MORE PRECIOUS THAN GOLD. A framework for delivering the next best offer in financial services.

Transcription

1 MORE PRECIOUS THAN GOLD. A framework for delivering the next best offer in financial services. 2016

2 Customer experience PAY OFF IS HUGE. A few years ago, the fourth largest credit union in Illinois embarked on a marketing makeover. In just one year, Baxter Credit Union (BCU) upgraded its outdated campaign management system and harnessed its scattered member data, creating more meaningful customer experiences and increasing profitability. We wanted to improve cross-channel marketing, secure a single view of our members, refine our segmentation, and increase response rates so that we could provide the best offers for our members, says John Sahagian, vice president of marketing at BCU. 1 2

3 In just one year after upgrading its marketing software and unifying its member data, the credit union saw a 76 percent growth in new accounts its highest growth ever. We ve also seen a solid increase in response rates since our new approach, Sahagian says. Account balances increased 28 percent from 2012 to 2014 as a result of a more targeted campaign strategy. And by aggregating and unifying data from many sources, we have the insights to give members relevant, timely support when they need it. 2 76% After upgrading its marketing software and unifying its member data, Baxter Credit Union saw a 76% growth in new accounts its highest growth ever. 3

4 BCU wasn t alone in its marketing challenges. According to a survey by Econsultancy and Adobe, 92 percent of marketers don t have real-time, data-driven marketing capabilities, 88 percent of marketers don t have a holistic customer view, and 91 percent use different platforms and disparate data to engage with customers. 3 Marketers are beginning to make changes as they see advances in information technology, data gathering, and analytics, making it possible to deliver something like or perhaps even better than personal advice from your banker. Using increasingly granular data, from detailed demographics and psychographics to consumers clickstreams on the web, financial institutions are now creating highly customized offers that steer consumers to the right financial services or products at the right moment, and in the right channel. These next best offers aren t unique to only the financial marketer. Delivering experiences in real time is top of mind for marketers of all industries. An effective next best offer strategy coordinates and connects your marketing efforts across channels, and provides relevant and personalized messages to your customers. In four steps, we ll show you how establishing a next best offer framework serves not only your customers, but also your company s bottom line. Build or sharpen your next best offer strategy in four steps: 1. Define your objective. Craft your next best offer strategy to achieve specific goals, such as increasing product penetration, loyalty, or conversion rates. Be ready to modify your objectives to respond to changing circumstances. 2. Know your customers. Aggregate customer data (demographics, psychographics, purchase history, and social, mobile, and location information) into a targetable profile. Collect data on your offerings (product attributes, profitability, and availability) and purchase context (customer s contact channel, proximity, the time of day or week) to understand context and response. 3. Decide and deliver. Match the right offer with the right channel. Automate delivery with behavioral targeting where appropriate. 4. Learn and evolve. Unify reporting across interaction points to create a cross-channel view of performance. Monitor performance and make changes to improve future offer performance and audience reach. 4

5 1. Define your OBJECTIVE. Many organizations struggle in their next best offer efforts not because they lack the capability but because they lack clear objectives. So the first question is, What do you want to achieve? Increased revenues? Increased customer loyalty? New customers? Answering the what and the why are the keys to highly effective marketing, says Jared Lees, senior industry manager at Adobe. If you know what a person wants and why, the chance of meeting their needs is significantly higher than if you play the guessing game. When you have a next best offer strategy, you re able to answer both the what and the why. 4 Starting with a clear objective is essential. So is being flexible about modifying it as needed. Additionally important is making sure your entire organization buys into this objective and adopts a customer-centered team approach. Beware of silos. Your web team, mobile team, app team, and call center may each do a good job, but not in the customer journey. We re now in a time when we need to work together and serve together in ways we haven t done before, says Vijayanta Gupta, head of product and industry marketing at Adobe. Marketers who understand that what we do across the entire customer journey is more important than what we do at individual touchpoints will transform their enterprises. And with this transformation, we ll learn to work together with sales, production, engineering, research and development, human resources, and finance. We must work with each other. Our customers are forcing us to do that. 5 Answering the what and the why are the keys to highly effective marketing. When you have a next best offer strategy, you re able to answer both the what and the why. JARED LEES SENIOR INDUSTRY MANAGER Adobe 5

