By Julia McColl, Commercial Director at Chetwood Financial
All large organisations have the same problem. Delivering new products for their
customers is expensive. They need a business case to justify the investment and so, they
find themselves creating products and services with a target market that’s vast enough to
cover the outlay.
But what if there was a different way? What if you could truly understand the needs of a
niche target market and deliver a product just to them? By creating something tailored
to specific needs, wants and cost, you’d be delivering a product that outperforms all of
your customer satisfaction metrics and helps you grow your customer base. And what if
you could do all that, as well as deliver the ROE that your shareholders demand?
For too long, banking has continued to operate on old and expensive technology, slowing
down the rate of change and preventing innovation from taking place. This in turn
hampers creativity, as every idea is measured against an impossibly high bar in order to
cover costs. And because of this, you end up with generic products that work for everyone
and no-one at the same time; near prime customers end up being charged more because
you want to offer your prime customers a 2.9% loan rate, on which no-one makes money.
The lines blur.
But there is an alternative, as there are many technology solutions out there that don’t
cost the world. These solutions allow you to think differently, without the historic
limitations or constraints. You can use them to create new brands that talk to your target
market and allow you to differentiate between different products for different customers
quickly and easily. This will help you open up your business model completely – you’re no
longer just one thing, or one brand. Instead, you can be lots of different things to lots of
different groups of customers. And you can play only where you think you can win – and
not where you can’t.
In order to do this effectively, the first thing is to go and speak to your existing customers.
And please don’t do it in a 1970s focus group style with two-way mirrors. Go and talk to
them like humans in small groups, so that everyone gets involved but no-one feels
intimated. Ask them open questions about what they need, how they feel about your
product and how it could be better. And listen. Identify the different groups within your
customer base and unpick their differing views. Do they have diverse needs based on
their circumstances? How would you personalise your product to better meet their
needs?
Once you’ve established your end goal, the challenge is how to get there. In an ideal
world, everything would be designed from scratch, from the brand name, the product
features, the onboarding journey and every single communication. But what if that’s just
not an option?
Focus on the quick wins, such as what you can do to personalise a customer’s experience
without overhauling your IT. It could be as simple as differentiating the emails that
different customers receive – the copy, the frequency, the level of detail. You could also
consider personalizing your webpages for different customers once they are logged in, or
you could add a follow-up call to the journey to provide further support where customers
need it.
All of this can be done without fundamentally re-designing a product, and it gets you one
step closer to offering a personalised experience for your customers. In today’s market,
providing a personalised experience is no longer a “nice to have” – modern banking must embrace personalization in order to keep up with customer demand or risk losing market
share as a result.
Chetwood Financial is a new kind of bank. Based in North Wales, the digitally native financial services company uses data and advanced analytics to produce personalised and targeted products that make customers better off