Building Loyalty through Customer Centricity
You’ve been banking with the same institution for a decade or more, but they do nothing to acknowledge your loyalty. Dealing with them has become a hassle, and lately you’re directed to a different person for each type of banking product. It’s a frustrating experience and makes you wonder, why do you stay with them—is customer loyalty in banking even worth it?
Retail bank customers are asking themselves this very question. Switching banks used to be a bigger decision either because the relationship held more weight, or it was generally more difficult to move assets. Regardless of industry, customers expect a seamless, personalized experience across every channel—in-person, voice, mobile, and digital. Banks are no exception. If your customer engagement strategy isn’t evolving to meet customers’ demands, they’ll take their business elsewhere.
Current state orientation for most banking organizations—digital and brick-and-mortar—is around products (credit cards, checking/savings, loans, etc.). Each product team operates independently within the organization, only looking at the customers it supports within the silo of that product space. These blinders enable product teams to focus on maximizing their small piece of the pie, regardless of whether that makes sense within the larger context of optimizing customer value overall. If the product reigns supreme, then by default the relationship is secondary.
Although typical of the industry, it makes interacting with customers in a more meaningful and personalized way nearly impossible. Brands across other industries have started to create deeper emotional connections with their customers, connecting data across the entire lifecycle and journey to generate more insights. However, the banking industry has struggled to shift from this product focus to a customer focus.
Customers don’t just compare you to your competitors. They compare you to their favorite brands across industries, which sets the bar even higher.
Today, banks are facing added pressure from other industries successfully driving customer loyalty and increasing competition from non-traditional players like fintech startups and digital banks that are disrupting the industry with innovative products and services. Because these disruptors operate more like agile tech companies than a traditional bank, they already have the modern infrastructure and business models to support a customer-centric approach. These players stand to lure away your existing customers—especially younger generations just entering the market—with unique benefits and a more convenient, holistic experience.
Convenience has become a table stake in the race for customer primacy. Banks must be able to provide customers with choice in their experience (mobile, digital self-service, and human support) while ensuring all channels are integrated for an omnichannel experience.
This industry is at a crossroads. You can no longer afford the critical risk of inaction—it means losing customers and deposit share.
It’s time for banks to move their focus from pushing products to deepening customer relationships to achieve customer loyalty in banking.
The Race to Customer Primacy—It’s a Marathon
Reorienting around your customers to engage with them in a meaningful way is paramount to gaining their trust and retaining their business in today’s economic climate. Banking customers select financial products based on their needs and market opportunities, unencumbered by an emotional attachment to the bank they have historically done business with.
In these market conditions, banks can’t afford to ignore the organizational alignment issues lingering from legacy systems, processes, and infrastructures. However, you can’t begin to transform your organization without a bigger long-term vision guiding and uniting your teams. The hard truth is banks must shift from product-focused, short-term goals to a grander vision and strategy. One that integrates all products and services together with the unified goal of securing the largest share of each customer’s overall banking relationship. It requires organizational transformation and the realignment of profit centers, but the payoff is monumental and will position your bank to maximize customer lifetime value (LTV).
So, how do banks even begin this effort? Start by changing the conversation internally from perpetually chasing tomorrow’s profit (short-term survival mode) to generating greater long-term value (long-term growth mode). Move away from pushing single-product profits to increasing customer LTV across the end-to-end journey.
By prioritizing human-centered design and customer continuity, you’re placing the desires and behaviors of your customers at the forefront to create experiences and offer products or services that are relevant and meaningful. This gives customers the sense that your brand knows them, engages them the way they want to be engaged, and ultimately secures their trust, strengthening the relationship.
Understanding the end-to-end journey perspective of your customers is just the first step. From there, it’s critical to leverage those insights to change the way you interact with your customers. Rather than handling each interaction independently, develop a holistic, omnichannel engagement model to allow customers to switch seamlessly between channels and experience consistent, personalized interactions.
Align Around the Customer—Leverage Your Data
To overcome customers switching banks and work towards customer primacy, you need to interact and communicate with your customers differently. If you were to truly understand your customers and leverage everything you know about them, it would enable you to talk to them in a uniquely personalized way.
The lack of data integration across products is one of the biggest challenges banks face. Think about how much customer information you already have or could potentially have. If you were to connect that knowledge across every product line, channel, and touchpoint in a data lake, you would open doors for communicating in a way that resonates with your customers more deeply. This includes knowing what stage of life they are in, their purchase history, and the types of offers that they respond to.
Aggregating data allows you to use predictive and prescriptive analytics to create customer strategies to better equip every product team to customize messaging and interactions at each touchpoint (whether it is a contact center call or an email marketing campaign). A data-driven approach enables you to show customers that you value their business and care about helping them achieve financial wellbeing—whatever that may mean to them.
