Brett King

Posts Tagged ‘marketing’

Your online marketing and website are broken

In Customer Experience, Internet Banking, Media, Offer Management, Social Networking, Strategy on November 9, 2011 at 12:42

There’s generally a very poor understanding of the dynamics of the role of the website in retail financial services interactions today. There is an acceptance that ‘some’ customers use the web, when deciding on a new financial services relationship, but not of the critical nature of the web in that choice. Let me explain how things are different from a behavioral perspective.

The inertia assumptions

Historically the majority of acquisition in the financial services space was either from brand marketing and/or campaign activity that drove a potential customer to purchase or apply for a Retail FS product/service.  There is an assumption that the web, social media, mobile and other e-channels support that goal as marketing channels where we can extend the brand and campaign paradigm. That is, we can broadcast more messages, perhaps with a tighter demographic or psychographic focus, to an audience that is more diverse in their message consumption.

The problem is that the Internet has been responsible for a significant process shift in buying behavior, namely that the dynamics of buyer response has significantly flattened. In the past marketing stimuli was used to create first awareness, then interest that led to the buyer mentally listing your ‘brand’ on a sort of short-list of providers, and then finally based on further marketing stimuli (promotion, pricing, location, features) the consumer engages with your brand for your product or service. This approach to marketing is all based on the premise that consumer behavior is latent or responds to a marketing message over a defined period of time.

Now with digital interactions being what they are, a consumer can go straight from research to purchase or need to application instantly. So the ‘stimuli’ works differently today, it needs to be a ‘live’ interaction strategy, not a message strategy that waits for a latent response. The loser in this context is the traditional marketing campaign mechanism, because a campaign is a latent stimuli tool, not an interaction tool.

The new engagement model

So in this new world, buying behavior is very different. Assume a customer needs a retail financial services product like a mortgage, a new bank account, a credit card or a personal loan – what does he or she do?

The overwhelming behavior today is to think about how they will apply for that product or service, with the least fuss. They will probably be largely ambivalent to their choice of financial services provider, in that, the fact that they have a bank account with you does not automatically mean they’ll come to you for another product necessarily. What the majority of customers will do is start by looking at their options – and for that they use Google (or perhaps YouTube) as their starting point.

This research phase is critical, because it is the empowerment of the customer. Them matching your product to their needs set. What’s critical in this stage is not the features of the product generally, but the utility of the product. Take a mortgage – how quickly can they buy their house, how much do they need to pay each month and how quickly will they own their  home? They don’t start by asking what are the early pay out fees, what’s the rate, and can they change their payment terms or habits midstream.

The concept that this research needs to happen at ‘your bank’ is a holdover from our traditional branch approach to FI product sales. In fact, we build our Internet banking sites just like a branch – assuming that you’ll come, ask some questions and then apply for a product. Most of the time, we won’t let you apply for a product seamlessly through our Internet branch, and we’re aiming to push you to a ‘real’ branch. This is inertia talking and it is counter-intuitive based on behavior today.

The easiest thing to do is simply shift me straight from research to a buying action once I have you online, but the more complex that is, the more chance that I’ll simply leave your Internet branch and go looking online for a faster path to the solution. What won’t happen is that I’ll suddenly be inspired to walk into your branch and start talking to a person after reading your website.

What the new web looks like

The new web we need to build right now is a set of tools to empower customers and help them complete the buying task they are looking for as seamlessly and as frictionlessly as possible. In that environment, the rolling promotions and offers we see dominating many retail FI websites today will be largely gone, relegated to simple landing pages connected to those dying campaigns.

The new website will be rich in imagery and process workflow for the engagement process, heavily personalized around what I already know about you, either through cookies, login or something like your facebook connected profile.

Additionally, the new website will be built from the ground up to be browser agnostic. It will work on a tablet, on a mobile phone, on a laptop with a whole range of resolutions and screen sizes – seamlessly. You won’t build buttons that require a mouse click, you can use your finger. You won’t populate with lots of text or links, when big images or stories will accomplish the same stimuli to an engagement.

