What the Financial Sector can learn from ecommerce.
Decades ago, the only way to compare products was to spend hours browsing around shops and making lists. This is no longer the case. Consumers can now pop on the web and use it to research and compare competitors (by analysing their reviews and prices), and use the information they source to make detailed and informed purchasing decisions.
It is fast, efficient and ensures instant gratification, so it should come as no surprise that eCommerce businesses have embraced these changes brought on by technology and have evolved their services to match... to succeed you need to match consumer needs and expectations.
What do consumers expect?
To put it simply, consumers want instant answers. They are not prepared to wait around for a call, nor are they satisfied with spending hours physically searching through products. They want results straight away.
Naturally, eCommerce has lent itself to providing instant access to information – in a bid to match consumer demands - because, like any business, they want to stay ahead of the competition. They recognise that in order to succeed they need to offer consumers perks that will justify their higher prices or the necessity to purchase now rather than later.
Yet because of the way especially retail eCommerce has evolved to offer so much to consumers, this, in turn, has bred a sense of entitlement where consumers believe they should receive the same level of service from any business, no matter their industry.
In fact, many feel completely justified in demanding and expecting more because it has become the norm. Likewise, there are consumers who feel that their needs should be prioritised over those of your business and that they should receive support, when, where and how THEY want it - even if it is not right for your business.
This means, should you fail to meet their expectations - they will view you poorly.
So, what can you do? How can you contend with these expectations within the financial sector, without hindering your own business objectives?
The first step is recognising the vast array of tools that eCommerce businesses employ, before seeing how they may translate into finance and insurance.
What can you learn from eCommerce?
1. Use your website to generate sales
A common mistake amongst businesses is using your website to solely promote your brand, your way of doing business and your contact details (lots of “your”, precious little “my”.) While it is important to be informative and showcase your industry knowledge and skills; you should also utilise your website so consumers can: get quotes; sign up for your services and buy any of the products that you offer.
Ecommerce sites regularly encourage consumers to sign up for their service newsletters with the promise that they’ll be the first to know about new deals. Likewise, they do limited, online-only offers that consumers won’t be able to find in-store. In doing so, it spurs consumers into taking immediate action, instead of going away and deliberating the pros and cons of buying.
As a financial service provider, you can incorporate these same tactics into your strategy by inviting consumers to sign up to your services, using the enticement of short-term deals on selected products (which you have purposefully placed front and centre on every relevant web page). By utilising micro-interactions and pre-sales mechanism techniques (from eCommerce), you can boost sales and increase client loyalty/engagement as they’ll keep coming back for more.
2. Use comparison tools
These are commonly used by eCommerce sites to help consumers to compare one product against another, as well as highlight all of the benefits and use-cases for each. With their support, potential customers will be able to eliminate any doubt or confusion they may have about a product, and instead will be able to make an informed purchasing decision as they’ll know exactly what they are getting.
Similarly, this will boost sign-ups to your site as they’ll be fully aware of who you are, what you offer and what you can provide them with.
REMEMBER: when users come to your site – especially in the finance industry - it is usually with the intention of looking at loans and insurance packages. To turn their interest into a sale, you need to give them the opportunity to compare different packages so they can clearly identify what is or isn’t covered in each package.
The easiest way to achieve this is to incorporate a product comparison engine into your site. In doing so, consumers will be able to easily compare products – depending on their chosen search filters – and determine which is the best for them, based on pricing and what is included in the package. Likewise, as a financial services provider, you will be able to analyse these search engine queries and obtain valuable information about your users, namely what they are looking for and how they formulate their needs.
TIP: just be mindful when using product comparison engines that your consumers continue to receive value and that the information you provide makes it easier for them to choose.
This means you need to consider their needs and sense of urgency – what is more important to them? For instance, are they more concerned with how long a loan will be interest-free (before having to pay you back) or are they more interested in how quickly they’ll receive a new card?
Likewise, you need to take into account the fact that financial products are harder to compare than regular eCommerce products. Without a preliminary calculation and risk assessment, you won’t be able to supply them with a binding offer or a set loan instalment. Because of this, you will need to make it clear from the outset that further information is required before a definitive decision/offer can be made.
In turn, given that most customers won’t have a clear idea on what to expect from financial products; it may be worth providing them with some suggestions that they can use for a basis for referral.
Given consumers growing need for easy accessibility; it should come as no surprise that mobiles are their preferred go-to device when it comes to searching the internet. Light, easy to transport and store, they don’t have to wait until they get home to log onto the web.
Knowing this, most websites should be designed mobile-first e.g. should be optimised for the screen size and behaviours of mobile phone users. This includes having easy to use search functions and navigation; clear ways for purchasing, and forms that are simple to fill out.
In other words, you should aim to make your mobile site as easy to use as possible, yet still provide the same functions as the main website.
4. Reward customer loyalty
FACT: 72% of customers who feel loyal to a bank are more likely to purchase additional banking products in the future, and not switch to another service provider.
One strategy retailers’ often use – to ensure continued custom – is to reward anyone who continues to use their services/products with loyalty cards. By offering them a system where they can collect points every time they buy, and then use them at a later date to reduce the cost of future purchases; this encourages them to keep on buying from the same providers.
According to a study by Collison Group, 66% of consumers expect to receive some form of recognition for remaining loyal to their banks. When their loyalty is overlooked, they revealed that they found it more frustrating than having to deal with unnecessary fees and poor interest rates.
