Customer Loyalty: How Technology is Changing the Playing Field
Banks can take advatage of emerging trends by unbundling products to give customers more choices.
Technology has upended the traditional customer engagement model for businesses at an unprecedented pace, leaving some companies in the dust. In order to understand the relationship between customer loyalty and technology better, we need to grasp the economic reality of our globalized community. Even though the global economy is becoming increasingly interconnected through communication technology, customers maintain their traditional sense of value when making purchasing decisions. That value does not often translate through a website or mobile phone. Faced with this dilemma, financial institutions and other businesses find themselves at an important paradigm shift between the next wave of technology and a new era of customer engagement.
We all know that the 24/7 digital age is alive and well. That’s old news. The next phase under way is the integration/amalgamation of social media, mobile, and data analytics. The opportunity exists for all organizations, specifically in the banking sector, to redefine how they interact with customers through digital engagement.
The numbers tell the story for us. According to a recent Goldman Sachs analyst report, almost 30 million connected devices are expected by 2020. This poses a tantalizing opportunity for companies, because now we are poised to understand customers in ways never before imagined. These connected devices are gathering data every second of the day, from the cars we drive to the clothing we wear.
We are seeing smart organizations, such as Domino’s Pizza Enterprises in Australia, already capturing this trend by augmenting this data with real human experience. The Australian teams developed and implemented Pizza Mogul, a me-tailing application that encourages customers to design and promote their own pizzas. Customers in Australia can now choose from 1.4 million different variations to create a pizza that they can then name, promote via their social networks, and receive between 25 cents and AU$3.50 per pizza sold as a reward.
This is just one example of how companies can empower their customers to take control of their experience, fostering interaction with the brand in ways never before possible. By utilizing mobile, they are engaging by personalizing the customer experience. The interconnection of data and everyday life creates a rare opportunity for organizations to reshape the lives of customers in a positive way.
As financial organizations continue to evolve around how they engage with customers, they are undergoing a massive shift in leveraging the role technology plays in building customer loyalty. In the retail banking sector, it had been tradition to bundle products. In other words, when customers walked into a bank, they were offered a package option based on known income and status. That is the old way. Today’s financial leaders are looking at ways to unbundle their customer services through technology. By unbundling service offerings with the help of data analytics, financial companies can understand customer buying patterns, creating the forum for a customized and creative customer engagement package.
One of the big issues around the growing importance of technology is, of course, transparency. As a direct consequence of the paradigm shift in business technology, customers are empowered with a wealth of access and knowledge about bank fees, hidden costs, and competitors. This has forced financial institutions to re-examine customer targeting and how they promote their service offerings. Every day, banks and other institutions are examining new ways to target customers. Customer loyalty programs such as travel miles and cash back are not created by chance. The programs are fueled by an increased understanding of what motivates customers and what can maintain loyalty.
If your bank or financial services company has not taken a long look at its customer engagement strategy in recent months, it does not realize the race has started, and it is still at the starting line. Technology is upending preconceived notions about customer loyalty every day. The winners in this race will be the ones that unbundle their services to create a unique experience for every single customer who clicks on their website or walks through their doors.
Original post: http://www.banktech.com/channels/customer-loyalty-how-technology-is-changing-the-playing-field/a/d-id/1316344
Author: Craig Gorsline; http://www.banktech.com/author-bio.asp?author_id=1720