6 2. Know your CUSTOMERS. Collect and aggregate detailed data about your customers, your offerings, and the circumstances in which purchases are made. This will allow you to know your customers, know your offerings, and know the context of your customers purchases. Information valuable for tailoring next best offers can be relatively basic and easily acquired: age, gender, number of children, residential address, income or assets, and personal lifestyle and behavior data. Previous purchases are often the single best guide to what a customer will buy next, but that information may be harder to capture, particularly from offline channels. Loyalty programs can also be a powerful tool for tracking consumers buying patterns. Many banks promise to be there for the customer but don t live up to this promise in reality. When you execute a next best offer strategy, you walk the talk, which deepens trust with customers, says David Poole, director of business and brand strategy at Sapient. 6 Collect consumer and behavioral data from multiple sources. Create valuable and intriguing offers. While technology takes care of most of the heavy lifting, it s up to you to create offers that interest customers enough to click, call, or set up an appointment. Without great offers, the work of personalizing offers for each customer won t result in the return you re expecting. Banks have an average of 24 seconds to make an impression with a customer using a mobile device, Poole says. If you re marketing to someone who s banking while also ordering a pair of shoes online and checking their social media, you have to be concise and efficient. 8 Use the detailed customer profiles and segments you create to develop your offers. The information you collect will provide insights into what your customers care about, which is key to designing effective marketing messages. By using this information in all aspects of the offer from the tagline to the discount, and even the images used your messages will resonate with customers in a way previously not possible. Be sure to collect data from a variety of valuable sources, such as financial accounts details, interactions with call centers, mobile usage, social media, and website activity. You can also purchase third-party data to capture a more complete customer picture. Josh Sutton, vice president and managing director at Sapient, says it s important to collect not only demographic data but also behavioral data for the best insights. By collecting behavioral data, you can determine what people actually do, not what they say they do, he says. When you segment people based on traditional segmentation, such as age and geography, two people may look very similar. But when you use behavioral information, which is what motivates buying, you see that they are very different. 7 6

7 3. DECIDE and deliver. With a better understanding of your customers, the next step is to decide which offer the customer is most likely to respond to given their current context and deliver it in the most appropriate channel. Technology allows you to automate and predict a customer s next action by looking for triggers and flags. You can then use predictive analytics on the customer segment data to infer what they ll do in the future, such as a customer purchasing life insurance or thinking about buying her first home. This approach allows you to match customers with the most relevant offers. With additional modeling based on data, tools can score customer segments against offerings and determine which offer will most likely meet their needs. James Duncan, managing director of client services at Epsilon, cautions marketers to think of next best offers less as laundry lists of bundled products and more as a continuum of customer service. Look at the relevance of the people you re giving the offer to and consider the your offers as customer service, Duncan says. 9 For example, if a new customer opens a checking account, don t immediately pepper them with home equity offers. Instead, since the customer is getting on their feet financially, perhaps the next best offer is a customer service message. How can you help them learn more about their banking account? Once you identify the offer that matches the customer s needs and context, the next step is to deliver the offer in the right channel with the right frequency. A carefully crafted offer is only as good as its delivery and timing. Put another way, a brilliant that never gets opened might as well not exist. Should the offer be sent to a mobile device? Printed on a register receipt? Delivered at an in-store kiosk? Often the answer is relatively straightforward. In addition to behavioral and consumer data, you must also have accurate data on how each customer uses different channels, such as social media, , and websites, as well as previous success rates with direct mail and telephone calls. By using this information to send the offers to each customer on their preferred channel and also combining channels you ll deliver a personalized experience and increase the likelihood that the offers are successful. Determine the frequency of offers. Use customer segmentation data to determine the frequency and urgency of each offer. The offer won t be effective if it s not presented enough times to the customer, but it could turn the customer off if it s presented too many times. One offer about college planning might not be enough to prompt her to pick up the phone. But if she s received eight different offers, then she s likely to get irritated and call another institution, or worse, leave the bank for good. Coordinate the delivery of messages. It s not typically a single offer or message that s the tipping point for a customer taking the next step. Sales happen when a customer receives a series of well-timed, valuable offers that complement each other. The offers need to work together in messaging, timing, and channel. If data analytics and testing show that three offers is the most effective number, but you deliver all three messages in the same day, your campaign won t have the desired effect. 7

8 THE CROSS-CHANNEL customer journey. Awareness. When a visitor comes to your website, they re anonymous. But even on the homepage the visitor receives offers based on targeting to segments, algorithmic learning about what all users like, or automated recommendation based on popular content or products. Consideration. After digging deeper into a home loan section, the visitor requests a quote. Make sure the information they re looking for is easy to find, the user experience is optimal, and the conversion process is as frictionless as possible. As the visitor leaves your website, retarget with a special offer for home loans. Self-identification. The consumer responds to this retargeting and decides to sign up for a home loan. This is the conversion point where they move from unknown to known, as they must provide critical information. Now we know that you re dealing with a man named Mark Aaron, that he s a student at the University of Nevada, and that he s a home loan customer. The possibilities for personalization increase exponentially at this point. Cross-sell/upsell. Mark receives a series of nurture s designed to deepen his engagement with your brand, cross-sell other loan types, and ultimately increase his lifetime value to the company. As part of this communication stream, he receives an offer to bundle his home loan with a discounted auto insurance policy. Additionally, Mark is prompted to download the bank s mobile application, which provides another channel for ongoing communication. Now you can send him personalized push messages letting him know about other special offers. Advocacy. Mark then joins your institution s Facebook page. Self-identification Cross-sell/upsell Awareness Consideration Advocacy 8

