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Data Analytics Help Banks Adopt a Market-Back Approach for Customer Service

At Pitney Bowes, we are transforming our strategy from a product-forward to a market-back approach. We want to really understand our customers and their challenges, allowing us to provide better service, create higher value, and further grow our relationship with them. With this experience we have gained some great insight about using analytics to do this that can be shared with other organizations who are reconsidering their customer service approach.

We believe that banks, in particular, may see some substantial benefits from a market-back approach. Consumers are becoming more sophisticated shoppers and expect more personalized solutions – research from Forrester has revealed that one-third of U.S. adults would consider switching financial providers if another firm offered a better banking bundle – and a market-back approach can help create that customized service by informing which bundles would be most impactful to bring to market.

For instance, a recent survey from Market Rates Insight found that less than 10 percent of community bank customers use emerging financial services such as prepaid reloadable cards or low balance alerts, though 52 percent of people expressed an interest in them. These are underutilized, emerging services that may be experience slow uptake, but customers want them – so clearly there is incentive for banks to heed this information when designing their next products.

As we discovered at Pitney Bowes, this strategy doesn’t mean overhauling the way that the business is run. Instead, it just means leveraging all of the customer data that organizations already have at their disposal.

The Customer-First Approach

Developing a market-back strategy means thinking like an anthropologist. Essentially, that means taking a hard look at past consumer habits, short-term goals, aspirations and constraints. From that understanding is where banks will unearth their next great product or offering.

When one can identify previous trends, it’s easier to predict future ones. By knowing the demographics of their customers – and how, what and why those customers purchase – institutions can develop meaningful solutions that align with those customer needs. This is where data comes into play, because banks can build customer profiles and gain actionable insights that can lead to new innovative offerings. One tool that we use at Pitney Bowes to uncover this information is analytics software, which helps segment customers based on purchase/service behaviors and both observed and inferred channel and communication preferences.  Understanding these relationships is key to ensuring customers are always given relevant offers.

The Neighborhood is More Than Just Zip Codes

While a customer’s zip code identifies the neighborhood where he or she lives, that area can also provide insights about the likely customer segment, alternative provider options, expected behaviors and banking needs. Defining neighborhoods by their customer use cases can help banks determine what new product or service would be best for that location. What’s going to work with the customers who visit a retail branch in a city? How about those who stop at an ATM in the suburbs?

With analytics in hand, it’s possible to proactively create the solutions that are right for each customer segment. Maybe one neighborhood would benefit from a new retail location. Maybe another would do better with an ATM. Another is best served by mobile offerings that need to be advertised through specific channels.  By monitoring adoption in the context of customer use cases, it’s possible to adapt strategies to take advantage of changing behaviors as they are happening.

Market-back approaches are focused on creating value for the end customers. There are a number of partnership opportunities with other providers for banks to do this. By leveraging customer profiles to understand customer needs, it’s possible to identify what types of complementary products and services different segments may want. A natural fit for branch locations serving time-stressed populations, for example, could be the addition of a mail kiosk for supporting outbound parcel shipments or inclusion of an office to get tax advice and file a tax return. Partnerships can diversify the solutions that institutions can offer and bring to market, therefore giving customers more services that fit their needs.

The key to success in a market-back approach is to develop strategies for creating value for your customers and focusing on continuous learning from these value-creation efforts.  Learning requires ongoing data collection, analysis, and measurement. These learnings are key to adapting strategies and tactics to align with offerings with customer needs and goals.

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