I hold the following to be fundamental truths:
- Customer engagement – repeated and satisfying interactions that strengthen the emotional connection a consumer has with a brand (or product, or company) — is a necessary path to establishing customer loyalty and strong customer relationships.
- PFM will evolve to become a platform for customer engagement for banks and credit unions.
Given these opinions, how could I not love a site called Engagement Banking, recently launched by SapientNitro, Geezeo, and Brett King?
Officially titled “Banking on the Future: A New Era of Engagement Banking,” there’s a ton of great content — not just text, but video and graphics, as well — on the site. Because of the way the site is designed, I can’t link directly to any single piece, but three of my favorite sections included:
- Building a better dashboard
- Close encounters of the banking kind
- I think, therefore I twitter
[Side note: Ironically, the last sentence is not symmetrical. There a lot of people who twitter, but who clearly don't think]
As much as I love the site, I do have a nit to pick. The following 2×2 graphic is taken from the site:
I doubt there’s anybody who loves 2×2 graphics more than I do, and if I were designing one, I’d put my idea in the upper right hand corner, as well. But here’s my problem:
Convenience banking, transactional banking, and relationship banking are not inferior to engagement banking. They’re a part of engagement banking.
Engagement banking is — or should be — about improving convenience, transactional effectiveness, and relationship building. In fact, the ability to deliver on convenience is directly related to a firm’s ability to scale cost-effectively.
My little nit hardly impacts the overall value that people will get out of this site. But I would encourage SapientNitro, Geezeo, and Brett to rethink this chart. Their ability to communicate a new concept (engagement banking) — and get it to stick — will depend on how well people in the industry can distinguish the new idea from what came before it. As it stands, I think they’ve created an artificial distinction between four labels.
Your post sparked another thought.
I would say that engagement banking as you define is the bank’s brand.
Brand marketing should reflect the brand rather than attempt to create it.
In other words, the customer experience defines the brand for the customer. Advertising can only support the customer experience as it really is.
If the message is the client’s wish rather than a reflection of the company’s true brand, then it causes dissonance. If this happens, advertising actually serves to weaken the brand.
Some clients give the whole of advertising far more credit than it deserves.
Clients’ expectations of what branding advertising does or can do sometimes far exceeds reality.
Ted: Thanks for the comment. Good to hear from you. I think we agree, but I define the role of advertising a little differently: It creates an expectation. And as you said, if the expectation isn’t met, then dissonance occurs. But there are still a lot of marketers out there clinging to the belief that advertising can establish the brand perception.
I agree if the expectation is not too far afield.
Company’s should always reach for improvement in the message, but not exaggerate to the point that it causes dissonance and even customer resistance.
Ron,
I agree with you whole heartedly about “the following to be fundamental truths” you listed above. I also love SapientNitro, Geezeo, and Brett King’s new website “Banking on the Future: A New Era of Engagement Banking.”
I discovered my first nit pick when I was watching my first video on their site. The one with the picture of Frank Capra’s Wonderful Life (on the History of the Branch page). While Alex from SapientNitro was speaking, I noticed that the book shelf did not have a copy or two of Brett King’s wonderful Bank 2.0 book. It should have been there.
As far as the chart you reference, I have an issue with the last bullet: Phasing out direct mail. Brett and I have tussled a bit about this (via Twitter’s DM feature). Segmented direct mail still works. In fact, it will always work. As companies get better collecting (and getting the ok to use) e-mail addresses, social media addresses (names), cell phone numbers (for SMS/MMS), etc., they will be able to communicate (i.e. engage) with their customers using the customer’s preferred channel.
My other nit pick is this. Since the dawn of the internet, many new channels to communicate with our customers have been created. Peoples habits have changed, but a lot of the old channels still exist and will be used for years and decades to come. I have a great financial services example from the real world to share. I recently had a private tour of Yankee Stadium. The place was loaded with state of the art digital scoreboards and there were flat screen TV’s everywhere. With all the high tech newness there was still the old fashioned seat cushion – http://dmgerbino.smugmug.com/photos/992352511_8Gcb3-Th.jpg
Simple, uncluttered, and I bet the sole reason why this Financial Services firm is among the largest today
Disclaimer: As a vendor, I worked with this firm on a half a dozen mergers.
All kidding aside, kudos to Team SapientNitro, Team Geezeo and Team Brett King. Along with Brett’s book, I have high hopes that this site will help Community Bankers everywhere narrow “the ‘client experience gap’ that divide between customers’ retail banking needs and technology experiences and today’s retail banking client engagement model ”
@dmgerbino
DG,
I’m willing to be proven wrong on direct mail, actually I think my observation is more that broadcast campaigns will largely become ineffectual and that targeted methods will rule the day – thus if properly targeted in micro segments DM could remain viable. It is just the current broadcast approach to DM is doomed to failure.
The point you make regarding channel mix is a good one. Just because email was invented didn’t mean snail mail disappeared, the same for cameras versus paintings, and planes versus ships. Sometime it just adds to the complexity.
Regards,
Brett King,
Author – BANK 2.0
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I not only agree with your comment around the lack of supremacy of one quadrant opposed to the others but also question whether ‘convenience banking’ can’t be scaleable/intimate or that DM should be phased out (not surprising). In fact, direct mail, if done correctly, can enhance engagement and is scaleable. I also believe that transactional banking, if done well, can be intimate from the client’s perspective. For example, add a higher level of PFM and alerts to my PNC Virtual Wallet account and it becomes both engaging AND intimate.
