Can a Personalized Customer Retention Technique Be Achieved in Real-Time?
There is an idea that customer retention is less costly than acquiring a new customer. At the same time, retaining the old customer requires a unique and innovative approach, otherwise known as the Disruptive Technology approach.
Various industry verticals and business organizations that plan strategies to gain real-time personalized customer retention primarily focus on customer relationship management. With technological innovation, CRM has also traveled to the next-generation phase with CRM Software. The advanced tool aims to increase customer acquisition with cost-effective tactics. It helps to target potential customers with customized offers, create loyalty programs, and personalize interactions.
The blog focuses in detail on attaining real-time personalized customer retention in the banking industry.
Customer Retention in Real-Time in Banking Sector
In the banking sector, customers demand superior customer experience than their yesteryears. They expect fast and uninterrupted banking service at the tip of their fingers. Next, more secured banking networks and easy access via cards, net banking, face detection, and fingerprint login systems, to name a few. Today's generation would prefer to avoid going to banks and writing a cheque but prefer UPI-based transactions or NEFT net banking facilities. Bringing up technology like Blockchain would be far too advanced right now, but that is what the next generation would expect from the banking industry.
What Are the Customers Looking For?
There was a time when the barter system was the means of exchange and transactions between users. As humans evolved, they brought in the concept of coins to trade in commodities and maintain records of wealth and transactions. Thereafter came the concept of currency exchange and banks to safely store the money.
Slowly with the introduction of computer systems which were compact and can be put on a desk, there was a rapid advancement in every sector to cash in the most benefits out of this new technology. The banking sector was also highly interested in adopting such new technology but also had their apprehensions.
But with time, there was a need and quantum jump of technology where technology consulting firms and other associated organizations came in to help the banks move into digitalization. It was not easy initially as many of the employees or even the top-level executives faced several challenges to adapt to this new age change.
UPI transactions are the new norm now, and internet banking is the most preferred way of transferring money to any account over going to the bank and filling up a form. Customers' expectations are increasing day by day.
But the main concern till today is the remote areas of the world where delivering a stable internet connection are a big challenge, on top of that a digital banking service is an uphill task.
The next generation would not settle for anything less than the current infrastructure but would demand more out of it. Their expectations have already increased exponentially, and only to put fuel in the fire, the Covid-19 situation has forced the use of the digital banking system all the more. In the coming decades, "Survival of the fittest" would apply to the banking sectors as well, where the best and efficient technology-driven banks would leap forward.
What Personalisation Is Not?
A unique customer experience like I have a savings account with an annual salary of X amount and age Y; based on these factors X and Y or other factors we can suggest a bike loan or a car loan. On the other hand, based on his/her bank balance of Z and age Y, we can suggest different investing schemes. It won't be right to suggest senior-citizen offers to a young customer or home loan to a senior citizen.
Now in the case of personalized banking, delivering the right individual experience through the right channel at the right time would be the mantra.
How Can Personalisation Drive Revenue Growth?
BCG estimates that for every $100 billion in assets that a bank has, it can achieve as much as $300 million in revenue growth by personalizing its customer interactions. Personalization would be the game-changer for banking sectors to stay atop in the next decades.
Successful banks try to imbibe more beneficial financial relationships by applying the following formula:
Frequency of interaction x the wow factor = trust
This wow-factor reflects the relationship and trust between the bank and the customer. This wow-factor can't be won by just providing good services. Loyalty plays a major role in building the brand, which will stay in the individual’s heart. Its brand value knows an entity or the persona it creates via multiple points of repetitive support of services, timely alert, customized personalization, etc.
Personalization Across Different Verticals
More than just providing customized solutions and some random technology solutions integrated with current existing banking services, there is a need to understand each customer's need, behavior, and nature of the activity.
A good solution would be to focus on the UI part of the solution, where customers would spend most of their time. It should be effortless to understand and simple to use. Yet, all the complex technologies and functionalities should be integrated into the backend. The UI should be well connected from start to finish line and be very fluid without lag or freezing up during use.
The content would be another aspect to focus on; thoughtful content is where the customers can co-relate. A well-designed content like a personalized email, whereas per the current market scenario like Covid-19 discounts on availing special health insurance or while a customer changes his organization and moves to a better organization with higher salary may be offered a home loan. Likewise, a businessman whose revenue is growing significantly can be offered better advice based on his needs for further future expansions.
All banks have the same product, but how it presents and how it nurtures play a vital role in making the customer stay back with the bank. A well-designed product portfolio would be the USP to new customers, but a well connected and concentrated portfolio would focus on the existing customer base. The same should be implemented in the app to convey the idea on the go. Rest needs to be improvised based on customer behavior and journey.
Contextual to This Situation (Retention)
A new approach is required to drive personalization and scale it up to the next level for a better prospect, engagement, and retention. To bring personalization upfront, we need a mixture of the latest technology and understanding customer behavior through its journey. The main center of focus should be the customer at all points in time.
However difficult it might sound to put it on the table, updating customer-centric objectives, creating customer incentives, retraining employees, hiring new talent, and building a new analytics and technology stack need to be implemented.
The core aspects of personalized banking can be summarized as follows:
- Customer DNA: A bank should have a single enterprise-wide view of each customer, which would define its nature of savings, expenditure, income, and other such features.
- A Personalized Curriculum: Customer offerings should be tailored to each customer based on their habits and behavior, not random generalized ones. And a proper well-documented strategy to incentivize it.
- An Analytics Engine and Recursive Learning: In the new age of AI, we can have machine learning techniques applied to the data gathered to provide the best-suited offers for every individual account holder. Also, future recommendations are one aspect of machine learning through which customers can have better value-added services.
Technology to Scaleup
Timely alerting your next loan repayment or predicting your savings based on current salary amount or the market depreciation value are great ways any customer can plan well in advance about their wealth and take necessary steps to fulfill it.
Investment in High Yield or Balanced Risk Markets has become more stable due to new machine learning algorithms, which would suggest when to buy or sell based on market fluctuations. On the other hand, cryptocurrency or blockchain would take banking technology to the next level by revolutionizing our transactions.
Let's discuss some of the aspects of customer experience in the banking industry. All banks provide essential banking services like savings, mobile banking, net banking, mobile alerts, etc. The difference between a private and public sector bank would be the customer experience, after-sale service, personalized recommendations are some of the key benefits.
Now the question arises why Bank A and not Bank B or changing from Bank B to C even after staying with Bank B for a couple of years. Although there is not a single answer to this question, we can still sum it up in short:
All our devices are now connected in real-time and getting sync to provide us with the latest contents. Be it mail-alerts or banking transactions where the money debited from one account is being credited to the respective account instantaneously. Hence, banks should focus on more real-time updates, making lives easier and better for customers.
Let's say we are going grocery shopping, so it should recommend which store's giving the best offers or like buying a new iPhone model and then should recommend me the best insurance based on paying capacity in real-time. Also, with Blockchain's help, real-time fraud can be stopped from happening by alerting whenever suspicious behavior is noticed or that the same nature of activity in the past has led to fraud.
Various devices like the smartwatch or the smart speaker would also get in sync with the banking system to provide us with more updates as or when required. But also to be noted are the key facts like too much of anything can ruin the overall experience that one has from a service.
Customer acquisition and retention have been a major challenge for business enterprises. Also, it becomes imperative to maintain a robust relationship with them. CRM Software is a potent tool that optimizes your relation through a central database and streamlines the communication. The system is stuffed with best-in-class features and added benefits. You can check out a wide range of top free and open source CRM Software such as SuiteCRM, HubSpot CRM, Agile CRM, Pipedrive, and more.