The travel industry has proven how access to individual transaction-level data can enable highly contextual marketing activities, resulting in consumer loyalty, engagement and market growth. Can the banking industry follow the same model?
According to a report from Forbes Insights, organizations that are “leaders” in data-driven marketing report far higher levels of customer engagement and market growth than their “laggard” counterparts. In fact, leaders are three times more likely than laggards to say they have achieved competitive advantage in customer engagement/loyalty (74% vs. 24%) and almost three times more likely to have increased revenues (55% vs. 20%). Leaders in data-driven marketing are also more than six times more likely than laggards to report achieving competitive advantage in increasing profitability (45% vs. 7%) and five times more likely to have succeeded in customer retention (74% vs. 13%).
The report, Data Driven and Digitally Savvy: The Rise of the New Marketing Organization, found widespread agreement that data-driven marketing is crucial to success in a hyper-competitive global economy. “Effective data-driven marketing draws on resources from across the enterprise, not a single department,” says Bruce Rogers, Chief Insights Officer and head of the CMO Practice for Forbes Media. “And without data, marketing is not based on customer intelligence.”
The Forbes study also found that the travel industry was a clear leader in achieving competitive advantage through data-driven marketing. Sixty-seven percent of travel executives said they have achieved a competitive advantage in customer engagement/loyalty, 56% in new customers and 59% in customer satisfaction.
The question is, can financial marketers learn from the travel industry?
Advancements in technology — specifically the mobile device — and in data analytics greatly enhance the ability for all firms to connect with consumers. Similar to the banking industry, the travel and hospitality industry was forced into digital transformation because of disruption that initially took place almost two decades ago.
This transformation continued as new digital only players competed with traditional travel firms. These disruptors that set consumer expectation ranged from Expedia, a full service booking agency that entered the marketplace 20 years ago, to the more recent phenomena in car service, Uber and lodging with Airbnb.
The Digital Revolution Began 20 Years Ago
Expedia entered the marketplace in 1996 offering online travel options to consumers. The transparency and online price comparison tools yielded an overwhelming customer acceptance to this new way of booking travel. Consumers now had the ability to book their travel online with all information a travel agent had at their own fingertips.
In November 1996, a Wall Street Journal ad announcing Expedia hit the streets. There was little notice from the travel industry since travel agents around the world did not think online, self-serve booking would take away any of their direct business. Within 4 months after introduction, Expedia was already booking $1 million a week in travel revenue. Today, the digital transformation continues with mobile usage.
Mobile Enables On-the-Go Booking
Depsite the small screens of smart phones, mobile adoption for booking continues to be on the rise. In a recent analysis by eMarketer, online travel bookings are decreasing while mobile bookings continue to rise. In 2016, 51.8% of all digital bookings will take place on a mobile device, which is up from 43.8% for 2015. In fact, eMarketer has had to continue to adjust mobile usage predictions upwards because the travel industry continues to make self-service booking swift and easy on the mobile device.
A study by Expedia similarly found that there were 156 million US consumers that engage with digital travel content and 90% of monthly travelers do so on their smartphone or tablet.
Mirroring the challenges found in the banking industry, the travel industry was faced with the challenge of effectively mining essential data points from multiple silos within their organization and across product lines. The airlines, car companies, lodging firms and cruise lines were tasked to determine a means of consolidating their data across bookings, payments, loyalty programs, operations, complaints, & social media.
Not only were these firms needing this insight internally, they needed to make it available to the consumer as well — on their smartphone. For example, a typical airlines app contains loyalty information (rewards data), reservations — past, present and future (bookings), a view of payments (finance), boarding passes (travel operations) and provides the option of real-time alerts regarding flight status. This data is being effectively pulled from disparate systems, with the mobile device being the critical delivery channel for the traveler.
Keys to Digital Transformation Success
The Selligent Trend Report, Digital Transformation in the Travel Industry, commends the travel industry stating, “Since travel vendors have staked out their digital real estate, networked their owned properties across online channels as well as partner sites, and built a loyal customer base, they are perfectly positioned for the next wave of change — big data combined with intelligent analytics.”
