December 10, 2015 | Ken Hans
My 5 Key Takeaways from the Digital Marketing for Financial Services Summit 2015
1. Personalized marketing increases customer engagement, conversion and spend.
Andrew Artemenko, Sr. Director of Neustar, had data backing up the fact that when digital marketing ads are personalized to an individual it makes a big difference. Businesses can achieve 5-8x the ROI on marketing spend when the ad is personalized. It was also stated that personalized digital ads provide a sales lift of 10%+ vs. non-personalized equivalents. Thus the data makes the case: when people receive a relevant offer specific to their needs, they have a higher propensity to buy it and pay a premium for it. This makes sense when tying it back to our everyday lives. Who prefers to watch their favorite show on DVR playback vs. watching it live? Why? When we watch it on playback, we can skip the commercials. Why do we want to do that? Because they are (most of the time) not relevant to me, and feel like both an annoyance and a waste of my time. However if the ads were specific to me, it would be a different situation.
Question for FIs to consider: Given how much information you already have on your existing customer, how and where can your FI improve at personalizing the offers you put in front of your customers to increase conversion rates and customer spend?
2. Today’s digital customer is connected to the internet and accessible all day long.
Clara Shih, CEO and Founder of Hearsay Social, had some compelling stats regarding the largest societal demographic, Millennials. Currently, 87% of Millennials in the U.S. always have their smartphones on them, with social being their top internet activity (now surpassing email).The average American spends 6 hours per day on social, mobile and digital-related activity. Taking this into consideration, along with the data point that most adult Americans now own on average three mobile internet connected devices, it is clear that today’s customer effectively ‘lives’ in the digital and social media realm all day. And they are continuously connected and accessible wherever they are (work, home, vacation, dinner, etc.) via a mobile device.
Question for FIs to consider: How in-tune is your FI in both listening to what’s relevant to your customers in today’s digital and social media realms? Are you staying relevant by targeting your marketing activity into these digital and social media channels? Your customer is accessible for most of the day – how much ‘air time’ are you getting with them?
3. Today’s digital customer expects a tailored experience on whatever digital device he or she chooses to interact with you.
As Mike Linton, CMO from Farmers Insurance, pointed out that a portion of customers in the market today only have a mobile phone. His organization recognizes the value and priority of tailoring the digital marketing experience to the form factor. Dan Marks, CMO of Hancock and Whitney Banks, also referenced a statistic that 51% of email is read on a mobile device, meaning that even email marketing messages must be smartly optimized to handle the form factor (i.e., phone, browser, tablet) from which they are viewed by the consumer. Customers today simply expect that the ‘desktop’ or ‘full browser’ digital experience should be decidedly different than a mobile or tablet digital experience. The expectation from consumers is that “industry” should have figured this out by now, and if they haven’t, they may lose customers.
Question for FIs to consider: How optimized is your FI’s marketing, sales, and service digital channel experience for your customers? Is your capability in this area a competitive differentiator to a digitally-savvy consumer, or a cause for concern?
4. Just because you’re an established FI doesn’t mean your old ways of doing business are ‘safe.’
Enter Eastman Kodak. One hundred years ago, they educated and inspired the world on the value and benefits of personal and family photography. They rose to become the leading photography company in the world, and inspired the ‘Kodak moment,’ which became synonymous with taking a picture and special memory. Fast forward 100 years and this photography industry titan went into Chapter 11 while struggling to maintain income, cash flow and market viability. So what happened? Did the photography industry die? No. In fact personal photography in society today is at an all-time high. Rather, along Eastman Kodak’s journey all this company eventually saw their product is as ‘film,’ and they lost their way. They used to own the photography space but became irrelevant as digital technology changed the photography industry, and they didn’t adapt.
Question for FIs to consider: How well has your FI adapted your traditional, wet-signature, paper-based, ‘come into the branch’ processes to conform to the digital age?
5. Today’s consumers would rather do business with you digitally.
Having your FI found via internet search is critical in today’s world. Jaime Punishill, VP Digital Marketing & Channel Mgmt at TIAA-CREF, indicated every TIAA-CREF web page is now built with Search Engine Optimization (SEO) in the front of the conversation. The scales have also tipped where there is more internet traffic on mobile vs. browsers. 70% of Facebook’s engagement comes through a mobile device. Capital One indicated that 50% of their credit card applications come through mobile. Consumers would rather ‘talk to you’ via either a mobile device or a browser vs. human interaction. Citibank indicated that 70% of people in US would prefer to do digital account opening vs. having to come to a branch, and 81% of people would not switch banks if their primary bank closed its local branch. The sea of expectations continue to rise and today’s digitally-savvy consumers expect and demand that more of their financial services needs can be met via the digital channel.
Question for FIs to consider: Is it ‘digitally easy’ to do business with your FI, or is it digitally frustrating? If it is digitally frustrating, what are you doing to close the gap?