Understanding The Financial Consumer Purchase Journey

The consumer buying process for offerings from banks and credit unions is changing dramatically, with an increasing array of online and off-line options for researching and buying new products and services, using multiple devices, 24/7. Campaign marketing days are coming to an end, opening the door for highly targeted and personalized cross-channel communication being delivered seamlessly at multiple stages of the consumer purchase journey ... in close to real-time.

This new age marketing integrates the consumer experience across both physical and virtual environments, leveraging the ubiquity of big data, the Internet of Things, and advances in web coding and design.  According to a research article from McKinsey entitled, ‘Digitizing The Consumer Decision Journey,’ digital channels are at the center of this transformation. “Under this scenario, digital channels no longer just represent ‘a cheaper way’ to interact with customers; they are critical for executing promotions, stimulating sales, and increasing market share.”

“Digital channels no longer just represent ‘a cheaper way’ to interact with customers; they are critical for executing promotions, stimulating sales, and increasing market share.”
— McKinsey

The challenge for financial marketers, product managers and segment owners is that the tools, devices and channel options are changing faster than companies can react. According to McKinsey, consumers will soon be able to search for products by image, voice, and gesture; automatically participate in others’ transactions; and find new opportunities via devices that augment their reality (such as current ATM and branch finders, new home finders, smart watches and Google Glass).

It is no longer adequate to wait until the customer or member walks into your branch or decides to purchase a new product online or via a smartphone. Instead, banks and credit unions must engage customers at every stage of their purchase journey – not just because of the immediate opportunities to convert interest to sales but because two-thirds of the decisions customers make are informed by the quality of their experiences all along their journey, according to McKinsey.

To leverage the vast amount of insight available and enable the multichannel marketing initiatives required, McKinsey recommends that firms focus on capabilities in three key areas:

  • Discovery. Banks and credit unions must apply advanced analytics to the large amount of structured and unstructured data at their disposal to gain a 360-degree view of their customers and members. Strategies should be based on an analysis of consumers’ current relationship, recent behaviors and past experiences with the company, as well as any signals embedded in consumers’ mobile or social media data.
  • Design. With the consumer bombarded by messages at all times across a variety of channels and devices, financial firms need to craft a compelling consumer experience in which all interactions are customized and personalized to a consumer’s stage in his or her purchase journey.
  • Deliver. Campaign marketing is dead. No longer can financial marketers rely on limited duration programs that hope to hit the prospect or customer/member at the right time. Instead, banks and credit unions need to engage with consumers in exactly the right way, using the right channel and offer at several contact points along the journey. This requires the collaboration of data scientists, analytics, marketing, and designers that are committed to iterative testing, learning, and scaling – at an almost dizzying pace.

The New Contextual Purchase Journey

In the new era of marketing, financial institutions will embed themselves within the consumer’s daily life, making engagement with financial services seamless. Imagine a couple who are ready to purchase a new vehicle to accommodate a growing family. As with most shoppers in today’s digital world, the couple starts their buying process online, at their computer, on their tablet or maybe on their smartphone.

They search styles of vehicles, brands and maybe even colors, trying to narrow their choices down in an educated way. Before they ever walk into a car showroom, they will be armed with consumer reviews, a rough cost of the vehicle, and will be ‘in control’ of the buying process.

While they are searching the web, they are not doing so alone. Car manufacturers, dealers and even their financial institution are tracking their ‘digital footsteps’ and are ready to use digital retargeting to place appropriate advertisements surrounding future searches or even reach out to the consumer overtly with offers on vehicles the couple may have been interested in.

“The challenge is to seamlessly engage across the entire customer journey, making every touchpoint a unique brand experience regardless of the physical or virtual channel used.”

Assuming an optimized cross-channel experience, the couple visits some of the dealers closest to their house to see the vehicles they are interested in personally. Before they even get to the front door of the dealership, however, they receive a message on their smartphones referencing where on the lot the vehicles they had earlier searched for are located … maybe even in the color they showed a preference to. This is accomplished with either low frequency bluetooth transmitters at the dealer or with the GPS system in the couple’s phone.

As they approach the lot, their financial institution also lets them know they are pre-approved for a new vehicle up to a specified amount based on the insight that they already have on the couple. A special price may be offered based on a relationship pre-established between the dealer and the bank or credit union.

When they find the vehicle they are interested in, the couple simply scans the barcode on the vehicle (or the VIN), and the bank processes their pre-approved loan within seconds. As soon as the couple determines what combination of terms they would prefer (all on the smartphone), the paperwork is completed before the dealer even has a chance to provide alternative financing option. All with a few taps of the finger.

