Adapting a financial company to the fast-paced digital world can present major challenges. For some, it’s not only about success in the future but a question of existence in the future. At the same time, very successful companies are making their shift and achieving extraordinary results with minimal resources. What’s their secret? After analyzing their efforts, we’ve identified five requirements that lead the transition to a customer experience mindset.
Following these guidelines allows a bank or credit union to move in the shortest possible time from old marketing models that are no longer working to the new customer experience model – using the capabilities of the modern world. Some are able to leverage the possibilities of the digital consumer world to the fullest. Why lag behind?
Hello New World
Some time ago, companies used TV, magazines, billboards and radio to inform consumers about their products and services. Those were the days when marketing was a guaranteed path to any product’s success.
If you remember, Coke, a “medicine” transformed into a refreshing drink, expanded globally via aggressive advertising. The basic idea of those times was that you can make a product from almost anything and motivate people to buy it using a marketing “push” strategy. You’ve all seen those Top-Shop TV ads, right? They were pushing all kinds of stuff, and people bought it like crazy.
We can call the Golden Marketing Age. Everything was driven in one direction: how to increase sales. It was about gaining market share, fighting competitors, manipulating customers, massive advertising, and other marketing schemes.
However, with the development of digital technology, the tools that had been proven for decades stopped working. The world is making new demands on business. To better understand these requirements, let us briefly review how the development of digital technologies has impacted the world.
The Network Effect
Today, we are seeing a sharp decline in the effectiveness of the legacy marketing model. The world is ruled by online consumption. Classic advertising channels and the usual forms of advertising no longer work. People simply ignore them. In connection with the network effect, even the most successful strategies of the past can lead to a devastating failure.
For example, in the past, almost any product or service could be sold by running a large-scale advertising campaign. Today, in the case of insufficient quality, such advertising further boosts the exchange of negative opinions on the internet, similar to an entrepreneur who ordered products from China. He created attractive packaging and paid for huge advertising campaigns, but the product quality was terrible, and multiple negative reviews on social networks ruined his business.
Nevertheless, the same network effect can be used for fast and inexpensive promotion of quality products. For example, Revolut secured two million users with no advertising budget at all. The internet, smartphones and global digitalization is disrupting the world we live in.
Direct to Consumer Connection
Previously, there were many intermediaries between the manufacturer and the consumer. Most decisions had to be made blindly tracking consumers’ reactions was difficult. Today digital channels enable businesses to communicate directly with consumers.
The internet and social networks have made transparency an inherent characteristic of life. People are not afraid to share their private information with others, exemplifying their reputation and trust in the digital environment. They expect the same from business. The way it is represented in the digital world and how active it is shows what values are important and how much it can be trusted.
Transparency has ceased to be unique. Instead, it has become an indispensable attribute of progressive companies. Consumers are seeking information about businesses on the internet, and it is important for them to understand what entrepreneurs have done, what drives them, how they relate to other people, what values they have, and how they act in difficult situations.
Therefore, direct communication through digital channels allows one to not only represent the company on the internet, but to receive feedback, establish a trusted dialogue with its followers, and become part of their network.
Non-Traditional Financial Competition
Recently, in some countries, large banks were almost monopolists because they had a very strong and stable market share. Strong barriers of the financial services market entry, loyal customers, and the absence of worthwhile alternatives ensured good positions for decades.
The development of digital technology has changed everything. Today, consumers have dozens of new alternatives every year because it’s never been so easy to launch a fintech startup. What accounts for such ease? Low entry barriers, support from anywhere in the world, the ability to offer solutions using infrastructure external suppliers, the use of outsource solutions, and cloud solutions. Add open banking to this list, and, clearly, banking will never be the same.
Not only banks and fintech startups, but also global corporations and crypto-enthusiasts have entered the battle for user finances. Only time will tell what will come of it – the largest competitive war in history or a new type of economic system based on digital cooperation.
