Customer Segmentation

What are the trends in customer segmentation and personalisation that will help to improve customer engagement?

There is no doubt that Financial Service Providers have a deep desire to achieve extraordinary client service. The truth is that there will need to be considerable change for this to be a reality if an FSP is going to thrive into the future. Based upon research documented by Experian™ in their paper entitled “How to implement the new rules of customer engagement”, there are many interesting lessons and guidance that can be gained from this research (www.decisioningvision.com).

For example:

  • 77% of providers said customer experience will be the ultimate differentiator for Financial Services in 2020.
  • 87% of consumers are calling for deeper brand relationships and engagement with their Financial Service Provider.
  • 78% said their business strategy will have to change to meet the challenges of improved customer experience
  • 87% of consumers feel they should be able to communicate and interact with Financial Services Providers quickly and in real time
  • 63% said more collaboration is needed between different customer-facing parts of the business

Whilst this research is based upon UK data the recent changes in regulation mirror that which we in South Africa are unpacking. The spirit behind the new and incoming legislation in respect of Treating Customers Fairly (TCF) and Retail Distribution Review (RDR) is to align an FSP’s purpose with that of the consumer – or client. In research undertaken in 2010, it was no surprise to discover that clients and FSPs when asked to list their top ten needs, only ONE of these needs were shared – Trust! The disturbing factor was that 9 out of 10 needs identified by the client were not on the top 10 list of the FSP! Most FSP’s will find themselves in a different reality to their clients. Don’t believe me? Just ask your clients?

That being said, having taken a little poetic license, the following are some factors to consider when focusing on customer engagement of the future.

  • Make sure your clients are profitable.
    • Have efficient communications processes in place
    • Understand Lifetime value
    • Optimise your client creation and retention processes
    • Optimise internal processes and communications
  • Grow your relationship with clients
    • Ensure you have a single view of a client’s complete history from communications to data
    • Be able to leverage real time data (business intelligence)
    • Be able to activate clients and enable them to activate the business.
    • Partner with the client – don’t exclude them from access.
  • Client segmentation is crucial for focused collaboration
    • Focus on the right clients for the right reasons
    • Segment client’s early. Early identification is essential.
    • Enhance your value proposition by giving clients access to value added services – on line and in real time!
    • Be able to monitor activity
  • Manage your risk
    • Be vigilant. For example, FICA testing is essential
    • Remember POPI – be respectful and compliant
    • Security of data is a real issue. Be aware and ensure backups of data.
  • Communicate! Collaborate! Communicate!
    • Use your single client view data to help focus on clients and client segments
    • Transparency is central to building trust. Your ICT solution should reflect this.
    • Automate where possible but collaborate everywhere!
    • Create contact opportunities systematically, proactively and collaboratively!
    • Ensure full record keeping of any collaboration, contact or change
    • Communicate your brand at every turn. No exceptions!

FSP’s will need to invest their time into developing client engagement strategies and
leveraging technologies that will support delivery and fulfillment of the new minimum service
standards of the future.

The time is NOW!

“To succeed, it is imperative to create immersive experiences for customers”
(Decisioning Vision).

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