Integrated digital optimization that is heavily reliant on data and analytics is a must to effectively engage the customer. Banks can learn from the digital transformational success of the travel industry as the challenges travel faced are very similar. Let’s take a rearview look at the digital struggles travel organizations were facing 5 years ago, according to Aditi report, What’s Keeping the CEOs of Hospitality Companies Awake at Night.
- The mobile app not being a priority
- Old technology and platforms hindering transformation
- Lack of a single view to the customer
The Aditi report highlighted 3 power moves working together as attributes for digital transformation success:
1. Business Tranformation — Embracing new technologies by transitioning from physical to digital services for travelers.
2. Customer Experience — realizing the value of the travelers personal data across all touch points, to help build consistent and personalized experience throughout their journey by using a predictive analytics approach and knowledege from social channels.
3. Digitizing Operations — building digital products that include agility in the platform build to assist with easy rollout of new products and ideas
The Glistening Diamond in the Big Data Rough
When we take a look at what is important to the traveler, it is similar to what is wanted by the banking consumer. The compelling take away is that the consumer is crystal clear in letting us know exactly how to better engage with them. Consumers in both industries want their business partners to know them, to look out for them and to reward them.
The glistening diamond in the big data rough is to connect with customers on an individual, real-time and contextual basis. This requires sifting meticulously through internal and external big data to grab the relevant insights. The missing link is then to use these insights to build the best consumer experience.
In other words, to successessfully engage either the travel or banking consumer requires integrating all data assets. Big data provides a wealth of information, this information is only truly effective when relevant data points can be quickly and easily extracted for analysis and individualized for one to one communication.
The banking conundrum is that big data is meaningless without being effectively mined. It is a tremendous challenge to pull together the disparate internal systems, digital data assets and 3rd party data resources together. The most powerful engine is a combined prospect & customer database platform that is flexible, nimble and transparant. One that unites all digital assets with behavioural and aspirational attributes to provide a single view that will empower bank marketers to engage in contextual, relevant and real-time bank offers.
This single view objective includes a strategy to communicate on the smartphone device that never leaves the consumer’s side. Organizations can rise above the rest to provide an exceptional customer communication experience when, where and how the customer wants to be spoken to, by overcoming three challenges according to a joint white paper, Your Customer Journey, Travel and Hospitality by Epsilon & Adobe.
- Move past data silos
- Get a 360 degree customer view
- Move from simple personalization to contextual interactions
Support a Mobile-First Experience
No matter the device, from the minute they wake up to the minute they go to sleep (and sometimes while they sleep), people today are plugged in as depicted in the illustration below.
While the consumer wants businesses to be a part of their experience, they expect everything to happen on their terms. This is truly communicating to the consumer at the right time, right place, right channel and the appropriate device. It’s no surprise that the mobile device is with the consumer from wakeup to retiring for sleep. This is our new stay connected reality. It is the way consumers stay connected personally, socially, professionally and as shoppers.
Bank customers are primarily using mobile banking to review transactions, process deposits, make transfers and handle everyday banking needs. Most of the mobile investment from the bank is for the real-time accessibility of transactional data. Consumer expectations are higher and therefore must be thoroughly understood in order to drive exceptional customer experiences.
Expectations for great mobile experiences come from Uber, Best Buy, Amazon and travel industry leaders. These organizations have incorporated business transformation to offer the same experience across channels and devices. They focus on the customer experience to effectively pull in the relevant points of big data to truly demonstrate they are looking out for the consumer’s specific best interests. And, they have nimble digitization to easily add more product and services to the app quickly.
This is no longer about customer experience, it is about expectations.
Beth Merle is the Vice President of Enterprise Sales for Financial Services at Epsilon. A senior sales and marketing leader, business developer and client relationship builder, Merle is an experienced strategic solutions provider who has expertise working with major organizations with a tenured focus in financial services. You can also follow Beth Merle on Twitter by clicking here.