Banks Want More Wallet-Share? Stop Competing with Each Other.

In the late 1980s and early 1990s, the call center market was booming and it was truly the only way to give consumers access to service at their convenience while providing a vehicle for companies to up-sell and cross-sell products.  Before the Internet of things that was a very effective vehicle and to some degree, it still is.

Companies who were considered leaders in customer care were well known for setting the bar for customer experience pretty high.  I was in the telecom business back then and distinctly remember sitting in meetings discussing how to improve the customer experience. 

At the time MCI (now part of Verizon) did not compare itself to its rivals in terms of measuring customer satisfaction, expectations, and service experience. MCI compared itself to American Express who was the leader in customer service experience at the call center level. 

The focus was not so much on how can we provide a better service than AT&T, Sprint, or Verizon; rather the focus was on how do we extend the same experience customers are expecting because the bar has been set high by someone in another industry, and how do we set the bar higher?


Who’s Setting Up the Customer’s Expectations?

The Internet of things introduced a major disruption to customer-care by effectively turning every customer into an employee.  The service is always good, because I, as the employee and customer am the one who sets the bar. However, there are some clear customer experience leaders in the market.

Amazon.com is able to match product with interests better than most companies. When a consumer is shopping on the site, the expectation on the experience that consumer has with any other company is set rather high.

When I shop on Amazon.com my experience as a consumer is rather exceptional, they align what I need predictively and they get better and better at it each time. They follow through with fast shipping, easy returns, and give me access to customer reviews so I can make an informed decision.


Based, on my interactions with Amazon, The customer experience bar is set at a high standard for me. When I go into my bank my experience is totally different, they don’t know me well at all.

Strangely enough, they know more about me than anyone in the world.  They know who I do business with, they know where I travel, what I buy, what I earn, what I save, they know so much it’s scary – yet my experience at the touch point bluntly put… sucks ass!

The branch representative presents me products I don't care about, the ATM machine shows me videos I don’t care about, and when I go online it feels rather cold and very impersonal. The crazy part is that banks are spending billions of dollars per year wasting my time with these needless products.

When I want to expand my relationship with a bank the experience isn’t one that is a bolt on, rather I start all over again with little continuity from one product to the next. And worse, no one has a clear view of the entire scope of my relationship with the bank.

The bank’s products may share the same name, but I am doing business with 4-6 different companies in reality and they do a great job in making sure I experience that lack of connectivity with my experience.  

I go back on Amazon.com, and feel refreshed.  Why can’t I feel refreshed when I go into my bank?  Hello?  I need to buy stuff, you are my commerce partner, I pay you to help me do commerce, can you start treating me like a partner would?  Is that too much to ask?


Banks Need to Start Enabling Good Experiences

Let’s face it, why do I shop on Amazon.com?  They seem to know who I am, and what I value and I am in and out fast while getting the outcome I desire.  To me they don’t sell stuff, they enable an outcome I value.  I don’t think of Amazon as a seller, I think of them as my partner in enabling experiences I value.

Can I say the same about a bank today?  No.  I am either a risk to them, or a revenue opportunity. Today a bank isn’t my commerce partner finding ways to support my family’s future and me by aligning offers and products that are relevant to me.  The grade I would give a bank in terms of customer experience is an F.

Banking executives will often use the excuse that they are limited by regulation, which is just an excuse for not innovating around the customer.  Maybe if banks started to think of themselves as commerce partners and consumer advocates they would not need such stringent regulations. The regulations are to protect the consumer.

Let’s call it what it is today. It’s a contentious relationship.  I need them, they need me, but we are not friends looking out for each other.  That’s the sad truth. We would both be served best by changing that.


Big Data Micro-Contextual Segmentation Can Help

Today’s successful manager understands that quantitative methods can be powerful agents for solving the problems of human institutions, and in some cases human beings.

In capitalist economies such as that of the United States, Canada, and the Western European countries, managers of firms are continuously faced with numerous choices.

