To keep pace in digital channels, financial marketers must adopt a more nimble and responsive approach, where decisions are guided by data and continual testing. In digital, it's all about how quickly you can pivot.
Most industries are facing major technological and digital challenges, but financial services are facing the most complex. In recent years, financial institutions have expended tremendous energy on recovery and regulatory activity. They’ve fallen behind other sectors, and now they need to transform quickly.
In their everyday lives, consumers are accustomed to a variety of immediate, personalized and mobile services. They can get what they want quickly with a click or two. Customers demand a certain ease of doing business. They expect personal attention from their financial providers, even though they usually manage the relationship digitally. This creates both a challenge and an opportunity in digital channels, where quick changes, testing/learning, and personalization can all be accommodated.
Meanwhile, the financial industry is becoming increasingly complex by the day, with more options available to consumers and new providers for banking, insurance and investing. Unfortunately marketing isn’t keeping up, and for a host of reasons. Financial services marketers cite several barriers to achieving better performance:
- Lengthy go-to-market processes
- Siloed approach to marketing
- Higher volume of work than ever before
- Risk and legal reviews
- Disparate, unintegrated systems
The speed of marketing and service delivery innovations have accelerated, but traditional financial service providers are struggling with legacy systems and outmoded processes. Instead of responding in real-time, financial marketers are more likely to spend six months (or more) getting to market. The approval process also continues to be burdensome, leaving many marketers unable to cut through internal red tape.
Marketers are struggling to better anticipate, react to, and capture opportunities. Facing internal and external pressures, their marketing teams are expected to adapt to change, grow new relationships, and nurture those they already have. To address these new market realities, several financial service companies such as Citi, Capital One, Wells Fargo, and Scottrade have been rebuilding themselves around the concept of “agile marketing.” They have embraced agile marketing practices to be more adaptable and customer-focused in their strategies and actions.
What is “agile marketing?” This concept has its roots in digital technologies. It was created in 2001 by software developers who were looking for ways to streamline their work, collaborate better and release products more quickly. It is a mindset and methodology that transforms culture and operations so you can execute more efficiently, champion the customer, and achieve better performance through a data-driven, iterative approach. More recently, marketers have adapted this agile methodology:
- Responding to change vs. following a strict plan
- Rapid iterations vs. big bang campaigns
- Testing and data vs. opinions, tradition, habits and conventions
- Numerous small experiments vs. a few large bets
- Individuals and interactions vs. target markets
- Collaboration vs. silos and hierarchy
Outlined below are three shifts that financial institutions must make if they are to succeed with an agile marketing strategy.
1. Build Empowered, Outcome-Focused Teams
Consumers expect a seamless experience, yet most organizations are not structured to deliver it. In an agile marketing model, teams are structured to break down those cross-functional barriers. Teams are empowered to work together to solve problems, experiment, to test and learn, to improve the experience. Teams are given a problem to solve and are accountable for solving it. With leadership support, they are empowered to experiment, and are trusted to act without the layers of bureaucracy and hurdles of red tape.
This shift to collaborative, jointly accountable teams drives improvement in culture, motivation, and satisfaction among employees. After completely transforming to a more collaborative, empowered, and integrated team, one executive leaders noted how the level of employee engagement and responsibility had increased: “Because they own certain things, they drive them differently than they would otherwise. It forces them to look at the business purpose of what they’re doing. Generally speaking, it makes them smarter.”
2. Focus on the Customer
One of the biggest challenges for many financial institutions is to be customer centric. Two-thirds of financial companies consider a customer-centric business model very important, but only one in five feel prepared for it. Agile marketing puts the customer at the center of strategy because all decisions are prioritized based on the impact to the customer experience. Agile marketing builds in the flexibility necessary to make course adjustments based on actual customer motivations, behavior and responses. Agile marketing yields personalized communication that helps accelerate customers through their buying journey.
Agile marketing starts with a discovery process that defines personas and the customer journey. These data-driven insights become the backbone to establish priorities, grow segments and achieve marketing KPIs. Data is used to assure that marketing efforts will meet — or even anticipate — customer needs at each touchpoint along the buying journey. The financial services sector is awash in this sort of rich data.
Kim Wells, Chief Marketing & Digital Officer at Scottrade explains how agile marketing helps her team keep the customer response front and center. “We have feedback loops not only from clients, but also from the teams that are putting campaigns in-market. We’re able to feed back into the agile core teams what’s working and what’s not.”
3. Work in Rapid Learning Cycles
Operating in short-term cycles (called “sprints” in the agile marketing methodology) can give marketing organizations the structure to test hypotheses about the customer experience and really understand how to optimize the journey. Each “sprint” is a learning opportunity where you revisit your priorities, plan your work, execute and review learnings to help guide the next sprint.
Learning is at the heart of the agile ethos. At the end of every sprint, your team discusses what you have learned about the customer and the performance of your marketing. and a sprint retrospective to discuss how to get better in how you work together. You’re constantly looking for tests that yield data that will help you make better decisions and better use of spend.
Greater Agility Means More Speed and Better Performance
A survey of banking executives by Broadbridge noted the increased pressure on financial institutions to achieve greater efficiency and cost-savings: “Many of the biggest opportunities now lie in the back and middle offices, where banks can introduce new technology, automate procedures, and reengineer processes.”
As regulatory pressures continue to constrain profitability, agile marketing offers a new way to achieve greater commercial outcomes. Agile marketing can help financial institutions improve their marketing ROI via more effective measurement, conversion, and retention. Ultimately, it makes it easier to identify and stop marketing activities that aren’t working, and focus more on what is working.
The iterative nature and speed of learning cycles focuses teams on improvements, measuring results, and making the necessary adjustments. It helps align teams around clear priorities while ensuring that they don’t lose sight of long-term objectives.