Latest Trends in Targeted Marketing
Financial Institutions are struggling to differentiate themselves from competition. The major source of this comes from the fact that most of these organizations have similar offering, rates and services for the same pool of customers. Adding to this, customers’ expectations are at an all-time high due to the changing customer demographics and digitization. They want more personalized, accessible, automated and targeted offerings and services. ‘One size fit all’ does not work in today’s competitive space where customers are spoilt for choices and brand loyalty is at an all-time low.
The only way to stay competitive is through ‘Personalization’.
Ever wondered how Netflixs and Amazons of the world exactly know what you are looking for? For instance, Netflix precisely knows what series you might be interested in and Amazon is right every single time in recommending the product you just logged in to purchase. Nearly 35% of Amazon’s sales comes from such personalized recommendations and nearly 56% of them are likely to turn into repeat buyers as well. The bar of personalization is already set high by these tech titans and customers are expecting the same level of personalization from their banking partners.
Banking Customers: Needs and expectations
Retail customers want personalized, automated and easy-to-access services. They want their banks to provide them with the best experience that offers the right products and services seamlessly, at the right price and time, and with the right mix of digital and personal. Budget management, preparing for retirement and protection in the event of difficulties are the top three expectations of retail customers.
Traditional banking models are no longer sustainable in the present context. Even with the customer expectations changing drastically, most bank’s marketing strategies target general audiences. Mass marketing campaigns are proving to be disappointing as today’s digital customers have plethora of options available at the tap of their phone and they are more than ready to tune out campaigns that don’t come with relevant messages.
Targeted and insights driven marketing is the way to keep customers engaged and interested in communications. Predictive or prescriptive approaches can be used to understand the needs and desires of customers. The power of data and technology needs to be leveraged to come up with one-to-one marketing solutions which deliver individualized content via data collection and analysis, creating relevant content and engaging prospects by communicating with them individually. Analyzing data through data solutions, including artificial intelligence tools will help to generate targeted communications.
Pre-requisites for targeted marketing
1. Data Foundation: Data is the key to successful targeting. It is the only means to dive deeper into the needs and wants of the customers. Although most organization have data in some form or the other, they are mostly unstructured and siloed. To be able to make sense of the data it is important that different functions come together and integrate data make it accurate and consistent.
Some of the existing technologies like CRM (Customer Relationship Management), DMP (Data Management Platform) and other emerging ones like CDP (Customer Data Platform) can help achieve this.
2. Decisioning: Once the right set of data is available, it now becomes important to find insights into the data and make informed decision. Signals such as “cart abandoned” or “browsed but didn’t buy,” time spent on the platform, frequency of interaction can help make decision of how, when and where to target the customer. A travel company recently saw that coordinating messages across channels drive a 10 to 20 percent incremental boost in conversion rates and customer lifetime value.
Various Data Analysis and mining tools and Information Visualization tools can support the decisioning process. Automating the decisioning process through CDPs with Artificial Intelligence and machine learning built into them can provide deeper and meaningful insights into customers journey.
3. Design: You have data and you have decided how to target the customer based on their needs, preferences and purchase patterns. It’s now time to craft the right offers, messages and communications. For this, various teams should come together and develop new ideas and ways of engaging with the customers. Analytics can help in market sizing, testing the impact and suggest changes that should be made to better tailor the communication.
4. Distribution: What is the use of all the efforts, if the content or ad is not sent out to the customers through the right channels. It is necessary to make the communication engaging but at the same time to ensure that it does not interrupt the task which the customer has come to fulfil on the platform.
Meeting the customers right at their intent
To have competitive advantage in the digital environment, businesses need to control relevant data surfacing across multiple third-party websites and applications. By furnishing all internal data in graphs and publishing it, brands can localize the information based on location and customer’s intent. For example, if a customer searches for ‘Apple Bank wealth advisor near me’ in Google, direct links to wealth advisors of Apple Bank residing near the customer’s location will be shown to resonate well with the customer’s need. This will enhance the website traffic and reduce the bounce rate as customers will not experience any friction with digital assets while evaluating or purchasing the product.
Example of targeted marketing
a. Using predictive modelling that analyses customer’s life events and purchasing pattern, the app might pitch auto loans to consumers who recently bought a home because a new home buyer is often looking for a new car as well.
b. Using real-time information about the customer’s current whereabouts/location (say, shopping mall, grocery store, pharmacy chain), the bank can message about the bank credit card that the customer could use for exciting offers and cashbacks.
c. Location and debit transaction data can be combined to track customers’ travels abroad. Using these inputs an overall travel profile of the customer can be built, which includes data on the frequency of travels, spends on purchases abroad, most visited destinations, or if the customer lives abroad. This can then be used to market the foreign currency accounts and travel insurance that the bank provides or the discounts on air tickets associated with the bank’s debit/credit card.
Other examples include auto approving individuals for loans and mortgages, recommending account upgrades and changes at key moments, send information to customers with a breakdown of their expenditure, average weekly or monthly spending or even new trends in their purchases and many more.
‘New Normal’ for banking business
Banks must run well-functioning mobile and online channels so they can send out messages or offers. They should leverage data and technology to present the pitch at the time when a consumer would want to consume it and in a format that doesn’t interfere with their banking tasks. One-to-one marketing communication will drive growth, loyalty and profitability making customers advocates of the bank that they are banking with.
