Recapture Payment Spend Through Holistic Insights and Competitor Assessment
Written by: Joan Clark, Segmint, Inc
Our best experiences have become our basic expectations. Consumers no longer compare a company solely to its closest competitors, but rather to whoever sets the highest standard for the best experience. Consumers crave quality, convenience and more intuitive, personalized experiences. Consumers want the organizations and institutions they interact with to “know me”, “value me” and “make it easy for me” - and, in times of heightened trust and anxiety, to “protect me”.1
When those basic needs are not being met by the primary financial institution for all financial needs, consumers have choices. Winning the battle for ever-evolving consumers requires a combination of deep, holistic insight, and the willingness to design intentional experiences - and delivery accordingly.1
Using the broad scope of data institutions have about their customers, including payments they are making to competing institutions, FIs can build product strategies that better meet their customers’ needs, deepen their understanding of the customers complete financial picture, and ultimately recapture a larger portion of their customers’ wallet share.
Achievable Success to Capture Credit Card Activity
For the estimated 67% of households that have a credit card (with an average of 3 card relationship per American), the balance can be a heavy burden. The average revolving credit card balance, balances carried from one month to the next, among households with card debt in early 2019 is estimated at 6,354.2
Because this pattern of debt has no sign of declining, consumers’ need for competitive credit card options will continue to grow. Institutions who understand the number of card relationships their customers have with competing institutions and the payment amounts made to those institutions should take advantage of this information and use it to recapture a portion of that card behavior.
Customers that are making less than significant monthly payments (less than $500 per month) to one or more credit card providers may be more influenceable as they have not likely developed insurmountable loyalty to one card provider. Institutions can use this information to cross-sell their credit-card based on their unique rewards program, complementary products, or debt consolidation interest rates. Institutions should use all of the data they have at their disposal to deliver personalized, that meet not only the financial needs but also the lifestyle choices of their customers.
Personalize Cross-sell Messages to Stay Top of Mind for Your Customers’ Next Borrowing Need
As the overall consumer debt exceeded $13 trillion in the last quarter of 2018, with the total amount of unpaid revolving debt surpassing $4 trillion, there appears to be no end in sight for the borrowing needs of the consumer. The debt, while spreading across a multitude of borrowing products (mortgages (72%), student loans (10.5%), auto loans (9.5%), credit card (6%) and personal loans (2%)), is hitting record-setting numbers in all credit categories. As Americans are riding the current economic highs and lows, the one thing that appears to remain constant is consumers’ use of credit.3
Through the analysis of customer data for payments made to competing institutions, FIs can assess a more complete picture of their customers’ financial landscape. Coupling these insights with the knowledge of borrowing products customers have with the FI, marketing teams within the institution can deliver cross-sell messages that keep the institution top of mind for the next borrowing need. And, product teams can develop refinance or debt consolidation product offerings to simplify the financial lives of customers making multiple loan payments.
As a basic marketing principle, it takes as little as seven and as many as thirteen “touches” before a consumer will internalize and/or act upon a call to action. Applying this principle, a comprehensive and ongoing marketing approach is essential to engage customers and influence their buying decisions.4 Customer engagement is a journey, not a task.
Jumpstart Competitor Research by Understanding Customers’ Held-away Product Selections
Understanding your competition is almost as important as understanding your target audience. It is crucial to understand the competitors your customers have elected for their financial needs over the products you have in the market to pinpoint your research and identify how you can evolve your product offering to better meet their needs. However, generating an accurate and succinct list of competitors is often an arduous task. Specifically, when your product offerings in the market are varied.
Leveraging the names of the competing institutions to which your customers make payments to, provides a distinct list from which you can pinpoint your competitive research.
The insights gained from understanding the distribution and aggregate value of home lending payments based on unique payment amount ranges provides a clear picture of the type of loan product required by your existing customers. The myriad credit card providers your customers send payments to and the amount of the payment clearly communicates those providers to which your customers have developed an affinity. The type of investment firm your customers are transferring funds to on a recurring basis is an indicator of their willingness to find a new financial advisor. Use these insights to align your product offering to meet your customers current needs and to recapture your customers’ lending needs currently being met by your competitors.
Partner to Develop Institution-wide, Data-informed Strategies
Solutions that provide this level of customer insights are virtually nonexistent. But Segmint’s proprietary technology, extensive analytical toolkit, and expert team of advanced-degreed library scientists accomplish this mission with speed and accuracy. Its analytics platform cleanses and categorizes billions of inconsistently labeled transactions to produce the actionable and usable insights discussed above.
These insights are made available to FIs via intuitive visualizations within the Segmint platform or through Segmint’s data services API for ease of integration with an institution’s BI toolset, providing opportunities to analyze the data and identification of data-informed service strategies.
Joan Clark is VP, Product Management for Segmint, Inc, a provider of a data insights platform that cleanses, categorizes and contextualizes insights from customer financial transaction data. Click here to learn more about its data analytics and marketing product offerings for financial institutions.