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eBook: How to Build a Lifetime of Financial Loyalty

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eBook: How to Build a Lifetime of Financial Loyalty

  1. 1. HOW TO BUILD A LIFETIME OF FINANCIAL LOYALTY Digital marketing for all five stages of the customer lifecycle
  2. 2. Financial services are changing. Online and mobile-first players are making impressive strides in the race for customer acquisition: ɥɥ Marcus—Goldman Sachs’ online consumer bank —attracted $45 billion in deposits and $5 billion in loans in fewer than three years. ɥɥ Apple provides the technology infrastructure for easy and convenient mobile payments, cash-back rewards and financial management tools to its 1.4 billion device users. ɥɥ Online insurance provider Lemonade has more than 250,000 customers and $180 million in funding as of late 2018.
  3. 3. 3 INTRODUCTION The five stages of the financial customer lifecycle These digital disruptors are winning customers from traditional financial brands and raising customers’ expectations. National and regional banks, credit unions, card issuers, lenders and insurance companies still rely on direct mail and auto-dialers for marketing, but these tactics fall short of these increasing expectations. This lack of loyalty—and the need to build it—was underscored when MasterCard CMO Raja Rajamannar famously said, “Three-quarters of brands could disappear and no one would care. If you look 15 or 20 years back, people were seeking reassurance from their brands. Today, there are so many choices it’s a different kind of fight.” How can financial brands keep up? By changing the game. Financial marketers need to reach qualified people in meaningful ways at the most opportune moments. With the right digital marketing solution, they can manage the full financial lifecycle of each customer and balance privacy protection. With this approach, they’ll stop customer attrition, increase engagement and be a better financial partner to their customers over their lifetimes. This guide shows financial brands how to bring current and new customers through each stage of the lifecycle with a single, integrated approach. Marketers will see that focusing on the customer, not the brand, makes customers feel recognized, valued and appreciated for years. Acquire: Bring new customers to your financial institution. Grow: Increase stickiness over time through value-added services and upgrades. Cross-sell: Encourage adding relevant product categories to deepen relationships. Onboard: Make sure they start using the service—whether that means setting up direct deposit for their account or making their first purchase on a new credit card. Retain: Optimize your portfolio to stop customer leakage.
  4. 4. 4 INTRODUCTION It all starts with identity management—and privacy The average U.S. adult spends more than six hours a day on digital media. All these online interactions leave digital signals that marketers can use to understand people: their channel preferences, purchase habits, wants, needs, life events and more. With this deep customer knowledge, financial brands can create relevant, meaningful marketing for everyone they reach, and have consistent conversations across devices and channels. This is all achievable with identity management. How I connect What I watch What I browse Where I go Who I am What I buy
  5. 5. INTRODUCTION Identity management is all about knowing who customers are, recognizing them online for years, and tailoring the messages based on what they need and want. That way, the customer feels like the brand truly knows them—like every message is part of an ongoing conversation that grows over time, through every stage of the financial lifecycle. Without quality identity management, many brands resort to spray-and-pray marketing, using broad segments and minimal contextualizing for the individual. This strategy is ineffective and outdated. It wastes ad spend and creates negative perceptions in many ways: ɥɥ Promoting a financial product that’s irrelevant to the customer or prospect ɥɥ Featuring a financial product that someone already has ɥɥ Treating existing customers like new prospects ɥɥ Tailoring messages to the wrong person (e.g., a spouse) who shares the device ɥɥ Exposing someone to the same ad, over and over, across their devices ɥɥ Messaging someone after they’ve opted out of brand communications Brands, beware
  6. 6. 6 PAGES Operating within a privacy framework Many customers take privacy into consideration when choosing their financial provider because they understand the importance of having their privacy protected. This is especially true in this shifting privacy landscape. In order to make customers feel comfortable and ensure that you are truly complying with laws, a “Privacy by Design” program is crucial. A critical component of this is following the principle of data minimization, which means that you only collect the data that you need and retain that data only as long as you need it. In many cases, although it may take extra work, collecting and retaining data that directly identifies an individual is not necessary. As the privacy landscape continues to shift, it is important that financial brands make “Privacy by Design” a priority for both their internal compliance efforts and their vendor selection. Recent privacy laws such as the European General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) are quickly becoming the standard for privacy and data protection. Other states have already started to introduce or enact their own privacy laws, and there is serious discussion of an all-encompassing federal privacy law. The challenge for any brand will be to maintain a privacy- friendly environment without risking the quality of their identity management or sacrificing their ability to provide relevant, valuable solutions. In addition to that, high-quality identity management is necessary to understand where your data flows and maintain proper opt-out status of individuals. 6 INTRODUCTION
  7. 7. 7 INTRODUCTION Meet your customers Shannon, Mason and Rich are all at very different life stages and have different financial needs. But they all expect highly personalized marketing that speaks to each of them in the right moments. Shannon Mason Rich Shannon wants to upgrade from a condo to a house after securing a higher-paying job. Mason is a recent college grad who just landed his first job. Rich is looking forward to retirement and wants to leave a sizeable inheritance for his children.