Apple's website works as well on Tablet and Mobile, as it does online

Coming out of all of this will be a fundamental shift in marketing budgets and team structures. In just 3 years, 30% of your website visitors will be using a non-PC screen. Social media will represent 25% of your marketing budget driving brand advocacy and participation, and 50% will be on engagement and journeys, and the rest on a supporting framework of traditional media to build broader brand awareness.

Google Wallet is not about Payments

In Engagement Banking, Future of Banking, Media, Mobile Banking, Mobile Payments on June 6, 2011 at 02:27

Last week Google announced their long awaited NFC-trial for mobile payments. On the face of it, many perceive that Google’s play is an attempt to cannibalize the lucrative payments market, but if that was the case, why has Google not taken a share of interchange fees from Citi and Mastercard? In addition, Google is supplying contactless point-of-sale units to merchants participating in the upcoming NFC trial free of charge. Why on earth would they do that?

It doesn’t make sense

In early May the Smart Card Alliance conference held in Chicago, Wal-Mart’s Jamie Henry was asked directly about the retailers plan in respect to point-of-sale. His reply was telling:

“We’re interested in helping to migrate EMV to the U.S. market. We view it as a much more secure transaction, and we want to provide our customers with the most secure transactions in the market place,” Jamie Henry, director of payment services with Walmart treasury organizations (source: NFC News)

Henry has said that 100 percent of Wal-Mart’s terminals already support EMV cards. However, when asked recently at the Smart Card Alliance Annual Conference about the role of NFC or contactless technology in the greater POS environment in the US, Henry was reported as saying

“There’s no business case for NFC yet”

Many bankers take a similar stance in respect to mobile payments support for NFC phones, stating that until contactless point-of-sale terminals have broad enough distribution, customers won’t be able to make use of their NFC phones and thus the expense of rolling-out a trial and investing in the supporting technology would be premature.

So why would Google, who admittedly have some pretty smart people in their team, not only invest in an NFC-trial, but also give away NFC point-of-sale terminals free of charge to partner merchants?

Maybe it does make sense

The thing is, Google sees the big picture.

NFC is not about payments modality alone. It’s not simply the shift from chip and PIN or contactless plastic to contactless mobile payments. It’s about what the mobile phone can do as a payment device that a plastic card can’t – it can give you context.

For example. The number one enquiry to retail banking call centers today is still “What’s my account balance?” Combining that piece of information with a payment device gives you a very powerful context for your everyday personal financial management.

If you are focused on a savings goal, I can show you the potential negative effect of making a big ticket purchase.

If you are at a retailer about to use a competitor bank’s credit card, I can offer you a no-interest payment plan through my bank.

I can tell you if you purchase that big flat screen TV that you won’t be able to make your mortgage payment due in the next 3 days.

I can offer you a really great deal at a retail outlet that you just walked into or you are walking past.

Google Wallet is simply a platform for Payment-based marketing

Google has worked out that the context of payments is perhaps the biggest advertising market ever to emerge, far more impactful and lucrative than search-based advertising. This is about offering you compelling, relevant and timely messages that improves your service experience in-store. This is about positive behavior on the part of your service providers that produces extraordinary loyalty through relevancy and responding to your behavior in a way that benefits you day-to-day, not just when you go to the bank to ask for something.

The future won’t be written by banks and marketing organizations that are passive. It won’t be written by marketers who broadcast message after message hoping you remember a brand when you want to make a purchase.

The future will be written by organizations who know you so well that they anticipate your needs, make it very simple for you to capitalize on the relationship, that saves you money and respects your time and privacy. Trust can be earned back, but it is about me trusting you enough to receive your offers and you not burning that trust with irrelevant direct mail, newspaper ads and TV commercials.

The future is messages wrapped around the context of a payment, and Google wants to own that space. It doesn’t look as if there’s really anyone ready to challenge them on that front.

Whatever you think of Google Wallet, it’s clear they have probably the most compelling business case of all for pursuing NFC payments, and it has nothing to do with competing with banks, but everything about owning the customer.

