There is an old and often used analogy on some blind men that try to identify what kind of object they are investigating by touching different parts of an elephant. The man touching the legs thinks that he is standing in front of a temple, the man touching the tail imagine that he is holding on to a pencil whereas another man think that the trunk is a plow. This parable has been used by Buddha and others to stress the importance of considering different viewpoints in obtaining a full picture of reality. I will argue in this blog post that the analogy is applicable to customer facing personnel in the financial services sectors too. In most cases, they are just as blind as the men in the story to the full picture of the customers and their needs. Each touch point has information on the customer. But it is rarely combined and leveraged to identify the Next Best Action to strengthen the relationship to the customer.
Each channel provides an interesting facet to the customer, but the insights are rarely shared. The advisors have unique insights on the customer’s financial objectives and dreams. The agents in the Contact Center have unique information on the number of filed complaints and customer satisfaction. Even the digital channels carry valuable information that is rarely leveraged to better understand the customers. If captured, the open pages can provide valuable information on the intent of the customer based on their behavior on the sites. In addition, the digital channels can provide information on the effectiveness of the outbound marketing campaigns.
Some pioneers have been gathering customer data from the customer channels and combined that with data on the demographics of the customer and used advanced algorithms to predict what action is the most effective to strengthen the relationship. Neometric, a subsidiary to Accenture, has helped many of the companies that are on the leading edge on Next Based Action (NBA) solutions. They say that is common that companies that deploy NBA solutions experience 300% improvements in conversion rates on their outbound marketing. But the technology is just as powerful in reducing churn. Statistics on deflecting customers can be used to identify patterns so that you can target customers that are at risk with suggestions on how to address the root cause to the poor satisfaction.
Neometrics has performed an elaborate benchmark on 15 banks that have deployed NBA solutions. As you can expect from a company that is an expert on advance customer analytics, they set up the benchmark so that they could isolate statistical noise and focus on the effects of the NBA engine. They had the banks to divide their customers in two groups, one that was exposed to actions from the NBA engine and one that was serviced using the traditional approach. The result that is presented in the table below is staggering. Cross-selling was 50-90% higher using NBA compared to the traditional approach. Similarly, the churn ratios decreased with 11-19% using NBA.
I do not have the statistical data yet but I predict that we will see an increased use of NBA engines in the future. Both the financial services companies and the consumers will appreciate the emergence of rule based advice from NBA engines. The financial service companies will reduce their costs and compliance risks. And the customers will probably take some comfort in being offered products that others in the some financial solution as themselves have acquired.