What’s Critical in the Vertical: Australian Banking
In recent years, the Australian “Big Four Banks” have been under deep scrutiny by the sophisticated Australian consumers, critics and government officials. Many believe that the closed competition has hindered the bank’s commitment to invests in building trusted customer relationships, improving customer service, and word of mouth advocacy within the Australian market.
Our second report in the What’s Critical in the Vertical series conducted with the CMO Council, we looked at What’s Critical in the Australian Banking Vertical. As will all our research, there were many interesting findings. I’d like to point out a few highlights from the report:
From the Consumer: Satisfied but Searching
When 1000+ banking customers were asked about their relationship with their bank, we learned there is plenty of room from relationship improvement. In fact, only 44% reported they view their existing bank as a trusted advisor. To add to this, nine percent considered their bank as “Cold and Faceless” as well as “Dinosaurs and Relics”.
Why all the contention?
The audit revealed that consumers are tired of the high costs, and hidden fees, billing errors, and the additional service charges that tend to accompany both. Additionally, according to the poll, the customer banking experience is severely lacking. A surprising 23% said they regularly receive poor customer service and a disturbing 16% have been on the receiving end of “Rude” behavior from bank employees.
Given this insight, it is not a surprise that the Australian banking customer is defecting at a churn rate of 12% per year. Customers are in search of lower rates, more online options, transparency, improved services, and reduced fees. The churn rate will continue to grow unless the current marketing strategies begin to focus less on products and more on the customer experience. However, for the most part, Australian Bank consumers are loyal with nearly on third of customers staying with their bank for 5 – 10 years.
From the Marketer: Branding over Bonding
When asked about their top priorities for the year, Australian Bank Marketers reported: gaining deeper customer understanding of their customers and their expectation, driving relevant communications, and offering more on line services; yet improving the overall customer experience with the bank and brand was a lesser priority.
In this new era of customer power, banks can create relevance and revenues by focusing on their customer.
The audit uncovered that 88% of marketers believe that better access to real-time data and analytics would be the best solution to improve visibility into customer retention, profitability and lifetime value. But only 27% of marketers reported investment in data analytics to better segment and target key customers. However, we were pleased to find that of those that invested in analytics 100% reported improvement in customer segmentation in order to better execute targeted communications.
The research indicated that when banking competition heightened, 51% increased marketing and advertising spend to drive improved brand awareness. The Australian banking marketer may consider a lesser focus on branding and more on bonding. While branding tends to be more of a “shout” at the consumer from a billboard or television to praise their own products, the smart marketer will level the playing field by creating strategies and campaign that enable key customer conversations about future needs, concerns, and goals. These marketers will then be in a position to then show how their offerings or products satisfy those needs.
While the Australian banking marketer clearly understands the need to improve services, retention, and loyalty. They have a plethora of customer information and data at their fingertip to begin their journey. Precision Marketing can help these marketers use their data to create actionable insights, allowing them to predict needs with more accuracy – such as what product to cross or up sell – cutting through the noise and delivering targeted, relevant communications that benefit both the consumer and the bank.
Category: From the Desk of...
