Key points:
In the not-so-distant past, the lion’s share of customer engagement happened in local branches, where consumers and businesses would receive one-to-one support from staff. These face-to-face interactions represented opportunities for banking staff to promote products, develop long-lasting relationships, and provide account opening application support to mitigate the risk of application abandonment.
But as the world of banking becomes increasingly digital, the opportunities to nurture customer engagement are becoming more diverse and customer preferences are broadening to include digital as well as in-branch experiences. This leaves many community FIs wondering how to replicate their customer engagement efforts in digital environments.
The answer is a customer engagement module.
This article will address the challenges associated with promoting customer engagement on digital channels and explain how a customer engagement module with the right features can help you overcome them.
Customer engagement refers to the emotional connection, and relationship, between a brand and its customers. According to Gallup, customers who are fully engaged with a brand represent a 23 percent premium over the average customer in terms of revenue, profitability, and relationship growth.
There are many ways to build customer engagement, including creating great customer experiences, focusing on retention and cross-selling, and nurturing relationships.
It is well-documented that consumers and businesses want access to more banking options. Research from the Qualtrics XM Institute found that, given the challenges of the COVID-19 pandemic, the vast majority of consumers indicate that they plan to continue to engage remotely with their financial institutions.
The 2021 Banking Impact Report found that 48 percent of consumers and 50 percent of small business owners (SBOs) are likely to open an account at a community bank or credit union in the next 12 months and that more than half expect online account opening.
Digital represents a new way to connect with customers, which requires that FIs embrace new methods of nurturing customer engagement. If community FIs hope to meet demand for digital in the coming years, they must take action to ensure that customer engagement continues to thrive in a digital context.
As digital becomes more popular, particularly among younger demographics and higher-earning SBOs, banks and credit unions are faced with three challenges to preserving and building on their customers’ engagement.
Customer experiences that happen in local branches typically allow for cross-selling efforts. In an in-branch context, customers will visit periodically to withdraw cash, deposit checks, and perform various other banking activities. Each visit is an opportunity for banking staff to build on the relationship and offer additional services or products.
Many banks and credit unions have considerable success with their in-branch cross-selling efforts. But community FIs that are attempting to stay competitive by embracing digital often struggle to market additional products in digital contexts where they don’t see or speak to the customers directly.
Customer engagement modules often feature digital cross-selling capabilities that enable you to create email campaigns to market additional services and products to existing customers. Cross-selling engines allow banks and credit unions to send their customers through a welcome series, drip campaign, or engage them in other forms of email marketing. For example, a bank could segment out their most valuable customers and target them with unique offers, like a platinum account.
Cross-selling capabilities empower you to migrate your in-branch cross-selling efforts into the digital world, so you can make connections with customers in their own homes. A sophisticated cross-selling engine will be able to facilitate segmented communications, enabling you to promote products that aren’t available to every customer.
In local branches, bank staff are able to provide direct, one-to-one support throughout the application process. This mitigates the risk of application abandonment, which is significantly more likely to occur in a digital environment.
To access support during an online application, customers may need to book a call or visit a local branch—both of which represent an obstacle to an individual who has chosen an online account opening method for its convenience and speed.
Customer engagement modules that include remarketing functionality enable banks and credit unions to overcome this challenge.
High application conversion rates play a critical role in determining the level of success that can be achieved by banks and credit unions. Compared to a low-performing solution, a high-performing solution can generate 3.5x as many accounts and up to 200x as much in deposits.
But what makes a high-performing solution? Our ROI of Online Account Opening white paper identifies a 35 percent conversion rate as the benchmark for a high-performing solution.
Remarketing is essential to minimizing abandoned applications and increasing conversion rates. Customer engagement modules with a remarketing system enable banks and credit unions to automatically send an email to potential customers reminding them to complete their applications. This simple step is responsible for a 6 percent boost in conversion, on average.
A remarketing system also enables banks and credit unions to replicate the “e-commerce experience.” For example, abandoning your cart on an e-commerce website like Amazon would trigger remarketing emails that customers have come to expect and even value.
Two federal laws—the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA)—require that FIs provide consumers and businesses with notice of the reasons their application was denied.
Given that many banks and credit unions see thousands of applications every month, sending the necessary adverse action notices when their application is denied can be time-consuming and resource-intensive.
An adverse action notice program automates the process of sending adverse action notices to inform consumers and businesses of the reasons their application was denied.
Customer engagement modules that include an adverse action notice program allow you to send notices customized to the reason for application denial—whether a generic, TeleCheck, or Equifax denial.
Regulatory and compliance burden is weighing heavily on banks, particularly as the industry becomes increasingly digital, which introduces new compliance challenges. An adverse action notice program can lighten this load without jeopardizing compliance and represents real, measurable value for community FIs in cost and time savings.
The customer engagement module is a key part of the MANTL platform and was designed specifically to address the challenges outlined in this article. It includes a powerful cross-selling engine, a remarketing automation system that minimizes application abandonment, and an adverse action notice program that relieves compliance and regulatory burden.
The MANTL customer engagement module empowers FIs to deliver the best customer experience, while also automating as much of the account opening process as possible.
To maintain and nurture customer engagement while providing superb digital experiences, banks and credit unions must alleviate each of the challenges outlined in this article. Doing so will allow them to meet digital demand while safeguarding their retention, customer satisfaction, efficiency, and employee satisfaction.
Put simply, in an increasingly digital industry, overcoming these challenges is no longer optional. It’s a necessity.
Have questions about the MANTL customer engagement module? Reach out to our team to schedule a demo.
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