Onboarding: Financial Services Out-Of-Box Experience

The drive for revenue and the desire to improve the customer experience are converging within financial services, with one of the results being a renewed interest in new customer onboarding. On the revenue side, the importance of onboarding is clearer. A new customer who leaves after opening a new account is an expensive proposition. For something like deposit accounts, that attrition rate is somewhere between 25% to 30% of new customers, and when you add up the cost to acquire the account, the cost to open the account, and the potential loss of ongoing revenue, the impact can be huge to a financial services firm.

On the customer experience side, a new revelation has surfaced. Onboarding is to financial services what out-of-box is to companies like Apple computer. Apple sweats the details around the experience of getting, opening, and engaging with their devices. Financial service companies do little in that way, but that is changing with a renewed desire to improve the customer experience. That is where onboarding comes in. Onboarding is the out-of-box experience for financial service product. It is the processes and experience new customers have as they activate and utilize a new product.

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Finovate Europe 2012: Innovation In Digital Financial Services

A number of people asked me to repeat my blog post from last year with my impressions from Finovate, so I thought I would.

For those of you who aren’t familiar with Finovate, it’s a fast-paced format with seven-minute live demos and pitches from 35 financial technology vendors. It’s produced by Online Financial Innovations, the people behind the excellent NetBanker blog.

I was lucky enough to go along to the show in London today. Unlike last year, when four or five themes dominated the day, this year’s exhibitors were more diverse. Among them were:

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The Brick-And-Mortar Renaissance

Since the 1970’s, retail stores have slowly undergone a digital evolution. POS systems replaced cash registers, credit cards became the payment norm, and security tags reminded shoppers to pay. Despite these changes, the fundamentals of the customer shopping experience remained unchanged: We still pick up products, ponder a decision, and either leave empty-handed or wait in line to pay.

However, in the digitally connected store of 2012, big changes are underway. Fixed checkout aisles and cash registers are being replaced by smartphone-wielding store associates who now take the checkout to the customer. Furthermore, the smartphone generation performs self-assisted checkouts directly from their phones while sleek new in-store touch-screens allow them to experience products without opening the box or removing the coat hanger.

Welcome to the brick-and-mortar renaissance.

In my new report, The Digitization of the In-Store Experience, I take a detailed look at the digital transformation underway at retailers across the US and Europe, including:

  • The technologies being adopted. Retailers such as Lowe’s, Gap, Nordstrom, Macy’s, and Sears are rolling out smartphones and tablets to their store associates and investing in next-generation interactive displays and kiosks. Certain solutions are starting to prevail across retailers.
     
  • The empowerment of the sales associate. Armed with smartphones and tablets, empowered sales associates are helping customers on the shop floor as well as busting checkout queues with mobile POS.
     
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Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012

Nearly 50% of web shoppers start their research process on Amazon or Google.  Over 40% of the world’s Internet traffic constitutes daily visits to Facebook and Google. Twenty-one percent and 49% of iPhone and iPad owners respectively purchasing products via these devices. Google, Amazon, Apple, and Facebook not only absorb consumer time but are quickly becoming gateways for other eBusiness traffic. This makes the Big Four critical in the product research and sales funnel.  In our recently published report, “Google, Amazon, Apple, And Facebook: What eBusiness Executives Need To Know For 2012” we help eBusiness professionals identify what’s on the horizon for these companies and what it means for them. Some key findings of the report include the following:

  • Google has broad ambitions to support (or displace) incumbent eBusinesses. While Google struggles to move beyond its paid search roots, eBusiness professionals will need to keep the company top of mind because it maintains a majority share of online marketing spend but promises to transform every industry from financial services to travel to health care and retail.
  • Amazon is disrupting retail economics. While Amazon has the smallest market cap of the four players, it is completely changing the dynamics of manufacturers and distributors.
  • Apps can be powerful tools to support eBusiness objectives. Companies that see apps as just extensions of web content are missing the many opportunities to enrich experiences with cameras, microphones, speakers, accelerometers, and location-sensing capabilities.
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Is Facebook Worth It? You Bet

I was called a Facebook hater last week.  No ambiguity.  "You're such a hater!" this woman, who happened to be a social media marketer at a large retailer, told me. I will admit, I have reservations about Facebook’s role in commerce which has no doubt made her job more difficult, but I must defend myself.  I’m not a hater.  In fact, contrary to all the tweets and blogs questioning Facebook’s purported $100B valuation, I actually think the company is worth all of it and probably more. (To those same critics, if Facebook with $1B in profits is overvalued, what does that say about Groupon with about as much in losses?  But that’s a discussion for another day.)  Here are some considerations:

  • 44% of the world’s internet traffic visits Facebook daily.  As the CEO of an internet company months ago hypothetically and brilliantly asked me in response to the question of Facebook’s valuation, “What’s half the internet worth?”  Whatever the right number is, it’s a lot and when framed like that, it makes $100B seem very reasonable.
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Don't Believe The Hype: 5 Trends to Watch (and 5 to Ignore) for On-line Retail in 2012

 

Every year at Forrester we take a look ahead at the driving forces behind online retail and make some predictions about how we think things will evolve and we try and identify the key trends to watch or even act upon. This year we’ve done things a little differently.

