Our Hunch about the home: The relationship you really need to win
Across most commoditised services, it is recognised that customer expectations are changing. According to Sales Force in their State of the Connected Customer report 2018, “80% of customers say that the experience a company provides is as important as its products or services”. The traditional model of customer ownership through single transactions is no longer acceptable. Financial service providers such as banks and building societies must place greater emphasis on developing enduring relationships with customers across an increasingly complex and elongated buying cycle.
Although this trend is not going unnoticed, providers continue to push individual products and fight highly competitive battles on price in order to win new customers but fail to properly optimise the experience of an existing, loyal base. By ignoring interactions outside of traditional touchpoints, they also miss out on a big opportunity to further monetise engagements. This narrow focus limits the customer experience, reducing how likely we are to stay with a provider, buy additional services and ultimately, pass on recommendations to friends and family.
So, how can providers build more intimate engagements, be the primary relationship holder, and deliver experiences that customers are prepared to pay for?
There’s no place like home
Your home is far more than bricks, mortar and a roof over your head. Whether owning or renting, it is the place you feel most comfortable, share your deepest feelings and is where real relationships happen. By recognising the home as more than a physical asset and a way to sell financial products, providers can harness the strong emotional resonance to unlock richer relationships with current and future customers. There are five main factors to consider when building home-centric experiences:
1. Readiness - Be the early helper
Buying a home or moving is one of life’s big decisions yet people remain in the dark about the process until they are in the middle it. The Office for National Statistics recently reported the number of young adults living with their parents is at an all-time high. Establishing early relationships with customers before they actively look at the market is an expanding and untapped opportunity for financial service providers. Readying customers through education and coaching months or even years before they consider purchasing a specific product will form the foundation for future purchasing decisions. Although there is no immediate revenue or guarantee of a future customer, it is a cost-effective way to gather a deep understanding of a consumer’s preferences and keep your brand front of mind when the buying decision eventually occurs.
2. Richness - Build relationships around real-life needs, not products
Financial products ddo not sit in isolation but occupy a small part of a consumer’s busy home life. To establish truly deep relationships, providers need to demonstrate how they can support customers in their real-life home circumstance. Today’s financial products often target the individual despite over 95% of UK consumers living with family members or housemates (Statista, 2017). By going beyond the individual, providers can offer whole home services to help plan, connect and protect the whole family or group as and when their circumstances change. Importantly, this will require a focus on developing partnerships and a network of services that enhance the overall home experience.
3. Reciprocal - Use your insights to inform customers not just yourselves
Consumers face an ever-expanding choice of services for their home and it’s becoming harder to make informed and objective decisions that work across their whole lives. This must go beyond meters and digital dashboards, towards sharing insights on how the home is performing and providing useful guidance and behavioural nudges to improve. Consumers are happy to share their personal data but only if they know what they get in return, according to Salesforce more than half of consumers are willing to share data if there is a clear benefit in the experience. Providers that build a relationship based on sharing and trust can help consumers frame choices in more intelligent ways and offer more valuable services.
4. Real-time - Be proactive, continuous and on-demand
Providers must move away from one-time interactions causing a cold start at every product renewal. Instead, they should continuously engage customers, using insight to steer their future planning and decision-making cycles and once they are customers, ensure they are not forgotten. Providers need to strive to stay front of mind through the provision of real-time information to help customers adjust to life-changing circumstances. The on-demand economy has seen consumers increasingly expect services to be sold and provisioned in real-time and providers must seek to deliver on this to stay ahead of new, agile competitors.
5. Relevant - Tailor to be truly sticky
Selling one-size-fits-all, set and forget financial products to consumers in and around their home is a sure-fire route to irrelevance. Creating sales cycles, products and services that learn and adapt to a customer’s specific needs is crucial. Personalising the experience is the hardest yet most effective way to move beyond being ‘useful’ towards truly delighting customers meaning they are more inclined to buy services further down the line.
Winning in the home
Relationships in and around the home are the future battleground for financial services and providers that can establish, nurture and protect a role as the primary relationship holder will win. Through deepening this relationship, providers will gain better access and an understanding of their customers to deliver real, personalised and genuinely useful services. They will become the go-to provider and will be trusted to aggregate more a home’s services.
This is not going to be an easy journey but having a vision for the type of engagements they want to build will guide the early steps to becoming an integral part of people’s homes.