Lessons From Facebook: Why “Personalization” Is Not Enough
Facebook, the godfather of all the social media apps that have become ubiquitous in our society today, just recently turned 20 years old. I am sure Mark Zuckerberg never imagined in those early days that what started as a simple platform to make it easier to connect fellow Harvard students would one day become one of the largest businesses in the world (currently the 7th largest business on the planet). So, what is their business model today? While they still help people make connections, the business model is advertising where they generate 98% of their revenue. And what makes them so attractive to advertisers today? It is their ability to deliver the full power of Personalization. By mining untold levels of personal data and using highly sophisticated algorithms and analytics, Facebook enables advertisers to spend their ad dollars more efficiently by targeting highly qualified potential buyers. So, a travel agency that might have purchased ad space in Conde Nast Traveler magazine 15 years ago to reach a broad audience can now focus on very specific client niches. Now the same agency can target couples that are considering a vacation in Italy on the Amalfi Coast in late May based on their search histories and other data.
So How is This Relevant to Retail Banks and Credit Unions?
So let me make the connection to Retail Banks and Credit Unions. In banking today, one of the big buzzwords is “Personalization” – using customer data to deliver more personalized Customer Experiences. Organizations able to invest in data mining and AI strategies can gain a competitive advantage, developing more targeted marketing campaigns and “Next Best Product” offers that are pushed to bankers, or even directly to the customer. But is Personalization enough to drive growth or should we be focusing on something more? While unprecedented advances in technology have transformed our lives, we are still human beings whose actions are more often driven by emotion than they are by logic. While Personalization is powerful, the true goal should be ENGAGEMENT.
The Difference Between “Personalization” and “Engagement”
Personalization is about targeting customers based upon facts- credit card usage, deposit balance trends, net worth, etc…. Engagement is deeper- it is about developing an emotional connection with a customer. Facebook is one of the most sophisticated data operations in the history of the world. While they certainly know how to deliver targeted advertisements and content, how well do they really KNOW YOU? Do they know the people that are truly important to you beyond your 783 Facebook friends? Does Facebook really get you? If you are like me, the answer is no. They certainly deliver an experience that is highly personalized, but I certainly do not feel ENGAGED.
We feel the same is true today in banking today. Just like your “Facebook Experiences,” they are personalized, but can even the most sophisticated data mining really create human engagement? The key is maintaining balance, capitalizing on the power of technology to deliver Personalization while empowering frontline Bankers with the tools and skills they need to create true emotional Engagement with customers every day.
Is Creating Customer Engagement an Opportunity for You?
To help you understand if a Customer Engagement Strategy could produce results in your organization, consider these questions:
- Are your bankers effective at converting a portion of transactional interactions into deeper financial wellness focused conversations?
- Do these conversations deliver true value to your customers, helping them define the one or two things they want to focus on to improve their financial lives?
- Are you capturing this important customer data seamlessly so it can be leveraged to empower better future engagements?
- Are your bankers delivering this experience consistently and at scale across your footprint?
Keys to Developing an Effective Customer Engagement Strategy
If you feel you may have gaps at your organization when considering these questions, you are not alone. To learn more about how to create Customer Engagement, either in the branch or virtually, schedule a 30-minute demo below.
