Loyalty in financial services is not what it once was. Previously, people would remain with the same bank for decades. Now, with the ease of account switching, especially as improvements to the Current Account Switching Service have been announced, customers feel far less committed to their individual bank. Indeed, March 2016 was the record month for current account switches, with a remarkable 124,615 moves. 

No more ink needs to be wasted on the fact that despite wavering rates of switching since, this is at once a worrying situation and also an opportunity to seize market share, as Nationwide has seen. But the priority for any retail bank, and indeed for insurers or building societies, is shoring up their current customers. Notwithstanding a focus on service quality, omnichannel delivery and favourable rates, this requires an ability to identify the “customer prospects”.

The “customer prospects” are people who are still customers, but are actively eyeing up the competition. They are “in the market” and have already begun the challenging task of comparing and contrasting other providers. Most banks and insurers will have no idea when this will happen, simply because they are not looking for the right warning signs.

There are instances and events along a customer’s journey when current customers can easily become prospects. Technically, they are still customers at this critical consideration point, but they are also a prospect that may need to be re-won. All financial institutions and organisations have trigger points where churn is most likely. Some of these trigger points are defined, such as policy renewals within the insurance industry, the end of a financing term in the banking market, or a job change or retirement in the finance world. Other triggers are less defined, such as a competitor’s impressive new product/feature or a recommendation from friends and family. But, perhaps most painful are those triggers within the bank or insurer’s own control, such as poor service events that cause customers to entertain thoughts of defection.

But what signs should financial service providers be looking for? Poor quality of service or unfavourable rates are often not reported back to the business by the disgruntled individual, leaving the provider in the dark. Instead, the signs are written in the nuances of their interactions with their provider, and are therefore sat in CRM databases – you just need to know what to look for.

1. Customers making more frequent inquiries about their accounts. One indicator of a customer prospect may be unusually high numbers of inquiries about details related to existing accounts and policies. It is highly unlikely they have simply decided to become more informed customers. Instead, it is more likely they are gathering information to make apples-to-apples comparisons with your competition.#

2. Customers who are interacting with you less. Customers dropping their rate or degree of interaction is a definite sign that your relationship is in peril. Specifically, within the retail banking industry, an important trigger of an “at risk” customer is diminishing balances and fewer account transactions.

3. Customers who only receive a birthday card. Proactive, ongoing customer communication is critical. If your sole customer communication is an impersonal, Happy Birthday card with a closing line such as, “call me for all your banking or investment needs” followed by a stamped signature, you should not be surprised when your current customer becomes your customer prospect a long time before their next birthday.

4.  Customers who give you poor ratings or are detractors. This is of course a clearer sign. Unhappy customers will eventually leave. Case management is important to acting personally to retain the business, but really helps identify if there are larger systemic issues at play.

5. Customers who do not always choose you. In the case of insurance, if a customer has only taken an auto policy and not your home policy, it indicates a tendency to shop around for the best deals or customer experiences. If you are in an industry where customers have a lot of choice, understanding why they do not consistently choose you is imperative.

This being the case, how can you win them back?

An institution’s ability to accurately identify and recover at-risk customers depends largely upon the effectiveness of their customer experience (CX) platform. The platform should be capable of generating a separate measurement specifically aimed at exploring risk and trigger case alerts. Data mining tools can help reveal trends and patterns behind the data to recover customer prospects. However, at a minimum, customer prospects need to be classified as a sub-group of broader relationship and transactional research efforts and subsequently tracked. From this, patterns of dissatisfaction can be identified from survey responses, operational data and transactional data.

The further step is to go beyond identifying current customer prospects and start predicting those who may soon join them. This is where predictive analytics – the customer experience watchword for 2017 – will come into play. Traditional surveys will always have a use and should be encouraged, but predictive models provide a level of well-rounded knowledge that a survey would only ever be able to achieve with 100% response success. Hardly realistic. Financial organisations’ 2017 CX programmes need to include predictive analytics to ensure that customer prospects – arguably the most dangerous category of customer – are efficiently pre-identified, approached, converted and retained. The market is moving too quickly to assume that keeping pace is sufficient.

Once customer prospects are identified, it’s time to take action. Case management is essential to handling customer interactions personally and in a timely fashion. The impact at a higher level is that corporate level changes can be enacted to fix the root problem and provide against future issues. Finally, regular exploration of the marketplace through benchmarking can provide insight into the competitive gaps that separate companies retaining customers from those who end up losing them.

Customer prospects, while undesirable, can provide unique insight. If engaged in the correct way, they can illuminate what can be done to improve and perhaps what the competition is doing better. These customers are in the best position to give the most candid and actionable information to support retention strategies. If acted upon, chances are they could be turned into the most valuable of customers: brand advocates.