Beware: Customers May Cut Banks From The Digital Journey

Before the internet and smartphones, most consumers made purchases in a predictable, logical sequence that included product research, shopping, purchasing, engagement and maybe even increasing a relationship and making referrals. Today's digital consumer finds information and makes purchases across multiple channels on various devices. As a result, your organization may not even be part of the customer journey.

When was the last time you made a major financial decision? Have you purchased a house, a car, a new television or an expensive piece of technology? Have you decided to set aside more money for savings, take out a student loan or transfer a retirement plan or move an investment relationship?

Most of us have done one, or many, of these activities in the past 18-24 months. How did you decide what you were going to buy and who your financial partner was going to be for the transaction? I doubt if many of you started the way consumers used to begin the process – by visiting a branch and meeting with a banking or credit union officer. I am also relatively certain none of you visited multiple financial institutions and compared paper brochures on the product(s) considered.

Today’s sales funnel and customer journey is not only fragmented compared to the past, it is different for virtually every person. It is not defined by age, income, family structure or even previous relationships already in place. The choices consumers have are almost limitless, with each journey being defined by the consumer based on real-time interactions. Convenience is no longer defined by distance, but by ease of digital tools the consumer has access to at every step of the journey.

The Multichannel Consumer

Consumers are more fragmented across channels, devices and platforms than they’ve ever been before. From a retail perspective, sites like Pinterest now offer “Buyable Pins” that allow consumers to purchase without ever leaving the site. Instagram supports the shopping process through posts, and Facebook Messenger has added payments.

Retailers and some financial institutions provide consumers the ability to research, shop, purchase, finance and build a relationship, optimizing their experience on the most relevant channel(s) based on individual preferences. And, with instant access to a wealth of information at the touch of a button, consumers are considering a greater number of brands and products at the start of their journey than in the pre-digital era.

Consumers use up to 12 channels and devices when shopping for an item, according to McKinsey. This gives consumers far more opportunities to consider competitive products and financial solutions, with a greater number of specific touchpoints to become engaged at a time preferred by the consumer.

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Marketing Like It’s 1999

Most financial institutions build their product marketing strategy as if we were still in the 20th century. They hope that their overarching brand message and sporadic product marketing communication will be enough to encourage the consumer to “raise their hand” when they want service.

Unfortunately, the majority of the buying process happens before they even consider their possible financial partner. Google refers to this as the “Zero Moment of Truth,” or the timeframe in the buying process when the consumer researches a product prior to purchase.

Highly simplified, Google has found that the customer buying journey includes these steps:

  1. Shoppers discover new products and services through social media and display ads.
  2. They start with generic product, category, or local searches to compare options.
  3. When they’ve narrowed their list, they do brand-related searches, and seek reviews and referrals from friends.
  4. Consumers might even sign up for emails from the brand they’re evaluating to access discounts and promotions.
  5. Finally, the consumer may make their purchase through an ecommerce site, app or store.

Each step may occur on multiple devices, repeat at any time, and may take minutes or months.

The Power of Enhanced Data

While digital transformation has disrupted the traditional sales funnel, it also provides organizations the opportunity to gather unprecedented levels of insight during almost every step of the journey. In other words, more than ever, the consumer leaves a digital trail of how they are making their decision.

With enhanced digital tracking capabilities, we can see how consumers interact online, and what prompts their decisions. This provides financial institutions with a much deeper understanding of individual consumer buying behaviors and even emotions during the journey.

Armed with this insight, marketers have the opportunity to deliver a timely message to those researching a product or service, potentially partnering with future or current customer or members from research to consideration through the purchase and engagement steps. In addition, marketers can use retargeting campaigns on the consumer’s preferred social platform, prompting them to partner with your bank or credit union.

The key is to understand the buying process for the primary products you want to sell. Are you looking for more consumer loan customers/members or an expanded deposit portfolio? Are you hoping to increase the sales of investment services or to get a larger share of the mortgage loans in play?

