Lessons from the Long Road to Personalization in Banking

Most financial institutions grasp the need for personalization in a world used to Netflix. A true 360 degree view of customers is tough to pull off, however. That's why financial marketers still rely on personas. The marketing head at a mid-sized community bank details their journey toward one-to-one marketing, a far superior place to be.

To all the marketing and retail banking executives out there who may be feeling like their institution will soon be left “eating dust” as the rest of the world roars off toward digital banking and marketing nirvana, don’t despair.

Yes, the trends are real. Yes, they are challenging the established order in banking. But no one has nailed it yet.

Even mighty Amazon doesn’t always get it right. If you have a shared account, you’ll know that their recommendations don’t always make sense.

And the megabanks, despite spending gazillions and having some awesome front-end features, still get tripped up by platforms that provide a customer with two different balances for the same account at the same time.

“The notion that offering a personalized customer experience is purely a retail banking goal is false.”

For the majority of traditional banks and credit unions, digital transformation is a long road, but one that can be successfully navigated in stages. The effort of Investors Community Bank to begin to apply Netflix-like personalization to its customer base is instructive. Investors, a $1.5 billion institution based in Wisconsin, is typical of many community banks in that the vast majority of its balance sheet consists of business-related credit, including agricultural loans. Retail is a small percentage of the loan portfolio, but retail deposits are crucial.

‘Personalization on Steroids’

The notion that offering a personalized customer experience is purely a retail banking goal is false. While many personalization examples relate to consumer banking products, Laura Wiegert, SVP of Marketing for Investors Community Bank, believes the concept applies equally to business, farm and retail customers. Personalization is all about recognizing the unique needs of each customer she states.

“On the retail side,” says Wiegert, “it’s about knowing personal financial habits, tracking big ticket purchases. On the business side it’s all that and more, because we also get to know their business — what do they make, what are their annual sales, how many employees do they have, what’s the economic outlook for their industry? There’s so much more to know about a business customer, so much data to look at. It’s like retail personalization on steroids.”

Too often personalization is viewed as mainly a marketing concept. Wiegert believes you can’t separate customer experience from marketing with regard to personalization.

“Our goal is to deliver an exceptional customer experience,” she states, “and what better experience to deliver than a personalized experience?”

Wiegert fully believes that society as a whole has come to expect that, and that the big technology and ecommerce companies are the main reason.

The essence of what Netflix and Amazon are doing comes down to this: “Based on data, we understand who you are and we can help make things easy for you.” That’s what personalization is all about and what financial institutions must do.

— Laura Wiegert, Investors Community Bank

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Why Personas May Fade Away in Time

To achieve full understanding of the customer through data is tough for any business, but especially for those that did not begin life as digital enterprises. So for most banks and credit unions, achieving the much-cited “360 degree view of the customer,” is a Grail-like journey.

To fill the void, many financial institutions, including Investors Community Bank, have resorted to aggregate views of customers — personas — to allow for segmentation and some personalization. Investors has personas for farm customers as well as for business and retail customers, says Wiegert.

Their business persona is “Dave,” she tells The Financial Brand. Based on customer surveys and conversations with the team that works with customers like this, persona Dave is a 48-year-old married man with two kids in high school. He is in the manufacturing industry and worries about his expansion projects and business transition because he wants to retire in ten years, according to Wiegert.

The bank has done well with personas, she says, but personalization will take it much further. Knowing the scoop about the real Dave is better than “Dave” the persona. “Instead of an aggregate, we want to look at Dave Smith who lives at 123 Main Street and has a credit rating of 742,” says Wiegert.

Personas may not disappear as marketing tools, but Wiegert is certain that individualization — or one-to-one personalization — is where banking is headed.

Key Insight:

“People don’t want to be lumped into a group. ‘You need to know who I am,’ they say, ‘not me as a Millennial or me as a Boomer’.”

Community institutions pride themselves on knowing their customers — particularly the small business customers that are their bread and butter. Wiegert absolutely agrees with that observation, but points out that such knowledge is not easily tapped by marketing automation systems. In today’s marketplace you must have a system to be able to look at the data, she observes. For it to work, the data must be clean and consistent, and be able to easily be combined with external data “so we can accurately make the best personalization decisions for our customers.”

To get there, the bank plans to implement an enterprise CRM system in 2022. It will integrate all of their platforms including the sales pipeline, loan origination systems, email and social media.

Wiegert says the CRM platform won’t just be a sales and marketing tool, however. It will also provide a one-stop data shop for the bank’s employees to better enable them to do their jobs. But the primary focus is to help the bank better know their customers.

Near-Term Benefits from Personalization

Even before it installs a CRM system, Investors has implemented several smaller steps that are having a big impact.

For example, Wiegert says personalization can impact both targeted product offers and what she calls “education.” She regards them as equally important and explains that the bank has been working with Total Expert to help set up a weekly personalized customer blog. In addition, the vendor is also helping them set up follow-up journeys.

“If you click on one of our blogs,” Wiegert explains, “then you’ll get a follow-up email that says, ‘We saw you liked this, and so we think that you may like more content like this, so why don’t you check out this article?’

Why It Matters:

Personalized financial education is key to being that advisor, that trusted partner for customers. It builds your institution’s reputation as a thought leader.

Even more than the blog-based journeys, Wiegert is particularly excited about launching digital onboarding. The program will start simply with retail customers signing up for the bank’s rewards-plus checking account. The program, also being built with help from Total Expert, will have a series of personalized emails sent at intervals ranging from 24 hours to six weeks. Each message will contain a “micro journey” depending on what they click on within the email, according to Wiegert.

The system will assist Wiegert to present the ROI of personalization, something all marketers struggle with, she says, beyond basic click-through and open-rate metrics.

“We’ll be able to say, ‘We sent a targeted email. This person opened it, clicked on our call to action, subscribed to our blog, and now has just opened a checking account with us.'”

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