By Joe Welu
A couple generations ago, people expected to work with their banker on every major financial transaction for their entire life. Think about that for a minute: our grandparents likely applied for their first mortgage from a person they knew. When they wanted to buy a car, they went to that same person to talk about a loan. When it was time to think about a bigger house, same thing. If they needed help saving for their kids’ college tuition, another conversation.
They knew they’d need different financial products and advice at different life stages, but they also knew they could always turn to their banker at their dependable neighborhood bank.
Somewhere between then and now, many banks abandoned this relationship-based model for mass-marketing strategies focused primarily on acquiring new customers.
But banks today have the capacity to recreate the lifetime relationships that used to be the norm in banking. And if they want customers to stick around—even when they get offered a slightly better interest rate somewhere else—most banks need to put a heavier focus on communications. They must continually demonstrate to customers that they have offerings to meet their present and future financial needs, no matter what life stage they’re in.
That’s no small task. It requires crafting the right message and sending it at just the right time to the right person so that every communication from the bank is highly relevant for the individual customer. It requires, in other words, making the experience of banking more human.
And it has to go beyond addressing the customer’s high-level demographic status.
To reach the level of humanization, banks require three things: customer data, the AI or machine learning technology to process that data in large quantities and the creative talent to turn insights into actionable communications and engagement.
Background: The power of humanized communications
Anecdotally, we all know that human-to-human connections are some of the most powerful. Large-scale studies back this up, showing just how compelling individualized communications are:
- Customers who consider personalization “very appealing” are 10 times more likely to be among an organization’s most valuable.
- Eighty-nine percent of customers say they’re more likely to do business with financial institutions that provide a personalized experience.
- More than half of customers expect personalization on their bank’s website, and 39 percent want personalization within its app.
- As many as 79 percent of people consider their relationship with their financial institution to be purely transactional, but 40 percent say they’d be more loyal if their institution offered more advice and personalization—i.e., a more humanized experience.
Translation: people want to be treated like individuals. And word’s getting out: 74 percent of banks have noted that customer experience is their biggest strategic priority right now. That means better (read: more humanized) customer experiences will soon be the new normal.
Get to know your customers and treat them as individuals
So how can you keep up with the humanized future of banking? The key is to treat every customer as an individual.
- Gather data from every interaction you have with customers (both digital and in person).
- Use technology to translate those data points into a clear picture of that person’s individual needs and wants.
- Compose varied, persona-specific messages about your products that you can deploy as they become relevant in a customer’s life.
For example: the average age for Americans buying their first home is 32. But rather than sending every 30- or 31-year-old customer information about mortgage products, track their behavior.
A 32-year-old customer who works a minimum wage job (which you know because of their direct deposit) and is paying off $40k in student loans (which you know because of their automatic monthly debit) is likely not interested in hearing about mortgage loans, regardless of age. That customer may in fact become so frustrated if you send those materials that they ditch you for a competitor.
Humanization in action
So what might humanized, hyper-relevant communications look like in the real world? Let’s say you notice a series of transactions on a customer’s credit card: a deposit on space rental for next fall. Then an unusual spend at a stationery vendor. Then a swipe at a dress store.
Guess what? Your customer is getting married. This is where humanization can make you seem amazing—if you do it right. Maybe you send information about opening a joint account. Your customer, who is very busy planning her wedding, may be grateful. Perhaps she’d been meaning to do this, and needed a helpful reminder.
So the customer comes into a branch with her fiancé and you chat about the big day. That’s when you find out they’re also looking to buy a home after the wedding. That info goes into your system and once the wedding date passes, you send along information about your mortgage lending products—exactly when they’re ready to consider these products.
The key, of course, is doing this in a way that feels helpful and humanized and not in a way that feels creepy.
Avoiding the “creepy marketing” trap
This is where your creative team will come in handy. You’ll need data to create hyper-relevant messaging and technology to scale across your customer base. And you’ll definitely need creative and empathetic employees making sure your messaging strikes the right notes and doesn’t cross any lines.
Two tips for staying on the right side of the creepy / relevant divide:
- Be super transparent about the information you’re gathering.
- Give customers plenty of opportunities to opt out of some or all of your communications.
Bonus: your customers’ responses (including their decisions to unsubscribe) are valuable data points that you can use to make future contact even more humanized.
Create a marketing flywheel and watch it gain momentum
One important part of the mindset that focuses on winning customers for life is acknowledging that transactions are just one type of interaction that you’ll have with customers. When banks are able to get into this mode of operating, marketing can become a sort of “flywheel” that gains momentum over time. Customers come in, they feel taken care of, loyalty grows, and they stay around.
Bringing humanization to your bank’s marketing materials is a surefire way to get into that mode. Over time, it will yield tremendous returns.
Joe Welu is the founder and CEO of Total Expert, which he started in 2012 in the basement of a real estate office. Fast forward to 2019 and Total Expert is backed by some of the leading venture capital firms in Silicon Valley and has been named the fastest growing software company in the Midwest by the Inc. 500. Prior to starting Total Expert in 2012, Joe co-founded and led one of the top-selling real estate teams in the U.S., achieving over $1 billion in sales volume.