Missed Opportunities: A Case Study of 22 Flubbed Chances

The 2019 Financial Marketing Trends Report — a 95-page report offered for free by Salesforce — indicates that one of the top three marketing priorities is the generation of new consumer loans. This has been a major priority for institutions of all sizes for the past seven years. Despite this desire for new consumer loans, most organizations miss thousands of opportunities daily to partner with consumers to improve their borrowing process.

I became aware of this missed opportunity during a recent car purchase. I don’t think my journey was significantly different than the majority of consumers, albeit my awareness of the dozens of signals that were missed by financial institutions was heightened due to my interest in digital disruption of financial services.

In a slightly abbreviated car purchase and financing journey, here were my steps and the opportunities for engagement with a financial institution that were missed.

Online Research. Similar to the vast majority of people in the market for an auto, I did a lot of research online before I ever visited a dealer. For me, I actually did almost identical research six years ago, three years ago and recently due to a car lease coming to an end. (Banks and credit unions can find auto shoppers in the same way that auto manufacturers do.)

Digital Shopping. To be fully prepared for the visit to a car dealer, 88% of consumers use the internet to shop for a car (83% use a desktop/laptop, 46% use a smartphone and 31% use a tablet). For me, I used four devices to check pricing, availability, location of dealers, etc. (As with the early research process, these visits are traceable and can provide invaluable insights into who is a “hot” lead for auto financing.)

Multichannel Engagement. According to research from Cox Automotive through IHS Automotive, 46% of consumers use multiple devices with 14% using only a mobile device. I used my desktop computer, travel computer, mobile device and my iPad. (I used more devices the closer I got to making my auto purchase decision. At every step of the way, I left a digital trail illustrating my behavior and stage of my journey.)

Vehicle Decision. While 30% of consumers know what vehicle they plan to purchase, 70% may have an idea, but change their mind once they are at a dealer or test drive the vehicle. For me, I had my mind made up six years ago and three years ago and ended up buying the same brand I already had at the last minute. This most recent time, I purchased the brand I had wanted for the past six years. (As consumers physically visit multiple dealers they leave a trail. Using geo-locational tools, banks and credit unions can engage a consumer at the most important possible time of decision and offer a pre-approved loan or lease option before the dealer provides alternatives.)

Financing. The vast majority of consumer do not pay cash for a vehicle. In my instance, I checked on loan and lease options at the dealer, considered transferring money from my equity line of credit, and visited digital sites that offered competitive car financing options. Because the car I wanted was not immediately available, I paid a deposit with a check made out to the dealer. (Because many people visit multiple dealer locations during their purchase process, most have multiple credit inquiries done. Even if only one credit inquiry is done, the purchase is not usually consummated immediately. This provides an opportunity to offer financing based on credit triggers.)

By understanding where consumers are in their digital shopping and research process, financial institutions can create timely strategies that would target them with the right messages, on the best channel, at the right time. In fact, knowing the top five digital activities most consumers perform during the shopping process will help shape your strategy (FYI – I did all of the activities listed below):

  • 71% research car pricing
  • 68% look at actual vehicles for sale online
  • 64% compare different models
  • 63% determine what their existing car is worth
  • 46% locate a dealer or get dealer information

In my personal case study, I counted 22 different points during my purchase process where a financial institution could have offered me a financing option that was competitive. Because a financial institution would already understand my intent as well as the channels I use frequently, the preemptive value they could provide would not only surprise me, but also delight me. And isn’t that what we all say we want to do for consumers?

Becoming Part of the Digital Customer Journey

The goal of leveraging multichannel, real-time marketing is now achievable for any size organization. This also underscores the need for customer journey analytics and a data-driven approach to marketing. According to Gartner, the steps to understanding the customer journey consist of gathering customer data, connecting customer data, analyzing data for insight, visualizing the journey and activating insight.

Successful customer journey analysis underscores the challenges of understanding identity matching, disparate data sets, the lack of dedicated tools and the difficulty choosing the right tools. We need to understand that the consumer is in control. Unlike the past, they are not following a linear purchase process. They are researching, conducting self-education, testing alternatives and making decisions on their own terms in their own time frames.

Because few consumers include you in their buying process proactively, it is more important than ever to find ways to engage throughout the entire process … even if it takes six years (like in my case).

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