Increased Consumer Expectations
In the old days, perception of services was divided according to their physical locations. It seemed logical that a restaurant and a branch of a bank were two completely different things. Today, technology invites you to the world of mashup, sharing, peer-to-peer, and crowds. You can have a bank, restaurant, shopping mall and a grocery store in a single space, digitally, on your smartphone. After all, both food orders and bill payments can now be made through mobile apps. This dramatically expands the usual boundaries of consumption, forming cross-industrial user expectations.
So, how can one application be easy and pleasant to use, and the other not? The most popular services set the bar high, which establish generalized customer expectations regardless of the industry.
In the digital age, it feels quite strange when a bank is asking you to fill in a form in handwriting even though you know they have all your data in their database. This process has worked this way for many years. Customers seemed to accept it and played by these rules for a very long time until products that offered the same solutions, but much quicker and simpler, appeared. And why would you choose a boring and difficult service if there are so many other choices available on the market?
Nowadays, automation is not business improvement; it’s the only way to conduct business!
In the old days, it was all about numbers. It was enough to focus on your budget, reach, conversion and, of course, sales. The outdated approach implies that the client should be “seduced” — convinced to use your service. This requires bright, interesting advertising, placed wherever possible and repeated as often as possible.
Today, it’s all about people. You can reach almost anyone at no cost, but do you have something the consumer actually needs? Do you offer something that solves their actual problem — and provides a delightful user experience? If not, there will always be someone who can and will. Some experts call this The Age of Experience.
Obviously traditional approaches no longer work. There is a huge gap between the marketing age and experience age.
It’s not about the tools we use. It’s about our mindset.
For some of us, accepting this change is hard. But there is no other way to survive in the future. To fit into the new conditions, a business must integrate it at the level of mindset and culture.
5 Requirements of a Customer Experience Mindset
We see that successful fintech companies fundamentally differ from traditional financial institutions in their attitude towards consumers and businesses. The modern approach is aimed at helping the client; it requires other business principles.
First and foremost is concern for the client, their needs and experiences. This is the only way to create an experience of using the product, so that the client would highly appreciate it and become his own advertising agent.
If you want to adapt your financial business to the realities of the digital world and do it successfully, I have collected the best lessons I’ve learned from my own experience working in the field of finance and becoming one of the pioneers of the Experience Age.
Requirement #1: Switch from Selling to Serving
Companies rigidly focused on sales, perceiving users as objects of manipulation from whom to extract money in any way possible. We have all watched “Wolf of Wall Street,” right? Therefore, such trends as Design Thinking, User Experience and User-Centricity become just marketing tools that allow the wolf to put on sheep’s clothing to lure the buyer closer and perform the win-lose model.
By contrast, companies that actively implement the work principles of the Experience Age aim to bring maximum value to the client, in exchange for which the client will gladly reward the company and support its development. This is a sincere win-win relationship that truly makes the world a better place.
The most efficient enterprises today place user experience metrics to the forefront, including Net Promoter Score, feedback monitoring, support request statistics, speed of key scenarios, retention rate, etc. This allows us to measure the quality of customer experience and make it a key value in the company.
During the Experience Age, sales efficiency increasingly depends on the service value to users. Thanks to the network effect, positive reviews become the best advertising. Therefore, the most successful companies of our time have already switched their focus from sales to service. They support their products and their culture through metrics, values and learning.
For example, traditional banks use their homepage on the internet to promote all services, turning it into an advertising platform. This causes the user to drown in a large number of offers and lose direction. Fintech companies, in an easy and accessible way, suggest starting with key scenarios, for example, opening an account and only then gradually making a contextual upsell. User experience and emotions are more important to them.
Unfortunately, some specialists believe that a knowledge of psychology is a good tool to increase conversion. But, instead of using human psychology to trick users into buying useless products, we should think about how human psychology can increase the value of our products and help to deliver an experience customers will appreciate.