9 4. LEARN AND EVOLVE. Creating a next best offer is an inexact but constantly improving science. Like any science, it requires experimentation. Some offers will work better than others. You ll need to measure the performance of each and apply the resulting lessons. Think of every offer as a test. It s easy to think your work is done once the offer is sent to the customer. You can develop rules of thumb from your next best offer s performance to guide the creation of future offers until new data requires a modification of the rules. These rules will differ from one company to the next. Leading financial institutions, however, use the following rules to learn and evolve. Develop a unified view across channels. Remember, data needs work. Despite having the data and the delivery capabilities, what still trips up countless marketers is that they re drawing on information from disparate sources without creating a unified view of the customer. One data point is coming from your marketing automation system, another foundational piece is from an existing customer relationship management system paired with X and Y from Google all competing with some metrics you ve pulled from social media. Sound familiar? More importantly, what can you do with that? The short answer: on its own, not much. The key to successful cross-channel customer engagement is using a single marketing view of the customer, says Mathieu Hannouz, evangelist for Adobe Campaign. 10 This view should combine personally identifiable information and online and offline transactions and behaviors. No matter the entry point, platform, OS, device, geolocation, or path, this approach will enable you to recognize your customer and audience segments. From those views, you ll be able to continuously tap into existing and real-time data sources to optimize and, ultimately, deliver meaningful relevance as your customer moves through your branded experiences. Find out what works in real time through testing. It used to be that financial institutions didn t know what messages, channels, and offers were most effective until a campaign was over. But with real-time testing, you can quickly identify and roll out the offer that resonates most with each customer segment. This approach allows you to increase your success in the current campaign and spend your marketing dollars in the most effective way possible. In the past, financial institutions were only able to understand general segments regarding the success of marketing, but now marketers have the tools to evaluate the results for each person. You can remove personal information and use a unique identity to map the first-party data, Sutton says. This way you know if the person purchased the product, and you can look at the targeted segments and know which offers worked and which need to be revised. 11 So, start testing now. As you define your objective, gather data, decide and deliver on the right offer, and learn from each campaign, your customers will be impressed at your superior service. You ll transform each offer and customer experience from rags to riches. 9

10 We can help. Adobe can help you seamlessly capture customer data, track offer performance, and deepen customer relationships with more consistent and relevant offers across channels. See how our Adobe solutions work together to help you build your next best offer. Adobe Analytics collects customer behavioral data for real-time analysis and detailed segmentation across all of your marketing channels. Adobe Audience Manager, a data management platform, helps you build unique audience profiles so you can identify your most valuable segments and use them across any digital channel. Adobe Target makes it easy to identify personalized content through automated tests, so you can deliver the right experience to the right customer. Adobe Campaign helps you personalize and deliver campaigns across online and offline channels. Paid media Owned digital data 1st party anonymized data 2nd and 3rd party anonymized data Targeting and optimization A/B testing Automated targeting SEM Social Display Digital channels Web App Online and behavioral analytics Data management platform Offline channels Customer analytics Multi-channel reporting Aggregate data sources Create audience segments Campaign management Call center Branch/ agency Kiosk/ ATM Customer data Cross-channel coordination Offer management Communication / direct mail SMS texts Social Analytics attribution and analysis 10

11 Adobe Marketing Cloud empowers companies to use big data to effectively reach and engage customers and prospects with highly personalized marketing content across devices and digital touchpoints. Eight tightly integrated solutions offer marketers a complete set of marketing technologies that focus on analytics, web and app experience management, testing and targeting, advertising, audience management, video, social engagement, and campaign orchestration. The tie-in with Adobe Creative Cloud makes it easy to quickly activate creative assets across all marketing channels. Thousands of brands worldwide including two-thirds of Fortune 50 companies rely on Adobe Marketing Cloud, with over 30.4 trillion transactions a year. 1 Adobe Customer Story, Baxter Credit Union. 2 Ibid. 3 Channels in Concert: Trends in Integrating Marketing, Q Quarterly Digital Intelligence Briefing, Econsultancy and Adobe. 4 Personal interview with Jared Lees, senior industry manager at Adobe, November 4, Vijayanta Gupta, Digital Disruption is Just the Beginning, Social Business Forum Conference, July 7, Personal interview with David Poole, director of business and brand strategy at Sapient, November 2, Personal interview with Josh Sutton, vice president and managing director at Sapient, November 2, Personal interview with David Poole. 9 Personal Interview with James Duncan, managing director of client services, Epsilon, January 29, Aligning Disparate Data Sources for a Better Big Picture, Adobe Blog, October 7, Personal Interview with Josh Sutton. Adobe the Adobe logo, and Creative Cloud are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners Adobe Systems Incorporated. All rights reserved. Printed in the USA. 2/16 11