This real-time engagement is not far on the horizon. In fact, virtually all of the steps described already exist in the marketplace today. The challenge is to seamlessly engage across the entire customer journey, making every touchpoint a unique brand experience regardless of the physical or virtual channel used.

Read More: A Comprehensive Guide to Retargeting for Banks and Credit Unions

Building the Data Capability

To assist the digital consumer along the purchase journey, most financial institutions need a much better 360-degree view of their customers and members. Internal silos and different legacy systems make it difficult to get a total view of the customer or member relationship, let alone a household relationship. Making matters worse, there are multitudes of gaps in the data, ranging from incomplete customer files (missing contact information, no purchase data, no CRM) to missing unstructured data such as social media, mobile, and behavior insight.

In addition to an incomplete customer view, the majority of organizations do not have a well structured attribution model. Antiquated “last-action attribution” analyses, which assess campaigns in isolation rather than in the context of the entire cross-channel consumer decision journey provides a jaded look at the consumer journey, usually giving a much higher weighting to in-person and physical channels than reality dictates. The inability to understand the digital consumer journey during the buying process can be costly as shown below.


McKinsey recommends organizations use a central data mart that combines all the contacts a customer has with a brand: basic consumer data plus information about transactions, browsing history, and service interactions. This collection effort requires input from people across multiple functions, but the payoff can be big. The goal is to identify, in real time, the basic “triggers” for what individual consumers need and value.

Organizations employing advanced analytics have seen significantly improved click-through rates and higher conversion rates (between three and ten times the average). Additionally, McKinsey analysis shows that using data to make better marketing decisions can increase marketing productivity by between 15 and 20 percent.

Creating The Experience

Bringing together online and offline communication channels is no easy task. Not only must institutions ensure that the messaging is consistent across channels, but the consumer purchase journey must be continuously monitored since each consumer takes their own individual path. This is where digital channel monitoring and communication becomes valuable.

According to McKinsey, one major bank unlocked more than $300 million in additional margins by making better use of digital channels. “The bank tapped into underutilized customer data and delivered targeted marketing messages at various points in the purchase-decision process. The bank used the data, plus various personalization and testing tools, to inform changes in marketing campaigns for certain product lines; every next step for every customer was progressively tailored to help the customer take the best action.”

This is the model introduced first by retailers such as Amazon, Best Buy and Apple, where the customer purchase journey is monitored and managed over time. Unfortunately for most financial institutions, this is the bar that has been set by the consumer for all purchase interactions.  This is our Holy Grail.

The key is to leverage significant amounts of structured and unstructured data to design custom experiences for each consumer during their purchase journey. Using test-and-learn methods, financial organizations can integrate product and service messages within the journey to assist in the buying process and simplify the path to purchase and delivery. Instead of ‘pushing’ messages at inappropriate times, contextual marketing provides the opportunity for sales messages to provide value to the consumer.

Delivering Growth Opportunities

According to the McKinsey research, too many marketing initiatives are overseen by conservative senior leaders, with teams launching campaigns that take too long to get off the ground and end up revealing few new insights. They recommend an agile, data-driven process that conduct a multitude of small-scale experiments with cloud or proxy website services to pilot new designs and prove the value for investment.

The most successful organizations will need to combine the functions of analytics and marketing allowing teams and individuals to iterate quickly – what is sometimes called “failing fast forward” in the world of high tech. Marketing is no longer about media purchases … it is about digital engagement in close to real-time. The goal is to bring value to the consumer while delivering bottom line results to the organization.

Banks and credit unions will need to hire people with different skills than prevail in marketing and even data departments today. The key is to harness as much data as is needed, conduct appropriate analysis on the data, and apply learnings in the marketplace as quickly as possible. As opposed to extensive data reports, the key to success will be quick applications of data in marketing initiatives across multiple channels during the consumer purchase journey.

Financial services organizations that ultimately succeed in omnichannel marketing and sales will resemble tech companies, online retailers and even publishers, according to McKinsey. “Each industry has shown an ability to effectively using big data and digital touchpoints to drive growth and reduce costs, while producing and managing a variety of content (catalogs, coupons, web pages, mobile apps, and user-generated content) in real time across multiple platforms to create breakthrough customer experiences,” says McKinsey.

For banks and credit unions to move to the next level of marketing, we need to improve the use of data to create customized and personalized communication, across multiple channels, reflecting each stage of the consumer purchase journey. We definitely need to increase the ‘speed of learning’ through faster iterations of processing and delivery of an optimal customer experience.

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