I’ve got Facebook friends and Twitter followers – reward me!

In Groundswell, Media, Social Networking, Twitter on October 4, 2010 at 00:59

Ashton Kutcher was famous for being the first celebrity to exceed 1 million followers on Twitter (now 5.8m), the famous Zuck has over 850,000 friends on his Facebook fan page, but this is not your average social media profile. The profile of your average Facebook user shows typically some 130 friends (source:Facebook), and the average Twitter user has 126 followers. To exceed say 1,000 or 5,000 friends an individual normally has to have something special. It may be the fact that they were amongst the earliest adopters and have been active since day one, it may be that they are super-connected individuals in real-life, or it may be that they have a following due to some celebrity or claim to fame. The thing is, in marketing terms, friends and followers mean reach. So, is there a way to connect social media ‘credit’ in terms of following, and reward an individual for it?

Factor 1 – The Key Influencer or Connector

In viral marketing and in customer advocacy the best targets are those that will tell lots of people about how great your product or service is (of course, the converse is also true). The measure of how many people an advocate of your brand will talk to, parallels social networking in many ways. The LinkedIn social network, for example, often talks about the six (6) degrees of separation as a concept. This is the concept that every person on the planet is just 6 steps away, in relationship terms, from any other individual on the planet.

In Social Networks Key influencers have strong Reach (source: SocialMediaBlend.com)

Some people in this concept have a special power or capability, as Gladwell characterized in his book The Tipping Point, connectors have a unique reach across diverse populations. These connectors know lots of people and seem to have an extraordinary knack for making friends and acquaintances, and they have the ability to span many different worlds or are connected to many different types of people. Kevin Bacon, for example, is known as one of the most “connected” actors in Hollywood because he’s played roles in many different movies that span a variety of genres, working with other actors from multiple age groups and backgrounds. This means Kevin has unique reach to a diverse community.

In social media terms, the super-connected individual with lots of friends is the digital equivalent of Kevin Bacon or Gladwell’s “connector”. If we want lots of people to hear about how great our brand is, in social media we ideally want to target these key influencers and make them advocates in the hope that they will spread the word about us.

Factor 2 – Geo-location or trigger-based events

So when would a super-connected individual post about you on Facebook or tweet your brand via Twitter? Hopefully it’s when an exceptional customer event occurs, and not when they get some really bad service. However, today, we have the added possibility that one of these individuals might check-in at one of our locations, or might mention their brand new iPad, their flight on your airline, or a stay at your hotel.

Every time one of these super-connected individuals mentions our brand positively, in theory it has the ability to influence the group or individuals within the network. So an event might trigger a mention, but if it is a passive mention, it’s not necessarily going to influence my friends or followers to flock to your brand. What we need to work on is getting these connected individuals to sing our praises, or to refer our brand or product to their friends. It won’t be long before networking merges with customer analytics to enable marketers to target key influencers with viral messages that can flow out to their tribes or networks.

Factor 3 – The social reward program

These days most of us are involved in a bunch of reward or loyalty programs, whether they are airline based, frequency programs for shopping or retail, or a credit card usage program. These programs are essentially about customer retention, and providing a mechanism to recognize a loyal customer and reward them accordingly. To date, no one has really figured out how to integrate social media in loyalty or reward programs beyond integrating fan pages and twitter feeds into the loyalty program’s website, etc. It would be cool, however, if based on your following that a loyalty program could reward you accordingly. Here’s the concept…

We could give the connector tangible rewards for every positive mention at the time of check-in at one of our 4sq or Gowalla locations, here’s a few possible examples based on actual tweets:

Airline miles for positive check-ins/mentions

“Well, not complaining. Got an upgrade! Thank you #Qantas- I love you!”

Voucher for positive mention at a Starbuck’s location

“Pumpkin spice latte why are you so delicious? Love @starbucks Minneapolis, MN”

For a mention, the reward needs to be commensurate with the following. For example, the user above who checked in @Starbucks, why not give him an SMS-voucher based on his social ‘credit’. Something like this:

Friends or Followers Reward
1,000 Buy 1 get 1 free next visit
5,000 Free Grande Coffee next visit
25,000 Free Venti Coffee next visit
50,000+ Free coffee all week @Starbucks

In this way you reward advocates with the largest following so that their role as key influencers or connectors can be leveraged effectively.