Bottom line, I don’t think the quadrants are mutually exclusive or necessarily correctly defined. And some of my clients can attest to the financial, engagement and intimacy impact of direct mail in conjunction with phone, email and social media.
I can’t agree with all of you regarding the site. While it’s different, I find it too cluttered, too much work to navigate and too confusing. That aside, I love the term engagement banking. Fantastic- although I would argue with the quadrants and how they are defined. When we talk about relationship we are talking engagement- impossible to have relationship without it. And I agree with others who say that engagement comprises elements of all the quadrants. Everyone is after share of wallet which comprises all of the elements- transactional included.
The key piece is customer engagement- in whatever form it takes. That is everybody’s goal. There are a myriad of ways to do that. And sometimes, all the customer wants is a transaction. I don’t want engagement every time I bank. Sometimes I just want my money
I think one of the things that seems to get confused with the term “engagement banking” is “selling something”. Whenever I talk to bankers or other financial services staff, they sort of miss the point of engagement when the argument comes up that “people don’t always want to be engaged”.
I would agree that people don’t always want to be told about an Auto loan, or a new CD rate, or an updated mortgage product. I can understand that sentiment. But the point of this new engagement banking push is letting your customers know your bank is an advocate for your finances. Providing tools that the customers can choose to use, meeting the user where they want to communicate (wether over email, SMS, phone, etc), or making innovative choices on how your branches can use customer data to provide the best possible services to them.
We’re all still figuring out what exactly “engagement banking” is. But the point is that engagement isn’t sales (necessarily). Its finding unique ways to show your advocacy for your customers finances and then the next nature step is for that customer to turn to you when they need a product you could offer.
Ron and I have had several conversations around the fact that a customer can be sold but not engaged (dormant or low activity checking, CD, online banking with no visits, reward sign up with no redemptions). And I agree that an engaged customer is one that values what you provide and shows this through use. As Ron said a week or so ago about onboarding; it’s not about selling the next product or service or meeting a quota. It’s about solving a customer’s financial need which they will reward through use and loyalty.
Love all the feedback on the whitepaper. It was great to be part of such an innovative endeavor.
Ron, great point you brought up regarding the 2×2 you referenced. There is a MUCH better 2×2 you should check out. Select the “Changing Role of the Branch” you will see the same four quadrants, but instead of defining the quadrants (engagement banking, relationship banking, etc) you will see the functions customers are looking for in each quandrant (open account, check balance, etc). Additionally, there are check boxes below representing different channels (online, mobile, branch, call center, etc) – check a box and see what functions should be handled by each channels. I “think” this is what you were hoping for… Would love to hear your feedback after checking this slide out.
Jim and Kyle: I agree that people don’t want to be sold stuff- but when I think about engagement, it means involvement. And sometimes I don’t want to be involved. So who is the engagement about- and for? Usually for the bank’s benefit. I believe in engagement but i also believe that the emphasis on engagement is like somebody who is trying too hard to be liked. I work with clients on the engagement piece but I also find myself stepping back and thinking like a customer. Engagement has to be moderate with really listening to the customer- and sometimes they don’t want to be tracked, analyzed, and followed. They don’t want their needs anticipated nor do they want their banks to do their thinking for them. Sometimes they just want their money from the ATM- nothing more and nothing less.
So, I think there is a stratfication that needs to happen. There are points of engagement and points of transaction. The key is to know when to respond to which. Ever been in a store where the sales person is trying to engage you- and you just want to browse in silence? They are trying too hard- trying to anticipate your needs. What is your reaction? You run screaming out of there- leave me alone!
Deborah -
Sure, but I still think you’re talking from the perspective of a branch employee or branch manager saying, “I noticed you have 20k in your checking, have you considered investing/CD/etc?” The hard sell isn’t engagement as much as it is flogging.
What I’m saying about engagement banking is providing the tools/information that makes the customers loyal to your bank (maybe without the customer even knowing it). For example, if your customer goes to the ATM in your example and every single time they go in, they request $100 from their checking account, that should be a simple transaction/quick button. Granted, I’m not naive to think that all banks and credit unions have the ability to make changes at that level. But its through great partnerships with vendors that can help the banks and credit unions forward with the engagement technique.
Another great example I think of engagement banking is allowing customers to text your bank. Not for balance information, but merely to ask questions. Its similar to email but different than a phone call. But you create a connection with that consumer knowing that, if they are at a dealership, they can text you a question about auto loan rates.
Its necessarily about having information to sell to the consumer at POS as much as its providing avenues for the consumer to ensure that they have a partner.
Of course, not all customers are going to want to be “engaged” like you said either through these new methods or traditional sales. But I think whats happening is as the Gen Y group comes through and jumps from institution to institution, engagement banking will play a key tool in the toolbox of banking retention and lead generation.
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Ron I agree with the way you have encapsulated the banking experience from both perspectives. Customer relationships in general have evolved and too many FI’s have been slow to keep or (gasp) stay ahead of the pace. What strikes me about your post is offering a spectrum of choices for the client and letting them define the way they would like to interact with their institution.
Those in retail who do not at least keep pace will fall by the wayside especially given the healing that’s taking place from the mortgage mess and poor risk management. There is a lot of potential for marketing and servicing the individuals but the formula does not seem to have been executed properly. It’s a moving target anyways so the FI that can be nimble will stay on top (for the moment). Cheers.
Joe