4 Ways Retail Banks & Lenders Can Emerge Victorious in the Amazon, Uber, Netflix Era

Customer expectations are changing faster than ever in the era of Uber, Amazon and Netflix. These disruptors continually raise the bar by relentlessly simplifying and personalizing customer experiences. People now expect these experiences with all companies they use, and they can easily shop around at any point in any transaction to find a provider who meets their expectations.

No banker or mortgage lender is immune. As many as 5.6 million Americans plan to switch banks this year – a significant jump from years past – in search of better, faster service. Lenders are now competing with digital startups that didn’t exist a decade ago. And 54 percent of customers have stopped doing business with a company because of bad customer experience.

That’s the bad news for banks and mortgage lenders looking to grow revenue: New customers are five times more expensive than repeat customers.

The good news is that you can keep up with customer expectations. And doing so yields massive returns: Boosting customer retention by just five percent can increase profits by up to 95 percent – and that’s not including new customers your top-notch experience will help you win.

Here are four strategies to stay ahead of expectations and win customers for life in this real-time, mobile-first era.

Tip 1: Close The Advice-vs.-Transaction Gap

Seventy-eight percent of customers want advice from their banks and mortgage lenders, but only about 28 percent actually get that advice. That’s a major opportunity to differentiate yourself.

Forty-one percent of people want quick tips to help improve their financial situation, 33 percent want advice to help keep track of spending and household budgets, and 29 percent want advice for saving for a large purchase.

Instead of simply asking questions to drive toward a single transaction, make sure your sales teams truly understand and listen to customers’ needs. That practice not only leads to better service and smarter advice, it can also lead to more transactions.

Tip 2: Master Hyper-Relevance

Accenture calls the practice of delivering the right message to the right person at the right time “hyper-relevance.” Mastering hyper-relevance means automating useful connections with your customers and prospects, which takes the heavy lifting out of building real trust over time.

As for blending timeliness and relevance, consider this opportunity: Despite 78 percent of customers wanting financial advice from banks and lenders (as noted above), only 29 percent of customers can recall recently receiving any type of financial advice.

Also, 58 percent of those who received face-to-face advice feel it completely met their needs, which isn’t bad, but that number drops to 45 percent for people who got advice from a website or app, and to 33 percent for people who got advice via email.

Retail bankers and lenders are strong face to face, so if they keep getting better at translating this high-touch experience to websites, email and other digital channels, it becomes very hard for online-only competitors to match.

Tip 3: Understand Customer Expectations For Local AND Digital

This means bankers and lenders must master both digital tools and human engagement.

Fannie Mae data shows that while 72 percent of people want a digital loan application process, 65 percent want a human to explain loan terms and options.

Again, retail lenders and bankers are leaders in serving the 65 percent who want human help, so now is the time to focus on how that advice can be more easily and clearly deployed via digital means.

Today’s customers expect way more than drip email campaigns for birthdays and life events. Next up is using digital tools to help you stay in front of customers with advice specific to their profile at the precise times they need the advice and / or would be most receptive to it.

Tip 4: Get Alignment at the Executive Level

For all of the above efforts to work, your organization must have an executive team who gets that serving customers with hyper-personalization and immediate advice across digital and local channels isn’t just a tech wish list. It’s an absolute (and ever-increasing) customer expectation. And if customers don’t get it from your org, they will seek it out elsewhere.

According to Google, in the past two years, searches for “best [provider]” have increased 80 percent and searches for “[provider] near me now” have increased 150 percent.

Customers will remain loyal if you can meet their real-time expectations, but if you don’t, they can find other options faster than ever.  

Great leaders and companies who understand this new reality can break down silos between sales and marketing (in data, strategy and elsewhere). Without integration of the sales and marketing teams, it’s almost impossible to create a highly personalized, highly relevant customer experience at scale.

Even with executive alignment, banks and lenders must keep all priorities focused on easy data capture for salespeople, data sharing among teams and technology that takes you beyond simple drip emails and social posts.

Personalized Data Yields Personalized Advice

The reason most of us love Uber, Amazon and Netflix is because they leverage the data they have from past engagements to serve us better every time we engage. The banking and lending industry is on the cusp of learning how to do this just as effectively. As long as we remain focused on customers’ expectations for this type of engagement, we will usher in a new era of personalized finance.