Step 4 – Reward the Tribe

Using the example above, let’s say you create an offer not only for the key influencer but for his/her tribe also. The connector could receive loyalty reward bonus points for every follower that responds positively to an offer through Facebook or Twitter.

The objective is to get a key influencer or connector to advocate our brand, but in a way that benefits him, and if possible, his followers. So the first objective beyond advocacy is to create an offer that can be directed at his ‘tribe’ that gives that collective some benefit. Say a viral offer involving discounts or coupons to the tribe. If you are a bank, for example, a free $50 pre-paid debit card for successful member-get-member efforts for a new personal loan, credit card or account opening might work.

Build advocacy programs that recognize key influencers, their reach or social ‘credit’ and the value of their tribe as a whole. Reward the connector first and foremost, but think about viral offers to the tribe that feed off positive advocacy.

This is the loyalty program of the future.

Consumers shun bank marketing in preference for online research

In Customer Experience, Media, Retail Banking on September 13, 2010 at 10:14

At their annual ThinkBanking event last Thursday (Sept 9th) in Sydney, the Google Financial Services Team released their latest behavioral research supported by Global Reviews’ Customer Experience Benchmarking. The results are a shock to those expecting traditional marketing methods to strongly influence customer behavior in respect to product selection in the financial services space. Barney Pierce, the Head of Industry – Finance for Google in Australia articulated that the research “shows a fundamental shift toward the online channel dominating research for financial products and services. A large part of which is search related activity.”

Greg Muller and his team at Global Reviews who assisted with collecting the research explained that the research was conducted across Australia with a sample size of over 900 people from all walks of life – it was directed at all users of financial services products. In the research customers were simply asked to find ether a deposit product, a credit card, or a mortgage and report back on the process they used to find and select a product.

88% of customers research online

Staggeringly when it comes to financial products, 88% of customers today start their journey online. For deposits and credit cards, 78% of time spent researching options overall is done in the digital space for an average of 3 hours and 20 minutes. (that’s up from 58% in 2008) For mortgages and home loans, 62% of their overall research is done online spending upwards of 11 hours and 25 minutes before settling on a product. 77% of those surveyed said that they didn’t know about the product they finally chose before when they started the task.

The data shows a significant shift in behaviour when it comes to the selection process. Traditional marketing theory suggests that brand marketing and campaign marketing are strong influencers of behaviour when customers are selecting products, but this most recent data flies in the face of accepted theory. 51% of customers had a preferred brand when they started, but of those that used search to attack the task, 58% didn’t search for their preferred brand. Of those that started with a preferred brand 1/3rd (31%) ended up selecting a different brand.

What about the branch?

So what about the role of branch, call centre and other channels in the actual application process? 68% of those surveyed prefer to apply online, compared with just 29% who prefer the branch experience. However, 89% of people said they are open to applying online in the future if bank’s and FI’s get their approval processes up to scratch.

The research shows that for poor usability was the primary reason that customers would abandon a website and pick a competitors brand online. The highest % of customers who stay with online throughout are the $100k+ p.a income bracket, in fact, 82% of High Income customers total research is done online today and 74% of these indicate they would prefer to apply online for deposits & credit cards.

Google Finance research shows a big shift to online for finance products

Conclusions

The data indicates the following shift has taken place in the last couple of years:

  1. Consumer behavior has radically shifted in respect to financial products with brand and search being the top 2 mechanisms for product selection/choice these days,
  2. Financial Institutions need to invest big time in Search Engine Optimization, Search Engine Marketing, Social Media Support, and
  3. Financial Institutions need to streamline and produce highly usable web experiences so they don’t lose customers looking for their products.

Based on this data, if you are a FI and you aren’t spending at least half your marketing budget in the online space, you are going to have severe problems with acquisitions moving forward.