  8. 8. 8 INTRODUCTION Shannon Mason Rich Card history Financial products with bank ɥɥ None ɥɥ Debit card ɥɥ Platinum credit card ɥɥ Mortgage Dominant categories Dominant categories ɥɥ Savings & checking ɥɥ Savings & checking ɥɥ Mortgages Devices Devices ɥɥ Android phone ɥɥ Chrome desktop and Android app ɥɥ iPhone ɥɥ Android tablet ɥɥ IE (desktop) Individual attributes Individual attributes ɥɥ Works in finance ɥɥ Frequent traveler ɥɥ Outdoor enthusiast ɥɥ Discount shopper ɥɥ Car enthusiast ɥɥ Family vacationer ɥɥ Business traveler ɥɥ Finance Co. > Credit cards ɥɥ Finance Co. > Insights > Wealth managementɥɥ Finance Co. > Savings & checking ɥɥ Homepage > Student banking ɥɥ App > Mobile check deposit ɥɥ Homepage > Savings & checking ɥɥ Borrowing > Mortgage refinancing Recent browsing Recent browsing Historical browsing Historical browsing Card history ɥɥ Basic debit card Dominant categories ɥɥ Credit cards ɥɥ Business Devices ɥɥ iPhone ɥɥ Apple iPad ɥɥ IE, Chrome Individual attributes ɥɥ City style ɥɥ Full-price shopper ɥɥ Works in marketing ɥɥ Finance Co. > Account options ɥɥ Banking & cards > Explore your options ɥɥ Earn bonus points Recent browsing Historical browsing Female, 34 | Single Income: $140K | Chicago, IL Privacy-protected ID: 4BD02913 Privacy-protected ID: 9PD04513 Privacy-protected ID: 1AD02879 Male, 22 | Single Income: $50K | Seattle, WA Male, 59 | Married, grown kids Income: $220K | Atlanta, GA
  9. 9. ACQUIRE: Engage with the right people Acquisition is all about getting high-value, in-market people in the door. As the number of providers and financial services continues to grow, financial brands have to know when people are hitting their next financial milestone, from opening their first account to saving for retirement.
  10. 10. 10 PAGES There are two keys to acquisition success: Find the right people to acquire (e.g., not just looking for the $500 bonus or free balance transfer). Have more useful and relevant communications with these people. Instead of offering incentives to a large audience of potential customers, identity management gives financial brands a holistic view of each person, including their online behavior and browsing history. This way, they’ll know when prospects are in-market for specific financial products. This generates high-quality leads and accounts by identifying new, high-value customers who are ready to start a lifetime relationship with a financial partner. 1 2 Source: BAI 24%of people are looking for a better omnichannel banking experience. But improving the omnichannel experience isn’t a top priority for banks. 10 ACQUIRE
  11. 11. 11 Mason is looking forward to traveling after his recent college graduation. He has a basic savings account but no credit card. He reads the news online and checks the weather on his Android phone every morning. His bank identifies him as a great prospect for a credit card with travel rewards. They deliver messaging that offers 2x travel points on purchases and an easy online application and management interface. These communications are consistently reinforced with emails, digital ads on his favorite news sites and pop-up ads in his weather app. Identity management in action Mason NOTE: It’s a best practice to use digital prescreening to avoid the biggest challenge in loan acquisitions: offering products that your prospects will qualify for. Identity management future-proofs your new customers by identifying the people who are likely to convert and adopt other products, resulting in increased stickiness and customer loyalty. ACQUIRE
  12. 12. 12 ACQUIRE under their CPA goal 19% more new card signups over KPI 29% incremental CPA 5% Real results A national private-label credit card (PLCC) issuer wanted to drive quality new accounts for their premium products through digital channels, but they weren’t meeting their goals with list retargeting. Working with Conversant and TransUnion, they created a scalable, accurate and transparent prescreen solution that combined real- time behavioral data with their own financial services knowledge. With this unique data source, they defined a credit-ready audience to message against their direct mail campaign. Generate new customer opportunities Competitive conquesting: Attract competitors’ accountholders and people establishing their first deposit accounts. Product spotlight: Market relevant tools such as financial advice, a mortgage or a car loan. New customers only: Suppress existing customers from irrelevant acquisition messages in a privacy- protected way.
