To appeal to the next-generation consumer, banks need to reevaluate how they develop and deliver new products and services.Banks must look beyond the traditional array of ready-made financial products and services, and concentrate on the three C’s: Co-creation, Customer Experience and Community Recommendation.
Millennial customers are not content with run-of-the-mill products, and expect to exert influence on the product or service they choose, reflecting their unique personality.
Putting one’s photo on a credit card or tailoring the layout of mobile banking user interfaces are two tell-tale examples of the rapidly approaching future. Like other businesses, banks must think of ways to drive this co-creation trend even further to appeal to millennials.
For example, new co-created offers could include mortgages or credit cards that allow customers to make a monthly donation to a good cause of one’s own choice, or a credit card with a choice of delivering cash back or a lower APR. Further enhancements could come from making these choices available online and switching between choices on a monthly basis.
Millennials are very sensitive to the overall customer experience they receive from any business, especially financial services institutions. They want an experience beyond the bare-bones products or services being offered. Therefore, it’s critical for banks to focus on the entire “A-through-Z” process before, during and after the purchase.
Domino’s Pizza has built an online co-creation pizza-ordering service enabling customers to create their own pizza online, put the order into Domino’s system, and track the pizza creation, baking and delivery process through five steps. Now is the time for banks to design a similarly transparent process for the application of various financial services products. Anyone who has ever applied for a mortgage, credit card or loan knows the mind-numbing non-transparency of this process, which could be made far more accessible with some simple online tools.
Starbucks Coffee has an online customer suggestions box that enables consumers to make special requests or provide the company with feedback on an outlet-by-outlet basis. As a result of a customer suggestion, a busy Starbucks branch in the U.S. installed a fast-food-style light display above its customer counter, advertising its offerings in a more accessible manner, and replacing a traditional hard-to-read chalkboard in the back of the outlet. Banks need to take a page from the Starbucks playbook to develop a similar technology to get to know the wishes of their customers in order to drive up branch or Internet traffic and profitability accordingly.
Technology plays a very important role in advancing the customer experience, as Domino’s and Starbucks have showcased in their recent investments.
More than any preceding generation, millennials share a distrust for established institutions and don’t easily accept their advice. They would much rather take advice from the online community to which they belong, even if they have never met any of its members in person. Millennials rely on crowd-sourcing – scanning the vox populi – for advice on purchases, investments or other important decisions. For successful marketing communication with millennials, a community recommendation is golden, whereas a bank branch recommendation is suspect.
Banks, therefore, must develop and implement an active community around their products and services, ideally with an open and public membership. The community should allow for both the good and bad news about the bank’s services to be published, in order to come across as genuine and sincere. In addition, the community should be closely monitored by the bank – answers and advice must be proactively managed, and millennial prospects and clients must feel that the bank takes its community seriously. Community management must not be taken lightly, and it should be an essential part of a bank’s social media strategy.
The lack of online community monitoring can have a detrimental effect, just like United Airlines experienced when an unhappy customer posted a now viral YouTube video, “United Breaks Guitars.” The video’s nearly 11 million hits blasting the airline’s perceived lack of customer service has cost United an estimated $150 million in market capitalisation and countless rants on various travel blogs.
The Millennial Mind Meld
Banks and the financial services industry in general can’t delay rethinking their traditional ways of winning new customers. Institutions that fully embrace and execute the three tactics of co-creation, customer experience and community recommendation, will gradually experience rewards that far exceed their investments. Eventually these newly fostered relationships will begin to grow on their own, with new customers coming in via word of mouth vs. expensive ad campaigns.
About the Author:
Gabriel Schild is Director at cognisant Business Consulting (CBC) based in Amsterdam, Netherlands. Gabriel has over 15 years of experience in operations and consulting for the financial services industry, and is head of France, Benelux and Nordics for CBC Strategic Services.
Business Insider Emails & Alerts
Site highlights each day to your inbox.