Sixty-six percent of U.S. adults who use a bank or financial institution are receiving adequate service or consider themselves a "customer for life," according to a recent survey conducted for Xerox Corporation by Harris Interactive. While financial institutions may find this encouraging, new government regulations on the horizon could make it tougher for banks to maintain that close customer relationship.
While most respondents are happy with their overall service, only one-third were pleased with the service they received the last time they opened a bank account. The significant amount of documentation involved with opening a new account, loan or making an investment can be a time intensive and frustrating process for consumers. Banks that simplify these processes will gain a competitive edge with current and potential customers.
"Opening an account is often the first interaction a customer has with a financial institution, so it needs to be an efficient and easy process," said Mike Steinharter, vice president and general manager, Financial Services, Xerox Corporation. "Xerox is helping banks earn customer loyalty on day one – and throughout the entire relationship – with personalized and relevant communications, and simplified document processes."
Banking is personal, so it's not surprising that personalized communications let banks show customers they understand individual circumstances. According to the Xerox survey, financial documents are grabbing attention – with 94 percent of respondents finding communications from their financial services provider at least somewhat relevant.
Xerox offers the following tips to financial services institutions to make the most out customer communications:
1. Strike early: Most cross-selling opportunities occur during the first few months of a customer relationship. Research shows that banks that communicate with their customers early and often in the relationship improve cross-selling results and lower attrition rates.
2. Be responsive: By scanning and electronically storing the documents needed to open an account, banks can provide a faster, more efficient account-opening process, obtain information for more personalized communications, ensure greater data accuracy and increase compliance.
3. Take inventory: Any communication with a customer – by phone, web or face-to-face – is an opportunity to acquire data about their life stages, attitudes, needs and preferences. The information can then be centralized and integrated into the bank's inventory of brochures, catalogs, fulfillment literature, direct mail and statements so that details about individual customers or targeted segments can be placed in a bank's own document templates to deliver greater impact.
4. Get personal: While most information from banks today appeals generically to a mass audience; they are more likely to generate sales if they personalize every document, e-mail, etc. Incorporating variables in documents such as the customer's name, product type or life event is the key to generating response rates that far outstrip the typical 0.5–2 percent expected from direct-mail campaigns.
5. Keep it simple: Keep product information – including rates and fees – simple so bank staff can explain them and customers can understand them.
6. Be creative: Customers say they would be more responsive to more informal and creative communications from their financial institution; get the marketing and legal departments to work together to produce understandable and compliant communication.
7. Change the channel: Different customers prefer different communications channels (direct mail, e-mail, online, text messages, etc.), so ask early in the relationship which method the customer prefers and stick with it. Communicate offers in terms that customers or prospects will readily understand, through the channel they prefer, and at a time when they are open to receiving it.
By automating and customizing financial communications, banks can continue to provide a high level of service customers have come to expect, increasing the number of loyal customers for life.
This survey was conducted online within the United States by Harris Interactive on behalf of Xerox Corporation from Aug. 9-11, 2010 among 2,029 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.