Monday, June 24, 2013

Digital Shopping Has Transformed The Bank Purchase Funnel

Historically, customers came into a branch to research financial products prior to purchase. Today, the majority of customers have done significant online research before entering the lobby, transforming the bank and credit union purchase funnel. 

Unfortunately, these digital shoppers get confused as they try to navigate tedious web pages or become unimpressed when they encounter unprepared branch personnel, requiring financial institutions to develop an improved multichannel sales strategy.

When respondents to the Novantas 2012 Multi-Channel Sales Survey were asked to identify their preferred channels for product research, online was cited as the top avenue by 63 percent of respondents with only 13 percent of the respondents stating that the branch was their primary research source. A majority of these same respondents, however, preferred to open an account at a branch, with only 36 percent preferring to open an account online.

The Novantas research found that preferences differed based on the account the customer was researching, with customer using the online channel more when shopping for a new checking account (69%) than for a mortgage (57%) or investment product (55%). Again, the branch channel was not the first choice for initial research.

Multichannel Purchase Funnel

But the online channel was not the only channel used by consumers shopping for bank or credit union products. In fact, Novarica research in conjunction with FindABetterBank found that consumers who were about to open a new checking account in the next 90 days expected to use several channels before deciding on a new financial institution.

The customer trend towards 'having it both ways' (digital shopping and branch-based opening) has a variety of implications, especially when the impact of mobile marketing through smartphones and tablets is taken into account. According to a recent Novantas Review feature entitled, "Winning With Online Shoppers", banks and credit unions must realize that their websites need to drive sales traffic to the branch and help complete sales online.

Gaining Visibility Online

Now more than ever, banks need to gain visibility online, since more and more consumers use search engines like Google to start their research process for a new product or new financial services provider. It is important for a bank or credit union to be visible as close to the top of searches as possible to have a chance in today's marketing warfare. As Novarica managing director, Robert Rubin put so succinctly in an online interview, "Improving online visibility in search and on third party sites is imperative. These are the online resources consumers use to shop. If they can’t find you, how will they know you exist?"

Despite all of the hype around paid digital placement, the Novantas research found that most consumers (roughly 80%) only clicked on organic search results that depend on keywords and search relevance. To consistently rank in the top five organic results, a bank or credit union must optimize their website so that: 1) the site has greater relevance to keywords used in local searches; and 2) the site reflects indexing activity of search engines. Novantas also recommends a program that establishes inbound links from related websites to stimulate traffic.

Although only 20% of online shoppers click on paid links through search engine marketing (SEM), the links still provide visual cues and reinforce brand presence. The value of SEM can only be determined through testing and ROI evaluation. As mentioned, the power of engaging third parties for referrals and mentions is one of the most powerful tools to reach online shoppers.

Improving the Internet Banking Sales Experience

Expanding the relationship of current customers who are comfortable shopping online is probably more important than many of the prospecting strategies discussed above since the cost of expanding a relationship is lower than finding a new customer. 

According to a recent study from Mapa Research entitled, "Digital Sales: Enhancing Existing Customer Relationships," personalization of the buying experience is core to successful conversion of customers. In reviewing the sales strategies from over 30 providers in 10 different countries, Mapa found that relevance is imperative in both the targeting of customers and the tailoring of offerings. 

The sales messages can occur at any point while the customer is engaged in their online banking activities. Obviously the account activity screen is often used for customized messaging. The key is to provide pertinent offers without being obtrusive or interrupting normal digital activities. While some of the personalized messaging is in a static position on the account summary page (NAB Bank 'My Offers'), other institutions were found to use pop-up windows to draw additional attention (NatWest). 

With Bank of America, Mapa found that when a customer wanted to open a new checking account they were shown additional 'go with' services within the account opening process. If the customer does not want to open an account online, they can schedule an appointment with the phone number provided.

Providing support options at key moments of the sales journey is also important according to Mapa. For instance, Natwest provides a link to an advisor if a customer looking for a new service wants to abort a sales process, while Citibank also provides assistance prompts throughout the sales journey. Many examples of integrated sales support are offered by the larger banks as part of their internet banking sales experience.

The 85 page Mapa Research report (available for free review and purchase here) also provides many visual examples of institutions that cross-sell products to existing customers upon the log out of internet banking. While some organizations provide several product promotions on the log out screen, the best limit the products promoted to those relevant to the customer.

Selling Through Mobile

The frequency of engagement via mobile is higher than with either internet banking or tablet engagement, yet the length of engagement is significantly shorter on average. This makes the sales journey using a smartphone much different than through other channels.

For several institutions reviewed as part of the Mapa study, the sales message preceded login or was integrated within the login process, with product information, news and links to the bank's website provided at the onset of the mobile experience. Where this was done, it was important to provide a 'one click' option for the customer to receive more information or begin the sales process.

As with internet banking, there are many ways banks are beginning to provide customer service and agent access through the mobile device, While less prevalent in the U.S., many organizations overseas that have integrated customer service within their sales process.

