Innovation lives at the heart of every industry. Each sector must constantly re-evaluate and refresh its approach if it is to provide consistent customer experiences that continuously satisfy and delight. But, as with most things in life, the initial novelty must fade—what once was new becomes commonplace, and standing still means losing client share.
For financial services firms, digital technology revolutionized the way said institutions conduct business. By enabling these organizations to move basic elements, such as bill payment and account management, to the Web, online access now offers customers the power to execute simple tasks independently and efficiently through the medium of their choice. However, with growing client expectations driving increased adoption, these technologies quickly became an integral component of the average customer strategy.
Now, as these opportunities begin to branch out, impacting emerging tools such as mobile, consumer adoption has seemingly slowed. But, looks can be deceiving.
You see, because these conveniences continue to mount, financial institutions must now operate within an industry that’s fragmented, for customers have numerous options from which to select. This saturated market allows consumers to pick and choose their contact channels and, ultimately, the organizations themselves. Thus, in order to constantly bring innovation and value to the customer experience, financial institutions must actively embrace behavioral and demographical data in order to tailor their offerings according to the client’s preferences.
Sustained success in today’s market requires the traditional financial services sector to focus its attention on retention and expansion of the client relationship, for the overall availability of the aforementioned technologies no longer differentiates one organization from another. Therefore, financial institutions must present a value proposition that extends their reach and strengthens client relationships. For instance, financial institutions must treat their varied customer bases distinctively, offering clients of both high and low income opportunities that resonate with their personal status to promote individualization. Clients of high net worth, for example, may gravitate toward wealth management opportunities, while those of low net worth may seek loan assistance. A thoughtful cross-selling strategy builds brand awareness and increases the value of the business relationship with the client, all while enhancing trust on the part of the consumer.
Rewards also factor in when it comes to retention, for such tactics encourage customers to perform desired behaviors in pursuit of compensation. Many credit card providers, for instance, offer cash back incentives to consumers who make relevant purchases, while banks may reimburse clients for conducting certain types of transactions each month. Every reward promotes steady usage and interaction, thereby creating mutually beneficial bonds for all parties involved. By strengthening those client relationships that already exist, financial institutions indirectly boost acquisition rates, for creating positive experiences will generate praise, which, in this saturated sector, often proves to be more effective than direct marketing campaigns.
Ultimately, however, financial institutions face the same obstacles every industry must tackle in today’s market. With every new offering or innovative approach that comes along, customer expectations and demand grow, too. Consumers have become so accustomed to constant change, that elements which were new one moment are accepted as “table stakes” the next, making the average prospect harder and harder to please. Financial institutions must attempt to keep pace with these trends no matter how difficult the task may be, for technology no longer seems to be enough. Consumers are now motivated by the latest, greatest service offerings, and financial organizations’ retention efforts must be prepared to deliver on this demand at every point along the customer journey.
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