Many banks fail to recognize their own customers’ tenure with them, which is a huge, missed opportunity. Something as seemingly frivolous as identifying a member’s tenure with your bank on their credit card or on their account page sends a powerful message that you notice and care they have chosen to stay with you.
Ultimately, understanding and aligning around your customers—rather than products—while using data, analytics, and insights will enable you to segment and personalize customer experiences. This understanding will give you insights into the different behaviors resulting in customer value, which can improve bank profitability through more targeted strategies aimed at allocating resources where they yield the best ROI.
Yes, this is a massive strategic shift and quite different than the current state for most retail banks. But the brands customers are most loyal to can likely be linked to a deeper relationship developed with that brand over time and across touchpoints, rather than a single product they offer.
The same is true for banks looking to deepen their financial relationship with existing customers and establish a strong foundation for new ones.
Think this isn’t possible because of your current tech stack?
Many organizations think if they change one piece of technology, they’ll have to change it all. And without the budget or buy-in to do this, it’s easy to feel stuck. Today, legacy tech stacks can be modernized through data integration, enabling communication and data management between disparate applications and integrating the ecosystem with APIs to bridge any gaps.
Technology is changing so rapidly that there are new ways to integrate and connect systems together and leverage legacy systems under a modernized architecture that were not available as recently as five years ago. There are massive opportunities to leverage technology to modernize CX and overcome perceived barriers.
CASE STUDY: Reimagining Banking CX through Feedback Insights
One of the largest national retail banks wanted to better understand its customers at every touchpoint and simultaneously use those insights to drive action. Our client was using outdated technology and had no way to analyze data—the bank lacked insight into CX breakpoints as well as customer feedback across various touchpoints.
To close the customer feedback loop and harness these critical insights, we deployed ConcentrixCX—our proprietary enterprise feedback management platform—across 16 unique touchpoints. With millions of customer signals all flowing into a single source of truth, the bank could now see feedback in real time across all customer interactions. This enabled our client to use feedback insights to drive strategic decisions, guide teller behaviors, and inform customer recovery initiatives.
As a result, the client saw a 20% increase in customer loyalty within 12 months, and over 15,000 bank staff adopted the new customer feedback platform.
Change the Way You Do Business—Incentivize and Equip Accordingly
Once you make the decision to interact with your customers differently and cater to their needs, this change needs to be applied across the entire organization, from contact center to in-branch bankers to the technology team.
Incentivizing in-branch bankers to look at what’s best for the customer long term, rather than pushing a specific product to meet their individual, short-term sales goals is one example of how this comes to life. By changing how bankers’ objectives are gauged and what they’re rewarded for, you can begin to make this kind of strategic organizational transformation.
Additionally, contact centers should be equipped with the tools and training to provide more personalized customer care such as:
- Proper virtual assistant and routing tools to ensure the highest-value customers go to the best advisors.
- The right advisor training and tools to ensure they can talk to each individual customer with full awareness of their relationship with the bank, and what the most relevant next best actions should be.
- Greater advisor empowerment and flexibility to engage with high-value customers in ways that further brand trust.
No, you can’t give the same level of attention to every customer. But by identifying high-value customers and demonstrating that you care about their overall financial wellbeing more than selling a single product, you create “stickiness” in the relationship that will lead to future growth.
Shift Your Focus from Products to Customers
To respond to current market challenges and win the race to customer primacy, banks need to focus on overcoming organizational alignment issues to reorient the business around the customer. By establishing trusted, meaningful relationships and providing exceptional experiences and service, you’re better positioned to grow your existing customer base and gain customer loyalty in banking. In the end, enabling customers to meet their needs and cater to their interests while staying within your bank can increase customer lifetime value, decrease attrition, improve engagement, and result in overall customer portfolio profitability.
Success will require some thoughtful organizational change dependent on leadership buy-in, cross-functional collaboration, employee empowerment, and a desire to break down internal barriers. But by fostering a customer-centric culture and shifting to a mindset of continuous learning and improvement, retail banks are well-positioned to overcome traditional challenges in achieving customer primacy and developing deeper, long-lasting customer relationships.
Ready to make the shift from a product-focused to a customer-focused organization? We can’t wait to help you transform your CX from the inside out and future-proof your enterprise. Our combination of industry specialists, design strategists, experience designers, and digital engineers will work with you and your team to reimagine your business operations with customer centricity at the forefront, ensuring you provide personalized, omnichannel experiences in a secure environment. Let’s connect and discuss how we can modernize your banking operations, increase customer retention and profitability, and improve your CX.
1 “What Would It Take To Get You To Change Banks? (You are Probably Lying),” Ron Shevlin, Forbes, September 1, 2022.
Stephanie Cohen
Sr. Principal, Integrated Loyalty Solutions