Where would you place your business approach, culture and goals on this scale? What is the main driver of your activity – to sell or to serve?
Once again, “sell” is about a focus on marketing, looking at people as numbers behind conversion. Design is only about making the package attractive. UX is a tool to manipulate user behavior. “1” on the scale is about a selfish company that is driven only by profit and selling, perceiving customers as walking wallets. They absolutely don’t care about their customers’ feelings or product quality.
“Serve” is focused on customer needs, feelings and behavior. Conversion is just a metric to evaluate product clarity. The main aim is to provide real value for the customer, to make some difference with the product, and to generate a great customer experience. Selling and money comes as a result of such activity. A “10”-rated company is one that provides ultimate value to its customers by changing their life and world for the better. You might think about Google here.
How could your bank or credit union move closer to a “10”? What are the key actions that can take you closer to the “serve” principle? For example, you can share some inspiring insights with clients instead of pushing products to them. If you really want to make a significant change, I would suggest writing down the ideas that come into your mind while doing these exercises.
Requirement #2: Emotions Instead of Information
You might wonder, what’s the problem with information? Isn’t it a good practice to explain everything to your user? From a marketing perspective, it is. In the previous age, people read the description of products in magazines to find out how it could help them. Basically, advertising was about simple information about products. Even today, you can see a lot of attempts to promote products just by informing customers about product features.
Unfortunately, that approach does not work well for digital products. Today, we have too much information around us and too many competitive solutions. Thankfully, only 20% of our brains think rationally. We perceive and act through emotions and instincts – so-called “subconsciousness.” This protects us from information overload.
If you open a website in search of a solution, would you read a paragraph about the company? Or would you form a first impression and quickly scan the page in seconds? Let’s take a look at how this works in practice. Imagine you want to take out a mortgage and choose to look at the bank’s website. You look around, and there’s lots of information, some parts even duplicating themselves. It provides information, but does it create a connection for you?
Users forget information but remember experiences —and experiences are created from emotions. This means that information should be integrated into a context of usage. It should become an organic part of the user experience. To achieve this, we must focus on emotions our product delivers, using intuitive information architecture and a delightful design to manage it. Explore your users to connect with them emotionally.
Do not make your user read. Show them the right path using visual accents with simple and clear tags. Landing pages of fintech services create this vital connection by delivering a clear message of who they are and why we should trust them. They usually use emotionally engaging visuals to show that they offer something revolutionary. They want to create the emotional connection through simple messaging and a clear interface.
Of course, there are “smart” marketing guys who misuse the principles of Experience Mindset in a malicious manner. They manipulate with human irrationality and emotions just to increase sales. And here it’s very important to understand the difference. In the Marketing Mindset emotions are used to trick people. By contrast, in the Experience Mindset emotions are the language to communicate with the customer, understand his needs and expectations, in order to deliver the best possible experience.
How can you implement this in your practice? Ask yourself, where would you place your institution’s business approach, culture and goals on this scale? What is the main drive of your activity – to inform or to create an emotional connection?
Once again, “information” is about providing some facts about your product or service, like the do-it-yourself approach. If a potential user really needs your solution, then they will search for it as long as it’s needed by carefully reading all the information on your website. “1” on the scale is about a company that absolutely has no idea how the user feels and does not let them get too close.
“Emotions” means to focus on the feeling that our product or service creates. Such a company is interested in understanding its users well, their thoughts, emotions and behaviors. Why do they need your product, how will they use it and how can you better help them? What could be a pleasant experience in our case? “10” on a scale could be given to a company that tries to perceive the world through its customer eyes and creates a close connection through its service. Apple is a good example of such approach.
If you wish to improve your result and get closer to a “10,” you could simplify your website by reducing some content, making the design more emotional, or establishing a closer connection by asking your customers for feedback. Maybe you already have other great ideas of adding emotions to your financial product? Write them down!