Managers of firms are assumed to have certain objectives, such as the maximization of profits of shareholder wealth, or the minimization of the cost of producing a given level of output.

Because managers and consumers are pursuing their own private interests and decisions are made in a decentralized manner, rather than by a central planner, a very important question concerning the coordination of economic activities arises.

This long debated problem has been solved today with the explosion of access to real time data that can be derived out of social media, and big-data. Yet there are a few ways to manage this further. One is microeconomics and social media sentiment which allows us to tie real time consumer opinion.

The other way to manage economics is macroeconomics. This approach is concerned with the issue of how the quantity and price of output of individual firms or industries is determined. In contrast, macroeconomics addresses the determination of the entire economy or aggregate output and price.

In the case of social media it only showcases the consumer's current state of being, but it does not help predict market conditions that will influence that consumer derived from micro or macro-economic concerns.

Big-data micro-contextual segmentation on the other hand, can triangulate all these moving pieces with the right analytics and decision algorithms which would solve the biggest question companies always face: What to sell now and tomorrow to maintain consistent growth, and profits. 

In the final analysis, only the customer can decide whether the company has created value and whether it will survive in the hypercompetitive global marketplace; more reason to tune into what consumers want and value. Listening to the consumer is not enough, tracking behaviors is not enough, enabling the consumer to have a voice is not enough, and enabling the consumer to be at the helm is not enough.  All the above working together in a customer engagement collaboration solution might just be the ticket.


Customer-Centric Relevancy is Key

Predictive modeling of trends among social groups to identify life values, and developing the business intelligence approach to integrating such data across all business functions is critical.  Banks will be able to properly develop, market, and retain relationships as a result of this marriage that’s missing today.  

Big-Data is nothing without new algorithms needed to match consumers to values. Forget psychographic, demographic, and life stage data - that's not enough.  Those models work in a verticalized market and were part of the industrial revolution assembly line methodology of marketing.  

What's needed today is to identify consumer values, as in what matters to that individual at the core of who they are contextually - only through social media, and big-data tied into a contextual segmentation engine can that be accomplished.

It’s clear there are too many moving pieces for all the decisions to sit with either the CIO, or the CMO. Both need to work together to properly leverage all the components that make up today, and tomorrow’s ever-unpredictable consumer. 

What will such data reveal once properly analyzed, synthesized, and put into semantic context?

1) How we track data must change. We are too verticalized to properly make sense of it.  

2) Education system was built on the assembly line concept, to support verticalization, and this will not serve the needs of the future brand – it’s too limiting.

3) Companies who are not engaging with consumers at all will cease to exit within 10 years, no matter how big they are today.

4) Branding, marketing, and consumer engagement will need to be realigned around values.


Start focusing on understanding consumer values. Yes values, as in understanding that a group of consumers may value connecting with other people, more than a group of consumers who values escaping from reality by being entertained.  A consumer who values connecting with others will want you to be able to provide him/her all that goes into that as in telecom, transportation, social networking, and events. 


These groups of consumers who value connecting with others is being served by multiple brands today, which use multiple strategies, which are all competing for a voice with them.  Banks who understand consumer values can align themselves as enablers, and commerce partners to help consumers achieve experiences they care about.


The future “value based” brands, will be able to understand, through micro-contextual segmentation how to properly align M&A activity, people training, R&D, sales and marketing strategies around the consumer. Banks who align supporting consumers as commerce partners will set the new bar for the customer experience.


In order to effectively accomplish this, the first and most important step will be a marriage between the CMO and CIO, and a closely sponsored relationship from the CEO. 

Secondly, goals will need to align around the consumer and provide values to the consumer not by vertical, but by segmentation around consumer context, specifically values based on data broken into a segmentation of one at the touch point when it matters most to know what to offer, for the right reasons.


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Tags: Data-Science, IT, Market-Research, Micro-Analytics, Micro-Segmentation, modeling, predictive


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