By Matt Gillin, CEO, Relay Network
If we were to ask a random sampling of any 100 CEOs in the financial sector if their business would benefit from more customer engagement, I’m certain all 100 would reply with a resounding “Yes!”. If we were to ask how they are going about solving their engagement problem, all would answer with some version of “we are investing heavily in digital transformation.”
And yet, if we asked them whether digital transformation was yielding the results they expected, I believe most would probably look away. That is because the digital transformation playbook often discounts for today’s most critical business challenge: Solving the customer engagement problem. In fact, IDC analysis estimated that 70% of digital transformation initiatives do not achieve their desired business outcomes.
According to Gartner’s 2021 View from the Board of Directors survey, board members rate enhanced customer engagement as the top outcome expected from digital business investments. Customer engagement has never been rated this highly in the past. And yet, ironically, banking customers are feeling less engaged than ever. In fact, according to Gartner, eighty-five percent of your customers feel are not receiving value. IDC analysis estimated that 70% of digital transformation initiatives do not achieve their desired business outcomes.
The new battleground for banks is not how digitally transformed a business has become but how effective that business is in building meaningful digital relationships with its customers. At Relay, we’ve been helping organizations digitally engage with their customers for eleven years, and the primary lesson we’ve learned is that all business objectives ultimately roll up to a single, universal outcome: creating customers for life — it’s the best single investment a business can make, because a customer for life is deeply invested in a brand, they feel the brand adds value to their world, and, ideally, they can become a brand advocate. To create customers for life we need to build trust. After all, how can we create customers for life if they don’t trust us?
The problem is that the methods and tools we use to engage with customers today are not intended to build trust, which makes them less and less effective at driving business outcomes. For example, automating emails, customer relationship management, personalized web portals, AI chatbots and omni-channel communications are all components of a digital transformation tech sack, but they aren’t designed to build trust.
Back in the day we earned customer trust through one-on-one engagement: Your banker would call you to congratulate you on your new job and offer to help you enrol in direct deposit or guide you towards a banking product better suited for a return on your savings once your nest egg had grown beyond your liquidity needs. In the digital age, financial institutions are trying to bridge that gap with personalized SMS messages, or pop-ups and banners in web portals and mobile apps. But in doing so, they are forcing the customer to come to them, making the customer do all the work and, really, cheapening the meaning and value of the word “engagement”.
Engagement should be personal, right? There’s a big delta between something personalized and something personal. Do clickthrough rates really map to customer lifetime value? And when they do click-through, did they achieve the desired outcome? A user logging in to check their balance is, of course, an essential digital capability — but it’s transaction, not an engagement. Transactional interactions are often errantly referred to as “engagements”, whereas true engagement should be meaningful — how customers feel known, educated and good about their relationship with their bank.
What we’ve learned is that true engagement is the only way to establish trust with customers. The litmus test for true engagement is that it mustn’t be purely transactional. That is, true engagement doesn’t merely benefit some business outcomes, like increasing revenue and reducing costs, it is mutually beneficial for a business and its customers — anticipating and meeting their needs like feeling known, feeling like their time is valued — not making them navigate a maze of links and forms to get something done.
To address this need for true engagement, we’ve created a digital channel through which businesses and customers can meaningfully engage. It’s a 1:1 feed containing the experiences that are most relevant to them. In our world, experiences don’t merely map to outcomes like revenue and cost savings, we believe that fostering and deepening customer relationships through education and information are just as important as getting them through the next most revenue-generating hoop. We’ve partnered with several of the top financial institutions in the United States to identify the key mutually beneficial experiences that foster customer trust in banking. These experiences are natively built into our software, making it easy for multiple product silos to integrate the delivery of those experiences natively with their existing tech stacks. We can start driving more of the highest value experiences that matter to you and your customers at the highest rate on day one.
When I say our goal is to create customers for life, I mean that not only for our clients, but for us as well. We think of our customers as partners, and our goal is to enable our partners to continue creating customers for life through mutually beneficial true engagement.