Similar to the internet banking examples, Mapa provides many visual examples of banks that include selling as part of the logout of the mobile engagement. This is to avoid any interruption in the primary reason the customer is using their mobile device (balance check, transfer funds, etc.) 

The good news is that any message on the mobile device will usually be seen multiple times during any period due to the number of times many customers use their mobile device and since many customers access their accounts using multiple devices (desktop, smartphone, tablet).

Additional coverage of mobile sales and servicing innovations can be seen on my previous post entitled, "Banks Accelerate Mobile Banking Innovation".

Tablet Banking Sales Experience

Since many tablet applications continue to be non-customized versions of a bank's internet banking experience, the integration of selling using the tablet has lagged other channels. 

Despite the slow start, there are some examples of how banks have leveraged the tactile experience and social interaction capability to provide a better sales dialogue. Tablets also provide a much better graphically oriented tools that can build engagement. Since the time spent on during a tablet engagement is significantly longer than a customer spends on a smartphone, the potential for sales success is greater with this channel. 

The tablet also is a much better media to integrate live chat and other forms of customer support that can improve sales results. While the tablet should not be considered the channel to place all product information, it does provide a very valuable stepping off point to a bank's website. Through links and redirection, the tablet can be a great asset to any bank wanting to improve their digital sales results.

Closing The Multichannel Sale

The advantage of cross-channel integration is the possibility to sell with each interaction through each channel in a consistent and relevant manner. In other words, each interaction becomes a sales opportunity. The objective is for banks to allow prospects and customers to switch between channels, at will, without breaking the sales cycle.

In conjunction with online visibility and internet and mobile/tablet marketing, it is clear that most financial institutions need to significantly simplify the customer journey from online or mobile inquiry to completed sale. According to both Mapa Research and Novantas, the majority of banks are lagging other industries in their multichannel shopping experience, potentially losing potential customers who get frustrated. There is definitely a revenue consequence to not investing in process and site simplification (e.g. fewer clicks and clearer communication).

Complexity and lack of personalization in products and/or process creates an immediate wall for consumers that are increasingly mobile, less tolerant of difficulty in completing a process seamlessly online, and more sensitive to non-customized offerings. In addition to improving the channel experience, forms must be simplified as well as links between channels.

In addition, once a shopper is engaged, the best strategy is to provide a number of channel options for fulfillment since research shows that shopping and buying can be disjointed. Integration of channels is necessary. Do we enable online account opening? How about through mobile channels? Can customers connect directly with a live agent? Can the ATM channel assist in the process? Has social media been considered as part of the digital sales strategy?

Robert Rubin provides this advice, "Look for opportunities to present add-on offers within a sales process. Also, PFM solutions from vendors like Intuit and MoneyDesktop provide opportunities to cross-sell within the online banking interface. For example, letting the customer know that your credit card has a better rate then the card they’re currently using."

Finally, banks and credit unions should consider segmentation around channel use since customers differ so much with regard to how they interact with their financial institution. According to Novarica's Rubin, "Consumer behavior is changing and branches are a very large fixed cost for financial institutions. Successful cross-selling requires channel use segmentation to allow the ability to provide customers the combination of 'right time, right offer, right channel'. Understanding how customers use channels is essential."

Need For Management Buy-In

A relevent sales experience needs to meet the content and functionality needs of the customer. Both Mapa Research and Novantas believe a shift in management mindset is required to eliminate current channel silos and to support the investment in the overall sales process regardless of where a sale begins or ends. This will require improved measurement of sales results across channels and a rethinking of products suites based on the needs of the online and mobile customer.

Note: The Mapa Research report provides some excellent examples of global banks that are succeeding in integrating channels for improved multichannel selling. In addition to ABN AMRO and ASB and others, the report provides a case study of Commonwealth Bank's personalized sales process.

Additional Resources

Winning With Online Shoppers - Novantas Review (June 2013)

Winning in a Multichannel World - Novarica (April 2013)

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  1. This is an excellent article and every bank marketer needs to read it. There are still too many static community bank websites and I hope they will see this as a wake-up call.

  2. A key concept behind this multichannel approach to sales is knowing your customer. If you can apply everything you know about your customers (both what they tell you and what you find out) to all of your sales interactions across all of your channels, then you can make cross-sell offers that are personalized and frictionless.

    For example, let's say that you have a customer who visits your website and is presented with an attractive credit card cross-sell offer. They don't accept immediately, but the next day, they ask the teller about the offer while they are in the branch. The teller is able to pull up the offer and complete the sale, providing the customer with an exceptional buying experience and the bank with a new and profitable account.

    This is the type of <a href=">multichannel sales experience</a> that large banks need to create and it starts with breaking down siloed channels and sharing customer information across the enterprise.

  3. I think consumers are still concerned about security when it comes to online banking. Creating a digital marketing campaign that targets what consumers want and makes them feel reassured their information is safe would be a winner. People know they are safe when they walk into a bank. Websites have to provide the same feeling of security.