This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.
One in every five bank customers opened up a new account or signed up for a new service from their bank in the last six months. The vast majority of these bank sales came from customers who already planned to open an account or buy a new service -- the bank did not need to do any marketing with these customers, since they were going to open an account with or without any prodding.
Even more importantly, an additional 13% of customers discussed buying something new, but opted not to do so. This points to two important groups of potential customers with whom banks are missing opportunities:
- Those who are thinking about opening an account, but who need a nudge from the bank to take action. This type of customer currently accounts for 33% of bank sales.
- Those who aren't thinking about opening an account at all, but who are moved to do so with a little push from a bank. These folks account for a small 8% of bank sales.
Reaching and converting people who aren't already thinking about opening an account is a tough job. What's easier -- and where banks are missing a major opportunity -- is to convert more of those customers already pondering opening a new account, but who hesitate to do so for one reason or another.
More than half of the customers who are considering buying a new product seek out information prior to the time of purchase. In fact,simply seeking out information -- from any source -- prior to a purchase leads to a 17% lift in sales conversion rates. The key for banks is to identify the most influential information sources for converting the "pondering" customer to the "sold" customer.
Gallup's Retail Banking Industry survey finds that social media and written materials are by far the most likely to lead to a sales conversion. Speaking to someone at a branch or to a customer service representative over the phone -- the two sales channels with the highest cost -- provides a comparatively smaller lift in sales conversion, even though they are primary information sources for potential customers.
These data underscore that bank customers live in a multi-channel world. To address this challenge, banks need to develop a comprehensive list of sales and marketing information resources available across channels and then ask themselves: - Do we know where our customers, specifically, are looking for information prior to purchasing?
- Are we delivering a consistent message across sales information channels?
- How do we balance our resources between those channels that are high impact in conversion but low in usage (i.e. social media) vs. those that are high in usage but have lower impact in conversation (i.e. spoke to someone in a branch)?
- Do we know what our customers value in a bank and are we delivering on the message at every touch point?
- Do we know what actions we need to take to increase conversion rates in each channel?
- Starting with this checklist will give any bank the basic insights needed to stop missing so many sales opportunities.
David Leonard is a Senior Managing Consultant for Gallup who specializes in financial services consulting. He works with financial institutions worldwide to transform their customer experience and brand strategies.
Beth Youra specializes in financial services consulting, working with many financial services firms of all sizes and specialties to design and implement large-scale performance management systems. Beth also serves on Gallup's financial services practice research team, tasked with leading Gallup's internal financial services research, analytics, insights, and communication.
