Online video is coming into its own, no longer being just an add-on component to institution’s web site. Partially due to the explosive growth of tablets, web videos have evolved beyond being used just for education or brand building to become a viable direct marketing messaging and selling tool, deserving of dedicated resources.
Online Content Booming
According to the 2014 U.S. Online Video Rankings from comScore, 183.8 million U.S. Internet users watched almost 48.7 billion online content videos in January of 2014, with video ads totally 26.9 billion. In fact, video ads reached 52.6 percent of the total U.S. population an average of 165 times during the month.
More and more sophisticated viewers don’t want to watch a repurposed 30-second TV spot on their computer, tablet or phone. They want online content that is personalized, compelling and interactive. “People are sitting viewing content online wanting to push a button — give them a reason to push a button,” said Jay Miletsky, CEO of online video network MyPod Studios in an interview with CMO.com. If done right, online video can be both a strong branding opportunity and an effective engagement tool.
A survey by Digitas found that 51 percent of online video viewers in the sought after 18 to 44 year old demographic would look up a new brand or product they saw on an online video, and 58 percent of 18 to 34 year olds who follow brands on social media would watch a video that a brand posted online. In addition, the Q4 2013 Global Video Index conducted by video analytics provider Ooyala, found the following astonishing facts:
- Mobile and tablet video share grew 43% in Q4 2013 alone.
- Mobile and tablet video minutes have grown an astonishing 719% in just the last 2 years.
Personalized Content Drives Engagement
At a time when video content viewership is rapidly increasing, the State of Online Video Report, published by SundaySky, found that personalization fosters significantly higher levels of viewer engagement. Specifically, short-form videos designed for communication to a mass audience (one-to-many product videos) are viewed with a 50 percent completion rate, while viewers will spend 2.5X more time watching a slightly longer video if the content is personally relevant to them.
The impact of videos has already been seen with email marketing, where it can increase the likelihood of having the email opened. While typical email opening rates can range from 11-22%, the addition of video can improve open rates to as high as 30%. According to SundaySky, open rates can increase to 40-60% if the content is personally relevant. Furthermore, the click-to-play rate for personalized video ranges from 80-99% according to the study. Additional KPIs of personalized videos include:
- 4-8% increase in products per customer
- 5-10% increase in revenue per customer
- 20% reduction in churn rate
- 30-50% lift in value-added service cross-sell rate
- 5-20% increase in offer take rate
- 80-94% positive experience rating
- 5-10% lift in Net Promoter Score (NPS)
These results have not gone unnoticed. Forrester Research indicated in late 2012 that personalized videos are an important emerging technology that can combine big data and digital video content for deeper levels of customer engagement. Early adopters of personalized video include cable operators and telecommunications providers who are using this technology to deliver personalized video billings.
Humana also announced in late 2012 that they would be using personalized videos similar the example below to deliver a customized explanation of benefits to customers.
According to Kelly Ford, vice president of marketing for SundaySky, there are also a handful of ‘first mover’ financial institutions that are building personalized video solutions for their customers. “Several top U.S. banks, particularly in the credit card and lending businesses, are developing ways to increase engagement and educate customers using personalized videos,” states Ford. “We expect many of these applications to go public in the next few months.”
How Does Personalized Video Work?
Today, more than 80 percent of online video ads are simply repurposed television campaigns that are either available on demand or included within other forms of communication (email, jump pages, etc.). Going forward, however, it is possible to economically leverage behavioral, transactional and relationship insights to ‘build’ 1:1 video experiences that are personalized, real-time, measurable and optimized through ongoing analytics.
By addressing the viewer by name, using ‘just-in-time’ contextual and behavioral insight, an engagement communication, cross-sell message or important retention offer can be delivered to a desktop or mobile device even reflecting the device and time of day the message is consumed.
As shown in the videos above, in the case of SundaySky, personalized and non-personalized data are integrated and served to a video template system called Videolets™. These Videolets leverage the data, logic, creative, channel and analytics to optimize the delivery of the message to the customer.
Individual scenes and personalization assets are selected for each customer in real time and these are populated along with any animation, custom voiceovers and interactive call to action overlays. This process allows for customization on the personal level that is scalable to the millions.
The resulting videos are also responsive to various delivery methods including websites, email, social networks, mobile devices and even SMS to take advantage of customer or institution preferences. And since the video is created at the moment the viewer clicks ‘play’, it ensures that the viewer is receiving the most recent and relevant information pertaining to their own relationship with the institution. The platform even gathers and analyzes viewer behavior in real time allowing for immediate analytics and performance optimization.
Financial Institution Customer Lifecycle Applications
At a time when the traditional economics of banking have been forever altered, it is important for financial institutions to embrace the ‘New Normal’ and look for opportunities that will leverage data and digital technology to improve results at every stage of the customer lifecycle. This will require new ways to engage with customers who are being encouraged to use online and mobile tools as opposed to visiting branches.
Personalized online video provides a solution that can boost online search engine results, increase engagement, improve cross-selling and reduce churn thereby improving customer base growth, share of wallet and revenues. While the technology is still in its infancy, the potential should be evaluated along with other digital marketing strategies.
New Customer Acquisition
For financial institutions that are already leveraging Search Engine Optimization (SEO) strategies for generating prospect inquiries and new customers, video is the fastest growing format. This is because Google favors pages and sites that include videos. In a recent report, Forrester found that video results on Google have a 50X better chance of appearing first on results lists compared to text-based sites.