  13. 13. 2 ONBOARD: Stop attrition Many banks struggle to onboard new customers, leading to high attrition rates. According to JD Power and Associates, new customers are nearly three times more likely to show attrition during the first 90 days of opening an account. Fixing this problem starts with acquiring the right customers in the first place.
  14. 14. According to The Financial Brand, customer satisfaction and cross-sell successes improve when customers are contacted 4–7 times in their first 90 days. The sooner and more comprehensive the follow-up, the sooner financial brands see an increase in revenue per customer, average balance growth and products adopted per customer. Reinforcing the onboarding process across multiple channels often leads to a 1.5–2x lift in results. With identity management, financial brands can reach recently acquired customers across all their devices and channels to encourage them to make a first deposit, activate their new card or set up auto-pay for their mortgage. 14 ONBOARD
  15. 15. 15 ONBOARD The bank’s efforts to connect with Mason worked. He applied for the cobranded travel card and was approved. It’s been a few weeks, and he hasn’t activated the card yet. The bank starts serving him ads with messaging to activate his new card and start earning points today. Consistently reaching him with relevant messaging in his preferred channels increases the likelihood of activation and creates stickiness over time. Identity management in action Digital services that offer convenience and stickiness: ɥɥ Bill pay from deposit accounts ɥɥ Anytime deposits ɥɥ Payroll, benefits, tax refund or rewards direct deposit ɥɥ Remote banking ɥɥ Mortgage and loan auto-pay ɥɥ Scheduled savings or investment contributions 2018 research from Epsilon-Conversant on personalization found: 80% of people are more likely to do business with a company that offers personalized experiences. are more likely to do business with a financial institution that offers personalized experiences. say personalization means customization and service for them. Source: Epsilon-Conversant, Power of me: More than a [firstname], 2018 89% 64% Mason
  16. 16. 16 ONBOARD Real results A national retailer wanted to increase their private-label credit card (PLCC) use and avoid attrition. 30% of cardholders often used tender other than their PLCC, so the goal was to deliver relevant offers to cardholders to get them to use their PLCC more frequently. Using identity-based marketing, Conversant helped the retailer find cardholders across channels, apps and devices and served them relevant offers, which significantly increased their transactions. in sales driven $6.5M purchases made 46K lift in spend and usage 5% ONBOARD
  17. 17. 3 GROW: Mature with each customer Offering valued-added services and upgrades, especially on digital channels, will continue to build customers’ relationships and improve their stickiness. In fact, BCG recently explained that “digitizing for value” is a key objective for financial brands. Using digital technologies, such as mobile apps, websites and interactive voice response, creates fundamentally better experiences for customers. Adding this value can “translate into an increase in each customer’s lifetime revenue potential through higher average sales per customer and a higher retention rate across the whole customer base.”
  18. 18. 18 GROW To stay relevant, brands need to have a holistic view of their customers’ interactions, and provide tailored offers that reflect their current life events and triggers, all while adhering to privacy guidelines. Traditional channels such as email and direct mail are still valuable, but should be coupled with digital media on the websites and apps each person visits most for a true omnichannel approach. Growing accounts across categories Deposits Increase deposits by showcasing the benefits of converting to premier accounts. Once a customer is in that segment, cross-sell additional premier opportunities. Spend Incentivize customers to spend more, and more often, on their credit card. Share personalized opportunities and rewards for maximizing points or gaining double rewards for specific purchases. Services Encourage customers to use offerings such as subscribing to SMS, mobile and online account management to keep their transactions simple and stress-free.
