Integrating data insight from all channels to develop a 360-degree perspective of customers’ preferences is vital to personalising service. Multichannel marketing knows this well, and as the digital age evolves, consumers expect continual cross-touchpoint recognition from organisations: banking is no exception.
Historically, physical bank branches were the main touchpoints for customer understanding; important flagship hubs for contact, cross-selling, and retention. As a result, until recently, people were used to solely offline banking. The reassuring presence of a local branch still fosters trust in uncertain financial times, and should not be ignored, even if digital and other channels offer efficient alternatives.
Knowing this, banks must increasingly evaluate their branch/other touchpoint ratio against customer expectations. This is a natural course of business, and with 40% of UK branches having been closed since 1989, it would appear that branch power has diminished, or at least reduced in value. But the situation is not as straightforward as it seems. Does this approach truly reflect customers’ preferences?
Understand your customers to understand your business. Insight across all channels.
As touchpoints evolve they must continue to form part of an integrated and positive consumer experience. Businesses know that understanding customers is vital to optimising consumer journeys and producing successful communications.
But it is dangerous to assume too much when it comes to client preferences. Only through analysis and data insight can customers’ true habits – and the best focus for channel adaptation – be uncovered. Banks, like any business, must acknowledge that different customers want to communicate via different channels, for varying reasons. So what does the data say banking consumers want? Is a shifting focus away from branches the best option?
Is the branch still important?
Looking to its financial specific clients, in a survey of 130,000 respondents, data company Acxiom found that over three-quarters of people (77%) believed it was still very important to have a local branch.
But that doesn’t automatically confirm the branch as the best option. Only with a clear understanding of consumers as individuals, can the true value of the branch be analysed. Channel preference is related to numerous factors, from age, to digital competence, to affluence, geographic location, and even occupation – different demographics prefer to bank in different ways:
Examining age, four in ten under 30’s think local branches are of little or no importance but only one in ten over 65’s agree. This may not be surprising as younger generations are more likely to be technologically savvy and use online banking.
Referencing the importance of geography, London based consumers are least likely to view high-street branch availability as important. Three quarters of London respondents banked online. The remainder preferred the phone. However change the region and change the preferences: Welsh residents were much more likely to view face-to-face in-branch interaction as important.
The more affluent the consumer, the lower the preference for high street access. High earners for example (over £150,000pa) do not view branches as important as those earning £20,000 or less. Ironically, those less likely to be the most profitable for a bank, are those who prefer the most expensive channel.
Occupation also influences channel use and preferences. 81% of manual workers for example prefer to bank in branch, so online or telephone communications are less likely to appeal.
Using demographic understanding to future advantage
Whether a result of lifetime habit, geographic ease or otherwise, data tells us that high street access is still viewed as the most important channel by an average of all ages and occupations.
As time progresses and channels such as mobile become more common, branch value may diminish. But branches are unlikely to die a death. Face-to-face interaction will always be relevant, and should form a considered, integrated part of the marketing mix. After all, a physical conversation about your personal finances with a local bank manager can be perceived as more positive than interactions with computers, mobiles, or disembodied switchboards. It is perhaps for this reason that so 77% still say they valued access to a branch; it is not too much of an assumption to make, to suppose that the branch comes into its own, for the most important banking interactions, such as a new mortgage, loan or financial planning.
Integrated, informed insight from all online and offline touchpoints, empowered partners, plus third party data, is the route to comprehensive customer understanding, enhanced upselling, loyalty, accurate communications, and importantly: trust. Use data to truly understand consumers, their preferences, and why they have those preferences, and you will uncover the best ways to progress as a business: bank or otherwise.
Information courtesy of Acxiom UK