Luckily, you can implement similar strategies within your bank. For instance, you can offer them discounted rates on additional products/services or you can offer them a completely different bonus that will assist them in other areas of their lives e.g. if they’ve got a mortgage with you, you could offer them a discount on your life insurance packages, but PLEASE use collected points with cash value, rather than arbitrary discounts – people don’t trust them or take them on face value… You can thank a general lack of transparency and the sales strategies of people like DFS for that
A good example of this in action is Compare The Markets 2-for-1 cinema ticket and meals reward scheme. It may be completely unrelated to their main service offering – enabling consumers to compare providers – but by offering this deal, users will be more inclined to follow through from Compare The Markets site to the provider (earning Compare the Market a commission for the recommendation).
Amazon too knows how to keep their customers loyal. While they may have to pay a monthly fee to become Prime members; under this membership, consumers can take advantage of unlimited free 2-day shipping on millions of their products (UK and US), as well as can access original and licensed TV shows and music.
Imagine if they were to use these same strategies to offer their users a credit card? If they were to venture into the financial sector and provide similar deals i.e. free membership to Prime if you sign up for their credit card; it is likely that many consumers would sever their existing banking relationships because they know Amazon would reward them for their loyalty.
And loyalty matters to customers both online and offline. For this reason, we suggest embracing Amazon's commitment to rewards and reaping the benefits of continued consumer loyalty.
5. Adopt customer-centric models
While customers do want to know more about your business and your origins; it is easy to lose sight of your main goal – enhancing the users’ experience – by losing yourself to branding and navel-gazing.
Instead, you need to find a balance where they can discover your brand story – if they so want to – but can also easily locate your prices and products. Quite often it is the latter they want to find first before they explore your history and make a final decision.
We suggest placing the information they want at the forefront of your website and on your other marketing tools, so they don’t have to waste time navigating around your site. Do that and you will make it easier for them to turn from prospective customers and into returning clients.
6. Utilise digital tools (for instant advice and responses)
Ecommerce has made it possible for consumers to buy products, at all hours of the day. Middle of the night… first thing in the morning… consumers no longer have to wait for physical stores to open to get what they want. Instead, they can log on outside of traditional business hours, find the products they’re interested in and buy them – all at a click of a button.
In many instances, they can also log queries using support tickets/contact forms that are easily picked up and addressed by bots. This enables consumers to get the answers they need without having to talk to a real person.
And these digital tools are proving to be increasingly popular amongst banks, as they can provide customers with the 24/7 support and service that they’ve come to expect. Whether you stick to modernising your website or choose to incorporate apps and client portals into your strategy; each of these tools will make your business more easily accessible - as and when your customers need them - without you having to pay your staff to work all hours of the day. Instead, AI and bots will pick up the slack outside of office hours.
Fintech has also made it easier for consumers to perform real-time online purchases from any device, anywhere in the world and using any currency, as well as benefit from increased security when making payments (thanks to AI programs that are designed to detect fraudulent activity). These tools can be easily incorporated into banking, giving consumers greater freedom to harness your banking products.
7. Automatic updates
Automatic order and delivery updates are just another two perks that consumers have come to expect outside of eCommerce and the retail industry. Designed to give consumers updates on the state of their orders, etc.; by adopting apps, emails and text messaging techniques into your business, you can use them to supply your customers with updates on the state of their insurance claims or on the balance of an account (automatically) - without them having to get in touch with a person.
Instead, with a quick click, they can log in to their accounts and check their status.
8. Integrate with social media
There is no disputing that social media plays a starring role in most people’s lives. We regularly turn to it to find out about businesses and the daily lives of our acquaintances. Ecommerce was one of the first to recognise its importance and were quick to integrate themselves into it with the help of ads and chatbots.
From ads that take users straight to a checkout page, to chatbot integrations that aim to keep users abreast of any updates about their new products; eCommerce sites regularly pay for these privileges as they can drive prospective customers to their site.
Fortunately, those in the finance sector can adopt similar techniques.
Take Plum. They are one of a few financial businesses who have integrated themselves into social media with the help of Messenger. With its support, users never have to leave the platform in order to use the service. Instead, they can communicate their needs/queries while still playing around on Facebook/Twitter.
Another bonus to integrating with social media platforms is that you can take advantage of consumers already having a detailed knowledge of how to use the messaging app. By utilising something they are already familiar with, they will be more open to communicating with you through them.
9. Digital only
We are living in an increasingly digitally dependent world, and as a result, more and more retailers are choosing to operate ‘digital-only’ and are forgoing have a physical location for their store.
Now, there are a number of benefits to taking this route, but the most important one is the amount of money you will save not having to run a brick and mortar store. Gas, electricity, office equipment, amenities... going digital eliminates all of these bills.
Knowing this, many financial services are moving towards going digital-only to match the growing preferences of their target audience.
The truth is, there is a lot that financial services can learn from eCommerce giants such as Amazon - primarily building stronger relationships with their clients. Amazon has taken the time to learn about their individual customers and their shopping patterns, and have incorporated this knowledge into their marketing strategies to make their services even more appealing.
And as you can see from the points above, it is entirely possible to take these techniques and immerse them into your financial business.
Yet, if you are struggling to make this transition, at Stunn we can help. We can show you how to harness the latest technological advances and use them to your advantage. From client portals to digital tools, to integrating with social media; our team can help you to confidently prioritise customer needs and offer a more personalised service.