How an Xrm Strategy Increases Customer Loyalty in Financial Services

Enhancing Customer Loyalty with XRM in Financial Services

By John Federman, CEO at JRNI

The experience economy is here, and that means, as McKinsey & Company puts it, that customers don’t want to just buy products and services anymore, they want to buy into an experience.  

Experiential relationship management – or XRM – is the process of managing personalised experiences at scale.  For all financial institutions, an XRM strategy can help deliver the experiences customers not only want, but expect. The types of experiences that turn a customer into a loyal customer. And doing it right means that banks and building societies need to provide unique experiences, offer human-to-human connections, build personalised relationships, and do it all at scale.

An XRM strategy lets financial institutions put the customers at the forefront – here are three ways building an XRM strategy will help increase customer loyalty: 

A customer-first approach

The acceleration of digital transformation during the pandemic presented both opportunities and challenges for financial institutions.  The additional digital options driven by technology gave customers and members more options than ever before, but also increased their expectations for seamless omnichannel experiences.

Customer-centricity is nothing new – but it is something that should remain core to all banks and building societies.  Every aspect of business and every experience provided should be centralised around the idea of how to exceed customers’ expectations. By making it a goal to uncover the unmet needs of customers and thinking of ways to make them happier and more loyal, financial institutions can truly deliver an exceptional experience that will increase customer retention.

One of the ways to uncover these needs is through comprehensive customer data. Data is the key to transform customer engagements into personalized, memorable experiences.  Using analytics allows banks and building societies to develop insights on customer segments and behaviours to more precisely target and tailor products and services. 

There is a wealth of data that banks can track.  Banks collect a lot of information during various customer interactions – from the profile data they collect at their branches to observed engagement data. From marketing campaigns to digital product offerings, the omnichannel banking world creates several touchpoints to consider. Banks also measure experience data, which they use to identify areas for improvement.  Experience data helps really understand what kinds of interactions drive customer satisfaction and dissatisfaction. It helps prioritise where banks need to make changes.

By embracing data across the entire customer journey, banks can focus on improving both the customer and employee experience while simultaneously improving business outcomes. Looking at ways to improve efficiency and creating highly personalised experiences enables several business benefits. From improved customer acquisition and higher customer lifetime value (CLV) to reduced operational costs and lower risk, measuring the right data translates into more informed decision making.

All of this makes customers feel that they are understood on a deeper level. There is so much value that can be derived from diving into your data and using it to arm your staff and business with the knowledge to personalise at scale.

Enabling human-to-human connection with technology

The increase in digital transformation over the past year has certainly changed consumer behaviour, but the one thing that hasn’t changed is the need for human-to-human connection. Human-to-human engagement is one of the keys to an XRM strategy and is the main reason it will help increase customer satisfaction and customer loyalty.

With this need for human interaction, which is more important than ever, customer experiences need to be driven by tech but powered by humans. When banking experiences are personalised with a human element, financial institutions see the benefits of increased account openings, stronger customer relationships, enhanced experiences, and improved customer loyalty.

Online video conferencing capabilities are now empowering retail banks to give their customers high-value face-to-face time to discuss some of life’s most significant financial decisions.  A mortgage advisor can now share documents online, and customers can sign those documents while on a video call. This makes the process more efficient and flexible, and has had a massive effect on uptake.

Flexible appointment choices from virtual technologies enable banks to reach a wider customer base and, through collecting data and personalising offerings, build a closer relationship with different socio-economic groups. This opens up significant new markets and audiences for banks with consumers who would not traditionally have been customers. 

Embracing technology to enable digital transformation at scale is crucial, but businesses need to keep humans at the centre of it. With artificial intelligence, chatbots, machine learning, and more – it’s even more important to have this focus on the human-to-human element. Because as much as we love technology, the truth is that most consumers want more interaction with a real person as technology improves.

Having the right technology in place will enable the human aspect of your interactions at a new level. A strong XRM strategy and the right XRM platform will help banks and building societies keep the focus on customers – humans who want to purchase products and services from other humans. Humans who want real advice from other humans on the things that matter most to them. With the right technology, financial institutions can get to know every customer on a deeper level, giving them the human connection they crave.

Innovative and memorable experiences

An XRM strategy is also about thinking outside of the box. It’s about finding ways to connect with customers in ways that are not only positive, but memorable. Creating an experience so unique that customers will not only become committed and loyal to a particular brand but will share their enthusiasm with their friends, family, and peers.

As many banks and building societies focus on how they can better personalise their experiences, there is an interesting new movement that focuses on measuring return on experience (ROE) versus return on investment (ROI). This focus is to ensure customer experience is a prominent aspect to everything banks track.

As well as the data points that they would normally track and measure, financial institutions need to look at the experience itself, and see what they are providing. Continuously measuring data points such as time to market, customer satisfaction, acquisition costs, how costly is it to gain customers, etc., allows banks to see where they can improve upon the experience they offer.

XRM allows companies to build a customer experience based on individual needs and preferences. It’s all about personalisation – and finding an XRM platform that provides in-depth but easy-to-digest analytics data will help create the types of experiences that keep customers coming back for more.  If financial institutions aren’t already using the power of their data, providing human to human connections, creating memorable experiences and prioritising personalisation, then it’s time to start. The experience economy is here – and the banks and building societies that are going to thrive are already implementing an XRM strategy.