However, simply adding videos to a website or email is only the first step. Google and YouTube are always changing their search algorithms for video (and everything else), seeking the best way to present information that searchers find relevent. In October 2012, YouTube announced that they would rank videos based on ‘watch time,’ giving prominence to videos that are watched for a longer stretch of time than just a few seconds.
As Google, YouTube and others continue to tinker with their search algorithms, it will be important to continually test your marketing efforts to ensure your placement is where you want it to be as changes happen.
It was also found that click through rates were significantly higher for video links than for text links. One reason was because a video thumbnail appears in the search results, providing greater real estate as well as attracting eyes to the results. Bottom line, including video helps brands to get found online. Digital video technology allows for extensive customization of the video based on product search criteria, including features and benefits.
Banks and credit unions can no longer afford to have website visitors or online shoppers abandon their search or account opening process without converting the visit to a sale. With more than 95% of website visitors and 50% of prospects who begin an online account opening not resulting in new business, reconnecting and reengaging with these site abandoners is a very worthwhile investment. According to eMarketer, retargeting can increase website visits by 726 percent, with retargeted consumers being 70 percent more likely to complete a sale than other visitors.
Videos personalized based on the shoppers initial search and behavior while on the bank’s website takes retargeting a step beyond simply sending a broad product message. Since the retargeting efforts are personally relevant to the prospect’s search, there is an improvement in site visits (up to 20% more), conversion (up to 10% more) and spend levels (up to 30% more).
New Customer Onboarding
No matter what product or service a customer buys from your institution, the likelihood of the customer actively using the product and making your product their primary relationship is determined in the first 90-120 days of the relationship. As referenced many times within Retail Banking Strategies, as much as 40% of the new accounts opened can be lost in the first year, with many of the relationships established being inactive and unprofitable.
While there are still many banks that are not doing the ‘basics’ of onboarding a new customer such as sending a ‘thank you’ email or direct mail letter that discusses how to use the new service and expand their relationship with the bank, a personalized video would be an excellent way to educate the customer about their specific account. This custom video could outline additional elements of the relationship they may be receiving (cards, PIN numbers, checks, etc.), explain how online banking, mobile banking and bill pay work, provide pertinent contact information and give insight into how to maximize the value of the relationship.
An example of the way this could be done is provided below. As can be seen, the ability to customize both the audio and video content is extensive, allowing for an unexpected and pleasant new customer ‘first touch.’
Some financial organizations are even pursuing using personalized videos to deliver statements as shown in the example below. Again, the level of real time personalization is possible by connecting customer behavioral and transactional insights with digital video content.
Read More: Banks Need to Reassess Cross-Selling Efforts
For decades, cross-selling has been the focal point of a great deal of employee training and marketing investment. With the banking standard of excellence usually considered to be Wells Fargo, with a cross-sell rate of 5.9 products, and with an average household having roughly 16 financial relationships, the objective of every financial institution is to have the greatest ‘share of wallet’ possible.
While many organizations already have lifestage and event triggers and programmed cross-sell initiatives built into their marketing communication strategies, the ability to leverage highly personalized videos to support current direct mail, email and online communication can only improve results. With the majority of the foundation already set through the development of targeting models, the ability to engage customers in a contextualized manner is a logical next step.
As the industry saying goes, “It costs 5 times more to acquire a new customer than to retain a current customer.” Unfortunately, we sometimes forget those households that provide the highest value until they have either indicated a problem or have already left the bank. As a result, many financial institutions have built rewards and even recapture programs to reduce churn and extend customer lifetime value.
Different forms of loyalty programs include points-based programs as well as merchant-funded rewards. While both usually include the offering of merchandise or discounts, the value of these programs is based on the redemption rate as opposed to the earning rate of rewards. Until the reward is redeemed, the value to the customer is minimal.
Engaging customer in a contextualized manner allows a bank to both show that they understand who the customer is (based on their profile with the bank) as well as what the customer’s interests may be (based on purchases). The result is a loyalty communication process that integrates the value of their reward available with an offer based on the customer persona.
As can be seen, the potential use of personalized videos is limited only by a marketer’s imagination. While the majority of development in the financial services industry at this time is around onboarding, video statements as well as share of wallet build and retention, there are even some institutions looking into the possibility of using this technology for dispute reviews and dispute status updates.
“There is really no limit to the possibilities of personal videos to support engagement along the entire customer lifecycle, especially with industries like banking where the nurturing of a relationship is ongoing”, states SundaySky’s Kelly Ford. “The ability to have video engagement on Day 1, Day 7, Day 60 and thereafter that is entirely different, leveraging the latest insight into the customer’s behavior, relationship growth and preferred channel of receiving the message is exciting.”
Not surprisingly, the primary challenge for most financial institutions around evaluating and potentially implementing this or any digital marketing solution is centered on prioritization of initiatives. With so many pressures on most bank marketing departments, finding time to pursue a new technology or innovative process is difficult.
While compliance, privacy and security are always concerns for financial organizations, since the videos are encrypted, do not include account numbers and are served in real time, many of these challenges have been addressed.
When SundaySky was asked about primary competition to their service, Kelly Ford said, “At this time, for most financial organizations we have talked to, the alternative to personalized videos is ‘do nothing’, which is because of competing priorities”.
Given the need for revenues and importance of aggressively attracting and retaining customers, it is likely that ‘do nothing’ will not be an alternative for long.