 |  |  |
Industry News New study says FIs should customize customer interactions 2010-07-21 Financial institutions are constantly looking for ways to increase both customer profitability and loyalty. A new report from Javelin Strategy & Research says that those banks should ditch "one-size-fits-all" models of welcoming and interacting with customers. The study, which examined results from a panel of more than 5,000 finance managers, found that institutions that collected demographic and behavioral data about new customers and used those preferences and behaviors to better interact with them saw reduced customer attrition, higher profits and increased retention and customer loyalty in banking. "Too often, financial institutions treat all new customers the same and use broad-brush cross-selling of products, hoping something will stick," said James Van Dyke, president and founder of Javelin. While much of the focus for many financial institutions is on greater cross-selling among their new customers, the study concluded that banks should focus their attention on developing the banking relationship before jumping into cross-selling mode. Researchers found that customers who launch a new account generally prefer contact via emails instead of by telephone or letter. "By taking a more thoughtful approach of engaging consumers and focusing on deepening those relationships during the first crucial 90 days, financial institutions will increase their likelihood of cross-selling once the relationships are cemented," Van Dyke added. As a way to deepen that relationship, consumers reported that when creating a new account, they often want assistance in learning how to sign up for and use many self-service banking features, such as online and mobile banking products. Institutions that did help customers learn how to use these features showed increased customer retention. "Financial institutions that want to woo and keep new customers should tailor the on-boarding process to each consumer and take the opportunity to educate them about things like shifting their bill payments," said Mark Schwanhausser, a senior multi-channel financial service analyst for Javelin. A failure to properly bring customers onboard can lead them to second-guess their choice, and leave just as quickly as they came in. As PNT Marketing's onboarding whitepaper notes, the rate of customer attrition is doubled during a customer's first 90 days. Improvement in long-term customer retention is something that large banks have been missing following the recent financial crisis. A recent study by J.D. Power and Associates found that while large banks were more likely than smaller institutions to attract new customers, 24 percent of those customers said that they would either "definitely" or "probably" switch banks again within 12 months. 
Retention analysis helps retail banks improve customer relationship management Recent Marketing Strategy and Planning News iPhone app poised to help banks improve customer retention through rewards program Recent Customer Attrition Retention, and Loyalty News Future customer loyalty solutions require tailored offerings
|
 |
 |
 |
 |
 |
 |
Contact Us | FAQ | Site Map | PNT Privacy Pledge | © 2008 PNT Marketing Services