  19. 19. 19 GROW As a marketing executive, Shannon visits industry websites and reads a news app on her phone every morning. Her bank has mailed and emailed her an offer to upgrade to a premier account, but she hasn’t converted. The bank complements these owned tactics with relevant messaging on the sites and apps she visits most, reminding her of the upgrade benefits. Two weeks after she sees the digital advertising, Shannon converts to a premium account. The beauty of this approach is that it’s personalized to her individual preferences and behaviors. This mix of ad placements would be different for Mason and Rich, adapting to each of their online behaviors. Shannon Identity management in action Driving growth with relevance 29% 43% opens to each person’s preferred page stores financial activity history to reference later stores billing information and preferences reminds consumer of outstanding financial transactions that need to be completed Source: Epsilon-Conversant, Power of me: More than a [firstname], 2018 29% 43% 23% 32% From the financial institution’s website or mobile app: From the financial institution’s physical location: What customer experiences do financial institutions need to provide to make a difference? allows consumer to set up recurring financial transaction recommends financial products appropriate for consumer’s financial situation
  20. 20. 2020 GROW Real results A leading online bank wanted to generate approved student loan applications from parents and college-bound students during a short, three-month seasonal window. By matching their customer list to privacy-protected online profiles, Conversant helped the bank quickly find their desired audience and message those individuals, driving more efficiency and effectiveness than other channels. increased reach 82% under their CPA goal 72% approval rate 90%+
  21. 21. 4 CROSS-SELL: Develop deeper, longer-lasting connections According to PwC, customers who use just one product at a financial institution are less profitable than those who use multiple products, and they also tend to be less sticky. After acquiring, onboarding and growing each customer, it’s time to see what other solutions they need, depending on their life stage. To stay top-of-mind, financial brands need to know what’s relevant to each customer as their needs change. Weaving products in with their customers’ lives will help build a long-term relationship.
  22. 22. The cross-sell framework What are customers likely to want, based on the one product they already use? Data-driven digital relationships are the most logical path to cross- sell success. They help financial institutions break down marketing barriers across products to actually cross-sell solutions to existing customers. PwC found that traditional product-based acquisition strategies often lead to only a single-product relationship. PwC also found that digitally engaged customers are twice as likely to be multi-line customers than those primarily using offline service channels. In credit cards alone, they spend twice as much. Investments Mortgages Loans Credit cards Deposits credit cards loans mortgages investments deposits credit cards mortgages investments deposits investments home equity deposits balance transfer investments deposits credit cards loans mortgages 22 CROSS-SELL Current product Cross-sell potential Nurture multi-line, digitally engaged customers 2.5X Multiple-line-of-business customers generate 2.5x the amount of pretax income than their single-line counterparts. Digitally engaged customers are 2x more likely to be multi-line customers than offline ones. Multi-line customers spend 2x more on credit cards than single-line. Source: PwC 2X 2X
  23. 23. 23 CROSS-SELL Rich has been a loyal customer with his bank for years. As he approaches retirement, the bank wants to discuss longer-term financial planning with him through owned communication channels. But it’s a long decision-making process. The bank sends him digital marketing through the channels and apps he uses most, reminding him of the benefits of bringing his retirement savings to the same institution as his deposit and checking accounts. Soon after seeing the messages, Rich requests a meeting with the bank’s wealth management team to discuss bringing his retirement savings to the bank. Rich Identity management in action
  24. 24. 24 CROSS-SELL $125+ Real results One of the largest national banks wanted to cross-sell credit cards, but their typical methods for digital marketing fell short. They couldn’t identify a significant percentage of their highly approvable accountholders and reach them across channels and devices to hit an effective cost per acquisition (CPA) on a large scale. By connecting their customer file with privacy-protected online profiles and reaching these individuals on digital channels, Conversant helped the bank significantly grow their business. new accounts monthly 2,200 6x over monthly goal under their CPA goal
  25. 25. 5 RETAIN: Be a partner for life By acquiring the right high-value customers, onboarding them and growing them through relevant upsell and cross-sell offers, financial brands are well positioned to retain customers over time. Conversely, if brands acquire customers who are only looking for short-term incentives, or if they haven’t fully activated and engaged their customers from the start, they’re probably still seeing a lot of attrition. Financial institutions must continue to provide personalized value to each customer as their needs evolve. Done right, optimized lifecycle management can bring customers through to new products, and even re-engage and win back customers who have been lost over time.
