By Andrew Stevens
Marketers—especially those who are responsible for the budget—know that companies often spend more time, effort, money, and other resources targeting new customers than they do on keeping existing customers.
New customers generally get better prices, amazing offers, and royal treatment, while those who’ve been customers for many years too often feel like they don’t matter. This causes customers to play the “discount game” or the “I’m a dissatisfied customer game” in order to get a better deal. For banks and financial institutions, this might take the form of a higher cash-back rate on credit cards, free checking, breaks on late payments and overdrafts, and so on.
Why not treat them better—or at least consistently—as they work with you long term?
Shift some of the focus and the budget that’s on the new customers into customer retention. Show appreciation for loyalty. Listen to them. Hear their needs. Make improvements to the experience to ensure that they’ll be customers for years to come.
As marketers begin to attract new customers, the focus of their content and messaging should move toward building relationships and partnerships, i.e., shift toward relationships and away from single-transaction thinking and messaging. Winning over the hearts and minds of new customers is not that different from developing personal relationships.
A good place to start is by developing a customer lifecycle timeline.
This should be based on what is known about both potential and current customers. Identify how much and where additional effort and resources should be directed toward supporting ongoing customer interaction and potential transactions.
Critical to this shift is engaging customers at the right time with the right messaging, which should be relevant to customers’ needs at particular touchpoints.
Take the time to:
- Understand prospects and new customers.
- Develop personas.
- Identify their needs and pain points.
- Talk to them about how the company’s products and services can solve their problems.
For example, over the coming years, a newlywed couple may soon find themselves looking for a home mortgage, auto loan, and insurance, while in the longer run, they may seek out savings accounts for their children’s college education, investments, and, eventually, retirement planning for themselves.
As improved customer-nurturing technology has become available, there’s been a more intense focus on developing an overall customer engagement strategy that moves away from spamming prospects and customers and toward delivering targeted, personalized messages to improve the customer experience and retain customers long-term. Marketers can measure and track results more easily, thereby solving the old dilemma of only being able to track ROI for top-of-the-funnel marketing campaigns. Today, through data mining, analytics, targeted messaging, and related processes, marketers have the tools at their fingertips to message, measure, and track ROI along the entire customer lifecycle.
Clearly, this means that the CMO and the CIO will need to work closely together.
You’ll need to achieve a single view of the customer, to personalize the customer’s experience with your company, and to provide seamless omnichannel communications. And this is what customers are asking for. CMOs will need to become more tech-savvy, while CIOs will need to become more marketing-savvy. CIOs can enable marketers to understand both prospects and customers at a much more detailed level because they have access to the data and the know-how about various systems available to do this, allowing marketers to then communicate to the right customers with the right content on the right channel at the right time.
Both acquisition and retention will always be important.
Without acquiring new customers, there will be no customers to retain. But without nurturing existing customers, companies will lose them soon after winning them, and acquisition costs will explode.
On the other hand, retention is about more than discounts and loyalty programs. When banks focus on retention over acquisition, not only will existing customers get the same or better treatment as new customers, they will also reap the benefits of a retention strategy—they will have a better experience. And while customers gain, so do banks. A loyal and supportive customer base:
- Wants to see the institution succeed and grow.
- Is more likely to be using several products/services, not just one.
- Chooses your bank over the competition.
- Costs less (e.g., marketing, advertising, promotions).
- Advocates, spreading the word about the bank—word of mouth is free and the most credible form of advertising.
To paraphrase the old saying, new customers may be silver, but the long-term are gold.
Andrew Stevens is global banking specialist for Quadient, the award-winning leader in customer communications management software. With nearly two decades of experience at one of the world’s largest banks, Andrew covers all aspects of banking operations and technology with respect to customer communications management and customer experience. He can be reached at firstname.lastname@example.org