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Customer Engagement in Banking

4 Best Practices for Doing it Well

Blog,
Don Bergal – Sr. Vice President, Marketing

As you set your bank’s strategic goals, don’t forget to add customer engagement to the top of your list. Why focus on engagement? Studies clearly show that engaged customers are better customers – both in terms of profitability and recommending your bank’s services to others.

Customers who are fully engaged bring $402 additional revenue yearly, 10% greater wallet share in deposit balances, and 14% greater wallet share in investments compared to those who are actively disengaged. And 71% of engaged customers say they will use their current bank for the rest of their life.

With compelling statistics like these, how do you build customer engagement in banking? The first important aspect to understand is that it needs to be a long-term, well-thought process. It begins the moment a potential new prospect researches your bank and it never ends – even after they’ve been a loyal customer for years.

Helping new customers build an engaged relationship with your bank starts with setting a strong foundation, which includes identifying areas where new customers commonly get “stuck” in acquiring and understanding your products, removing friction from the onboarding processes, and demonstrating that you genuinely care about their business.

4 Principles for Customer Engagement in Banking

1. Take Advantage of the 90 Day Window After Onboarding

Research from J.D. Power found that the optimum number of communication touches is seven during the 90 day period that a new customer signs on to your bank. To do this well requires utilizing different communication channels, such as email, phone, and postal mail, and deeply understanding the types of information your new customer wants and needs. For instance, mail them a welcome kit as soon as they sign-up for an account, call to see if they need help with common tasks such as using their mobile phone to make deposits, and continue to send them periodic communications that are helpful.

2. Don’t Sell Before Building Trust

What’s the point of these ongoing communications? Building trust. It’s imperative that a strong foundation of trust is forged before you attempt to sell your customers on additional products. This means giving customers the necessary information they need to best use the service they’ve opened with your bank.

If they’ve opened a checking account, for instance, explain how to use services such as direct deposit, online bill paying, overdraft protection, mobile banking, and more.

3. Capitalize on Mobile

Supporting customers’ desired communication channels also goes a long way to building customer engagement in banking. Younger consumers especially want quick, pain-free ways to interact with their bank accounts including using their mobile phones to make deposits, check account balances, and transfer funds. It has become an expectation that banks will provide these tools, and they’re easy to use.

Similarly, using SMS and email to communicate with customers can significantly improve relationships because of mobile consumption patterns. To make these types of communications successful, keep your messages brief and to the point. Quickly answer “What’s in it for me?” and offer easy response options that are optimized for mobile devices.

Using short videos can also help increase engagement. Banks are successfully using videos to educate their customers on common queries they have about their products. Many customers are far more likely to watch a video than call a branch to ask a question. Just be sure videos are optimized for mobile devices and consider adding an entertaining element to them.

4. Stay in Touch

Customers may need more than one communication to take action. But it’s also important not to barrage them with needless communications; rather, used alternative forms of encouragement to expand the relationship.

For instance, if prospects started to fill out an online application but abandoned it, reach out to them and offer assistance. In the case of prospects filling out an online checking account application, for example, collect their personal information early in the process and check back with them if they don’t finish. You can also use digital re-targeting to follow up with those who have opened your emails but didn’t respond, click online sales banners, or are wandering the web shopping for services you provide.

Ramping up your customer engagement strategy is a worthwhile endeavor that builds long-term customer loyalty. Customer engagement in banking is the cornerstone of a relationship that includes trust, ongoing communications, and steady growth in service ownership and revenues if done correctly.

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Blog,
Don Bergal – Sr. Vice President, Marketing