product executive of financial services industry sales at IBM
The finance industry has long been regarded as complex, restrained by regulation and too internally focused, paying more attention to its own development than providing the financial products and services that customers are looking for. However, in todayâs economic climate, and in a market where customers are becoming more knowledgeable and powerful thanks to social networks and online communities, financial organisations need to make sure they look beyond the development of their products, and focus on pleasing their customers as another means of generating revenue.
In a previous bobsguide article we discussed how banksâ and customersâ expectation of social media differ somewhat. This time we look at the importance of integrating social as part of a CRM strategy.
Data overdrive - the explosion of online data and social media
Ten years ago, the financial industry was incredibly different. Customer service was generally face-to-face and the idea of interacting with a customer online was largely unheard of. Today however, customers, whether they are consumers or businesses, are empowered by technology and the abundance of information and services that are readily available to them online. They expect to engage with financial organisations across a number of channels, such as the high-street, through mobile and now even social media, whenever they want.
This means that getting closer to these customers and meeting their needs must be a top priority for chief executive officers (CEOs) in 2012. And this approach should not just be in the final sales and communications cycle, but should drill right down to the way the financial organisation sources, markets, sells, and services financial products. Financial organisations need to put customers and their opinions at the centre of business insights, decisions and actions. This will lead to greater agility, customer loyalty, revenue and margin growth.
One of the most difficult, but important places to start in this new approach to customer relationship management (CRM) is social media. Customers now make their purchasing decisions from a very informed and knowledgeable standpoint - much of which comes from social media. So it is vital that organisations get to grip with this technology.
Using social media as a channel for customer engagement raises interesting challenges for traditional customer relationship and marketing approaches. CRM strategy, enabled by processes and technologies, is architected to manage customer relationships as a means for extracting the greatest value from customers over the lifetime of the relationship. These strategies typically concentrate on the operational responses required to manage the customer. However with the rise, and now domination of social media, companies are losing control of this relationship. Instead, customers (and their highly influential virtual networks) are now driving the conversation, which can trump a companyâs marketing, sales and service efforts with unprecedented immediacy and reach.
Financial organisations need to embrace this shift with a new strategy and integrate social media as part of their marketing and customer service strategy.
Real-time conversations between customers are a valuable source of new ideas, customer insight and opinions, which can be fed into customer engagement and marketing campaigns. Customers are sharing a wealth of information about their likes and dislikes, and are taking the opportunity to review and learn about new products, engage with organisations directly and even participate in online discussions.
As this recent study by IBM found, analysing billions of lines of data from social networks can be done, and can reveal interesting insights into human behaviour and predicted purchases.
To react to and act on these conversations, banks need to be able to capture and analyse the mostly qualitative information available on various social networks, to meet the expectations of their customers. It has been established that customers crave promotions and personalised offers, rather than detailed information and traditional marketing about services already on offer. Understanding the information that customers are giving out across mobile, email and social network interactions with banks and with each other is the best way for financial services organisations to develop offers that yield the highest possible returns.
Following by example
Of course, social media is only a small part of the equation and there are many other channels and factors which come into play when managing customer relationships and marketing strategies. While many financial organisations are still learning about social media, the same technique described above can be applied across multiple channels, such as phone, within the financial organisation itself and on its website.
Technology is powerful in terms of generating and maintaining a meaningful marketing dialogue with clients over time. By providing a personal and relevant offer that can be extended across all sales channels, financial institutions can equip themselves with the tools to develop long term customer loyalty and advocacy. While harnessing the power of social media may still be a little way off for many financial institutions, it is also vital that this data minefield is harnessed so that financial organisations can take the power back into their own hands.