Forget the funnel: Financial marketing must become a virtuous circle

Digital-first challengers have disrupted the old, cosy club of High Street banks, harnessing the power of customer data to deliver tailored financial products, services and customer interaction. What’s more, people today are likely to have accounts at more than one institution, with savings, credit cards, loans and other financial products held with different financial providers, further complicating banks’ ability to understand their customers.

Traditional banks are well aware of this challenge, with almost half admitting that they don’t make the best use of customer data. But they also need to know that remaining relevant to the modern customer isn’t just a matter of gathering and analysing data, important as that is. It also requires a fundamental re-think of how to apply this insight to reshape the age-old – and no longer fit-for-purpose – model of the marketing funnel.

From funnel to circle 

Attracting customers used to be a relatively simple affair. A business would first seek to gain brand awareness and build this into familiarity, before persuading the customer to consider and then open an account or purchase a product. Every subsequent interaction between brand and consumer would then be focused on loyalty.

That’s not how the world works in the digital age. McKinsey found that purchasing decisions no longer follow this linear pathway; it should rather be seen as comprising a network of touchpoints, each of which provides an opportunity for a customer to reject or accept the brand. What’s more, marketing itself has moved on. It’s now less about pushing messages out to prospective customers, but instead focused on pulling them in with engaging campaigns and content.

As brands move away from the funnel towards a more circular model of customer interaction, customer data is playing an increasingly important role. The challenge for established banks is not a paucity of information, but how to ensure that they can use it effectively and ensure they aren’t letting valuable data slip through their fingers.

Avoiding past marketing mistakes 

The big mistake that banks have made in the past is to assume that marketing communications need not be personalised and that the same generic messaging will have the desired effect on everyone at every stage of the marketing funnel.

The challenge for banks is to convince its customers that they’re viewed as more than just a number. That’s difficult when a pensioner receives an email urging them to save for their retirement, or when someone on a low income is sent information about mortgages. The same goes for offers from banks’ partners like retailers or restaurants: these sweeteners can be effective, but only if they reach the right people at the right time.

Generic messages might conceivably have worked in the days of the marketing funnel, but today they will do far more harm than good. The more that customers engage with banks and the more of their data they share, the greater the personalisation that they expect in exchange. That’s what the marketing circle is all about: a never-ending relationship where communications are constantly refined based on the best available data.

High street retailers (among others) have been pretty quick to understand how new technologies such as mobile and social media have made the marketing funnel redundant. They don’t just know whom to market to, but when to repeat a message and on which platform(s) so that it reinforces their offerings in someone’s mind.

It’s not that banks don’t know that this is important; it’s just that they face significant difficulties in effectively harnessing the data on which such personalisation depends. That’s where new technologies can make a real difference, helping banks to get a handle on their most valuable resource - data.

Finding data nirvana

The marketing circle is about more than just personalised communications towards the smallest possible segment: it is about getting the right message to the right person at the right time. That means more than just pushing out messages, even if those messages are, at first sight, tailored to the individual.

Because true personalisation is more than just content; it’s about timing, too. Sometimes a message needs to be reinforced several times before it ‘sticks’ with the recipient; at other times, just a single marketing communication can be effective, but only if it arrives at exactly the right time – for example, when a couple are getting married or are about to have children.

Getting the content and timing of these messages right depends on banks having not only full mastery of their own data, but the ability to use information from a mass of external sources, too. For example, if someone tweets their joy at a marriage proposal, then banks need to be able to send an immediate and relevant message – about loans for the wedding, say. The same goes for any other life event, from to buying a house to saving for funerals.

That’s obviously a lot of data (and data sources) to deal with, especially given the rarity of trained data scientists. Fortunately for banks, the next generation of intelligent engagement platforms will be able to gather data from a huge range of sources, analysing and categorising the information so that it’s useable within minutes.

By building the clearest picture of each individual – for example, their interests, current financial needs and upcoming life events – banks can not only create ever-evolving and always-updated customer DNA profiles, banks can completely transform their communications. Instead of the outdated funnel, they can create a virtuous circle of marketing, where the right message is delivered to the right person at the right time, wherever they are on life’s journey.