  26. 26. 26 Lift customer engagement scores by 2–3X Reduce customer churn rates by 10–30% Lead to annual revenue uplifts of 10% According to the Digital Banking Report, effective personalization throughout the customer’s lifecycle can: RETAIN
  27. 27. 27 RETAIN Mason continues to need financial services throughout his life, such as financing for a car and condo, and saving for college and retirement. There are so many opportunities for the bank to be there for Mason during these life changes—anticipating and offering the solutions that make the most sense for him at each step. All of this increases brand engagement and prevents attrition. But it’s only possible with a deep understanding of each person’s brand interactions, plus years of non-brand interactions online and offline, all connecting back to a privacy-protected online profile. Identity management in action Mason
  28. 28. 28 RETAIN Real results A leading Fortune 100 financial services organization wanted to increase retention of accountholders by expanding their marketing beyond email and direct mail. Conversant helped the brand match their customer file to the online profiles of 200M+ people linked to unique IDs (with PII removed). They found 89% of their customers online and served them personalized digital ads across channels and devices. contribution growth $72M+ return on ad spend $168:1
  29. 29. 29 RECOMMENDATIONS Ensure privacy and compliance. Keeping digital marketing initiatives free of PII ensures that information remains protected in all instances. 1 2 4 63 5 Understand customers as a segment of one. Segmented messaging becomes one-size-fits- none when segments are too big. Knowing and understanding each customer as an individual allows financial brands to deliver relevant messages during key decision-making moments. Use customer data to strengthen connections and establish new ones. You can reach new and existing customers, but what else do you know about them? Complement customer data with known online activity and devices for a more complete picture of each customer. Personalize the customer lifecycle. With the right data, you’ll know when customers’ needs change, and you’ll deliver relevant messages about the next financial product they’re ready for. Ensure efficient marketing spend. Delivering the right messages requires an always-on approach that can only be achieved with machine learning that optimizes every interaction in real time. Measure, optimize and measure again. Predetermined seasonality and product pushes don’t take the individual into account. Financial marketers need to adopt a plan that is fluid and flexible, adjusting messaging to each customer’s wants and needs. *Repeat steps 2–6 for continuous improvement. Recommendations The path forward: Managing across customers’ financial lifecycles If financial brands want to deliver more relevant marketing, they need to use identity management to get a deep understanding of each customer.
  30. 30. 30 RECOMMENDATIONS Real results A Fortune 500 insurance company wanted to drive a niche business line by reaching qualified, new leads, but their previous digital attempts resulted in low reach and high cost per lead. They matched their customer list to Conversant’s online profiles, allowing them to model their policyholders to find ideal prospects. Then they reached these new, in-market leads across devices, while suppressing current policyholders. They achieved scale and accuracy across locations—driving efficiency and performance. below cost-per-lead benchmark from previous partner 95% of leads requested policy coverage 40% unique, qualified prospects received messages 2.2M+
  31. 31. 31 CONCLUSION Conclusion Meeting customer expectations—set by industry disruptors and platform providers such as Amazon, Facebook and Google—is made even more difficult by increasing regulations and privacy concerns. To grow profits, financial brands need to think differently and evolve with customer demands. How to compete in a changing market: Focus on each customer as an individual. Strive for an omnipresent marketing strategy across channels and devices. Personalize every interaction to deepen and extend relationships over time. Expand digital marketing beyond the typical spray-and-pray approach to have direct, one-to-one conversations with people, everywhere they are online. This approach is an evolution of traditional customer relationship management, pulling together CRM data (email, direct mail), online behavioral data (cookies, device IDs) and transactions (online and offline) to build a complete, holistic view of each customer. This integration of data insights provides a full view of each customer and helps to better serve them throughout their lifecycle: acquire, onboard, grow, cross-sell and retain. It’s time to get started. Shannon, Mason and Rich will thank you for it—with their lifelong business and loyalty. “CMOs want a deeper understanding of their customers and the ability to reach them at moments of interest, across channels and devices, with personalized communications. Delivering real-time personalized communications requires powerful solutions that activate insights by fusing data, technology and creative.” – Wayne Townsend, President, Epsilon, from MarTech Series 1 2 3 4
  32. 32. How Epsilon-Conversant can help At Epsilon-Conversant, we empower brands to place humans at the center of their marketing. Our technology and data-driven insights help brands make every customer interaction more personal and purposeful to devel- op relationships that actually mean something. Using our connected suite of products and services across leading-edge identity management and in- dustrial-strength data and technology expertise, we help brands eliminate irrelevant, confusing or unwanted customer experiences and build human connections that drive exceptional business outcomes. Visit our financial services page to learn more. Ready to create real connections with your customers? Contact us today. For media and press inquiries, please contact This document is intended solely for distribution by Conversant, Epsilon and their affiliated companies. Do not copy, distribute or otherwise share. © 2019 Conversant LLC and Epsilon Management, LLC. All rights reserved. Epsilon-Conversant™, Epsilon® and Conversant® are trademarks of Epsilon Data Systems, LLC or its affiliated companies.