“How do we provide the right offering to the right customer at the right time?” It’s a question many financial institutions ask themselves in the quest to personalise their product and service offerings.
Personalisation has never been more important for financial institutions. As a result of the Covid-19 pandemic, visits to branches are limited, if not impossible, so customers are clearly oriented towards more frequent use of digital services.
Customer expectations from financial services are also being driven by the meticulously customised services of digital-native banks and ‘big tech’ giants. They are looking for financial institutions that have a deep understanding of their needs – they don’t want to be handed a generic set of fixed, disparate services. Increasingly, they want to be treated as if they are the only customer.
That’s why organisations are attempting to go beyond ‘personalisation by segment’ to individualised communications and experiences, the so-called ‘segment of one’. In essence, this concept is about delivering the right offer to the right customer at the right time, as opposed to a segmented group.
It’s the ultimate level of personalisation, enabled through the use of data, advanced analytics and advanced digital technologies.
Traditional demographic and geographic targeting methods simply don’t do the trick anymore, so more and more financial institutions are moving away from classic customer segmentation methods to hyper-personalisation and the segment of one approach to better serve individual customer needs.
The segment of one concept may at first seem daunting for any institution. They might think that, in order for this approach to work, they need to create as many product/services offers as there are customers. Not necessarily true.
Deploying technology effectively
In a consumer survey, Accenture found that a segment of one approach means “offering personalised experiences tailored to personas.” They maintain that banks and other financial institutions need to develop new capabilities, specifically using and deploying technology effectively to create personalised experiences for increasingly different customer segments – ultimately down to the segment of one.
They found that “many banks have initiatives aimed at targeting demographic-based clusters such as young people, Millennials or older people, but some banks are now targeting customers based on lifestyles, values, aspirations, mindsets and underserved needs.”
Of course, serving a segment of one is not limited to individual consumers. Financial institutions should also focus their efforts on the small and medium enterprise (SME) segment and the needs of individual businesses. And many financial services organisations are now taking a GAFA (Google/Amazon/ Facebook/Apple) approach, leveraging insights and data derived from services and individual organisations to boost their core business.
Demonstrating added value
In the race to harness digital technology and innovation, it’s easy to forget that what customers value above all else is relevant advice that is specific to their unique problems. Institutions need to actively target customers interested in personalised services with experiences that strengthen their brand values at every touchpoint. These personalised services should also demonstrate added value.
Digital toolsets allow for increased flexibility and a more customer-centric experience – they can help open up conversations with customers to address their specific pain points at specific times. If the customer has a particular requirement, they can open an app with a personalised dashboard, contact their bank through a preferred digital channel and receive a personalised message answering their query.
In the end, interactions with financial institutions should be rapid and relevant for the customer and the outcomes more personalised. Serving the unique needs of every customer, with hyper-relevance and hyper-convenience, is really what ‘segment of one’ is all about.
Financial institutions can use Conversational Banking to communicate digitally with their customers and ensure a ’segment of one’ narrative across all channels. Find out more.