deliver new products and services more frequently than in the past, while another 70 percent of customers expect brands to understand how they use products and services. But getting to know customers isn’t as easy as it once was.

In Brands We Trust
Customers are starting to realize that their data is the new oil. It has significant value, which has led to a growing customer demand to get something in return for brand access to it. In fact, 58 percent of consumers are now considered “data pragmatists,” in that they won’t allow access unless there’s some sort of benefit. Think an email address for a free media service or phone locations in exchange for exclusive deals in the immediate area.

Even with a potential perk, consumers still need to trust a brand, and the unavoidable truth is that trust is hard won — and easily lost. That’s why it’s so important to give customers the ability to opt in or out of sharing certain information. Sure, give them a reason to say yes, but put the ultimate decision where it belongs: in their hands.

Equally critical, if not more so, is the application of this data. Once you gain access, break down those organizational silos and get the data into the hands of employees who will leverage the information in meaningful and responsible ways.

The financial services industry presents one of the most meaningful use cases when it comes to data: On one hand, it’s ripe for opportunity with access to troves of data treasure. On the other, this data is often the most protected by customers. Fintech disruptors are a considerable threat to traditional banks here, as they are more narrowly focused, nimble, and birthed in a time of modern data practice.

One such example is MoneyLion, a mobile finance platform that uses personal finance data and advanced algorithms to understand the spending habits of its members. In turn, the platform offers personalized recommendations to members on how to save money, which credit cards best match their spending habits, and more. The app also notifies users when they’re likely to make an overdraft, where there are affordable deals in the area, and how to capitalize on offers like free tax preparation.

A more traditional bank making headway in its use of customer data is Barclays, a British multinational investment bank that took a slightly different approach. Instead of focusing on the financial health of members, it’s trying to make banking easier and fairer by allowing customers to view their accounts at other banks through a new feature on its mobile app. The goal is to improve the transparency for financial products.

What Comes With Value
Nailing down that value exchange is critical to capturing the data you want from your customers. It is also a core activation of customer data, one of many that can become the foundation for a loyal customer base.

Which leads us to the question of the hour: How can financial service brands maximize the value they provide in exchange for customer data to establish long-term loyalty from consumers? The following are often a good place to start:

1. Learn. If you’re going to collect information on your customers, recognize that they are people and use the data to get to know them better. Take the time to understand their needs and goals, then make product recommendations that make sense to that specific individual. After all, not every customer follows the same path to purchase, so the same would hold true for their finances.

2. Build. In financial services, there are always opportunities to grow your relationships with existing customers. One of the most effective methods is cross-selling and even supplementing your products and services with new ones. If you’ve taken the time to get to know your base, the necessary additions should be obvious. Those will help you grow your share of wallet.

3. Teach. Look at how people spend money and use your findings to educate customers. Help them get a better understanding of their financial behavior. If they take your instructions to heart, the result could be healthier financial habits and greater financial security — all owing to your institution.

Any time you collect data, make sure you have worked through how it ultimately improves your understanding of the customer and their experience with your organization. Data is a powerful tool for earning trust among both prospective and existing customers. Using customer data to get to know them and to provide a more customized experience will determine whether customers become loyal and eventually advocate for the brand, which can result in five times more business.

It’s pretty hard to argue with that.

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