There’s millions of dollars being invested in the financial services sector on customer and member engagement. The choice of customer or member as a term depends on the type of institution and for the purposes of this article, they’re interchangeable.
Having invested some of those dollars, I still struggle to understand what it is we are pursuing when it comes to engagement. Let me put it this way, as a segment of one, I would not classify myself as engaged with any of my financial services providers. They are service providers - nothing more or less.
I have no emotional connection with them, but do have an opinion on whether they deliver true to label. For the most part, this reflects their utility - can I jump on and off their website, undertake the transactions I want to make and do all this an an environment that is private and secure. In retirement, you could add to that the receipt of regular reliable income and solid investment returns from my super fund.
Does this make me loyal to a brand? For the most part, yes. But it’s largely based on the basics - reliability, accessibility and online enablement. In other words, I stay as long as it doesn’t stuff up, but it’s hardly what I would term engagement in the context of emotional connection.
It was different before online banking, share trading and platforms. To do anything, I’d have to head down to the local bank branch, sit patiently with a number and engage with a human. I might have to drop into my super fund to deposit a cheque and talk to someone at reception.
My first business loan was through Advance Bank in the early 1990s. I didn’t know much about the bank, other than a guy called Mike had enough faith in me to lend start-up money when no one else would. I stuck with Advance Bank, later swallowed up by St George Bank just on the basis of that personal connection and some bizarre sense of obligation.
As we invest our millions, what do we expect of engagement and, more importantly, what sort of connection do members and customers expect? What metrics are relevant to measuring return on these investments? Where is the threshold at which we step beyond the point of diminishing returns?
The challenge is that engagement is neither a constant nor uniformly defined by customers. Within large customer bases, there are multiple segments, the best being defined by behaviour or, in the case of financial services, attitude to money. They’re risk takers, coach seekers, self-directed, knowledgeable, financially illiterate, thrivers and survivors. In most instances, customers will migrate from one type to another depending on current circumstances.
Where I have been involved in evolving strategies based on this, we have refreshed segments every quarter, capturing the most recent activities and transactions of every customer to ensure that the next-best message reflects their greater activation or de-activation. Our aim has been to respond as best we can to their life priorities as reflected in our data.
We do this knowing that greater connection with customers increases responsibility to them. If they trust us and our advice, then they blame us when the next global financial crisis strikes their sense of wellbeing and security. Peak engagement becomes a double-edged sword.
For organisations pursuing the holy grail of engagement, the reason for this is often the gap between promise and its organisational and technological capacity to fulfil it. Legacy systems, and/or lack of control of processes that are outsourced, are regular culprits and do nothing to enable organisations or their customers.
To top it off, customer expectations are being benchmarked by far more nimble and tech-savvy challengers or platform providers. It’s like being asked to mark a very fast player in a sporting team - you get to the spot only to find you’ve been left in their wake.
So where does this leave the pursuit of engagement? Is there really an equation between the level of engagement and customer loyalty and retention?
In financial services, I question whether there is any emotional connection that is achievable for brands, where emotions are driven primarily by our connection with our money and how it is managed, which is really about out confidence in functionality and integrity of process and systems.
The security and confidence we have in our financial services providers is possibly just an extension of how we feel about our financial wellbeing. As long as our money is still there when we wake up each day, do we really care who is looking after it?
Where does satisfaction with utility and effectiveness end and emotional connection with the organisations and people who deliver it begin? In a digitally enabled world with dramatically reduced human interaction, it’s most likely that functionality and convenience trumps most other things.