 Kimberly Collins Analyst Gartner Group melissa.hennesey@gartner.com |
Q. How do you balance collecting customer data and privacy in financial services? Many banks are reconsidering their use of customer information to support marketing, sales and service activities. The question is not whether to use customer information, but how it can enhance customer relationships. With concerns regarding privacy issues and regulation growing, a bank must develop enterprise-level privacy policies and practices that regulate the use of customer information across the enterprise and between affiliates. Some banks may consider not using information at all to support marketing, sales and service activities as a viable option. However, not using information would be a self-defeating mistake. The key is to convince customers that they can gain value from the analysis and use of their information. Banks must demonstrate that value across service, marketing and sales. Service: Banks must use customer information in a way that optimizes service to the customer or risk losing customers to competitors who provide better "individualized" service. When establishing new accounts, banks should clearly state to customers the value of using their information to respond to their service needs, including a specific list of the benefits customers will receive from the use of their information and which bits of customer information can provide valued service. Marketing: Ideally, the promotion that reaches customers should be one that could be considered even if they do not accept the offer. The key then is to finely segment the customer base, approaching that ideal segment of one. This fine targeting of customers will require a great deal of customer information. A bank must convince its customers of the value they can receive if they allow the bank to use their information for marketing purposes. The value must be proven repeatedly through marketing messages that are relevant to customers, and are presented at the right time and place. Sales: Having information at the close of a sale can help a bank make better pricing and product decisions that are valuable for both the customer and the bank. Banks should define for customers the benefits of having their information during the sales part of the process, providing value to customers so that they will continue to want to share their information across the enterprise. The key to making the use of customer information valuable to a customer is delivering the right service message or product offer at the appropriate time via that customer's preferred point of contact. Rigorous analytical techniques and methodologies, combined with automated workflow technologies and employee training, will increase the chance that messages are appropriately targeted to customers (see Note 5). These highly targeted, personalized messages must be delivered consistently across multiple touchpoints. Increasingly, these messages will need to be delivered in real-time. Through 2003, more than 65 percent of banks that develop effective policies enabling them to convince customers to use their information, but fail to provide customer value for service, marketing and sales, will risk meeting the needs of customers in one out of four customer experiences (0.6 probability). Bottom Line: Ultimately, banks that provide value to customers through the use of their information will be in a position to obtain opt-in should it become required by law. Through 2003, more than 75 percent of banks that do not follow privacy policies enabling them to convince customers that they will receive value from the use of their information will fail to provide an optimal customer experience or develop customer intimacy (0.6 probability). |