Sucharita Mulpuru has taken a look at the “Key Trends in US Retail eBusiness” while I’ve concentrated on “European Retail: Key Trends to Watch in 2012”.

Broadly we find similar themes – multichannel, mobile and changing consumer behavior in light of the continually depressing economic condition. But there are some notable differences in Europe. I’ve said this before, but I will continue repeating it – the national, cultural, language and regulatory differences that persist across Europe make European eBusiness a complex beast. 2012 will bring us more in the way of EU strategy papers and directives as the European Commission begins to formulate what their “Single Digital Market” looks like in reality. While we are unlikely to see many changes immediately, the EC’s vision for the future will begin to crystallize. Add to that changes to the e-privacy and distance selling directives that must be acted upon, European eBusiness executives are going to have a busy time in 2012 just keeping abreast of legislation.

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Citibank Moves Boldly Into The Tablet Banking Market

Hotcakes, you've got some competition: the phrase "selling like tablets" might soon enter the global lexicon. And it's not all hype — though there is a fair bit of that as well. Tablet users in the US are estimated to grow at a compound annual growth rate (CAGR) of 51% from 2010 to 2015. That’s a fast-growing market for firms of all stripes.

As such, the tablet as a touchpoint is becoming a critical consideration for eBusiness & Channel strategists. This is especially true for executives at banks, as financial transactions benefit from the immediacy of the mobile channel, but users often struggle to make these transactions on smaller smartphone screens.

Enter tablet banking.

Forrester has previously identified best practices for tablet apps in financial services, but only in the past year have leading banks rolled out robust tablet banking efforts. One of the strongest tablet offerings we’ve seen is from Citibank.

In my new report, I outline the process Citibank went through in building its own tablet banking strategy, developing an iPad app, rolling it out to customers, and continually improving the service. We outline how Citi:

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When Was "You're Welcome" Replaced With "Uh-Huh"?

One of the essential differentiators of great customer service experiences is the human interaction.

Some folks want a chatty interaction with a full narrative on the weather. Others just want quick and friendly contact. But the bottom line is this we all want to have an experience that leads us to feel appreciated. This human interaction is key element to one of the three tenets of our Customer Experience Index: "How enjoyable were they to do business with?"

I considered this recently while at my neighborhood pharmacy. The company offers best-in-class customer service technology. They proactively remind me of prescription refills, they have a sophisticated mobile app, and their store layout is easy to navigate.

But I am invariably invited from the queue to the cash register by a shout of "Next!" and the only words offered to me are the sum I owe. For all their best-in-class retail and mobile strategies, I never walk away feeling that the company is enjoyable to do business with. Instead, I walk away wondering when was "you're welcome" replaced with "uh-huh"?

A great customer service experience is the result of the right technology, processes, and the human factor. To ensure the human factor isn’t marginalized, eBusiness leaders must:

  • Embed the ideal customer experience in your culture. Make it clear what customer service exchange will reflect your brand. Be explicit. Train and reward employees to personify your ideal brand experience.
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The Guts To Grow: What Amazon.com, Trader Joe's, And Westin Hotels Have In Common

I received a curious email from one of the founders of eBags the other day. In it, he said that by bringing customer service back to the US and away from an offshore vendor, the company actually reduced customer service costs by 34% (yes, reduced!) while still growing sales by double digits in Q4. It reminded me of another article not too long ago from the Wall Street Journal that cited Qantas as having one of the world’s best check-in experiences because the airline invested in RFID tags for passengers, a decision that the article pointed out no other airline has yet copied. These examples stood out to me because these companies managed to pull off a very difficult trick: to make contrarian investments that industry peers would consider hogwash that nonetheless pay off in spades. It’s more likely that such investments would backfire, but when they work, they succeed beautifully. Three cases in point: 

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Why Facebook Is Still A Tough Sell For Retailers

As the Facebook IPO nears, all eyes are on the valuation the company will command.   The vast majority of that valuation will come from the company’s digital advertising business.  As for commerce, don’t expect much.  About a year ago, I asked the question Will Facebook Ever Drive eCommerce? and the answer hasn’t significantly changed in the time since.  Not only has Facebook seemingly been much more focused on the display ad side of the business all but dismissing retail (they rejected a keynote slot at the annual Shop.org summit last year and rumor has it that they turned down the slot following Bill Clinton at this year’s National Retail Federation big show, the trade show in all of retail), but the numbers that retailers have shared with us are no more encouraging:

  • Stores or fan pages on Facebook have yet to generate any significant revenue for companies as few shoppers visit brand pages or Facebook stores after becoming a fan
  • Few shoppers buy after seeing information posted on Facebook; a holiday study we did with GSI Commerce showed that less than 1% of revenue from retailers was attributable to social networks
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