All Talk And No Trouser?
‘Touchpoints’ – opportunities to interact directly with a customer – are a favourite buzzword in retail banking. There’s a lot of discussion over the new school of mobile-based touchpoints, but there are still doubts over much potential they have to affect the bottom line.
Can mobile touchpoints make a real ROI difference, or are they innovation for the sake of innovation? We look at three key technologies, and tell you whether we think they’re a flash in the pan, or the start of a revolution.
Beacons, Bluetooth and Lightbulbs
Beacon technology is probably the biggest and best known method of creating mobile touchpoints. It provides the ability to ping customers’ phones as they enter a branch with offers or information, or to advertise on mobile in non-branch locations such as airports or trains stations.
But while the technology has popped up in a few places – largely retail stores – banks haven’t been quick to implement it. Asking why, we’ve been told by innovation heavyweights in retail that for the technology to deliver worthwhile ROI, the IT infrastructure cost has been high – and that trials haven’t been successful, even when the notifications are heavily tailored to the individual receiving them.
A major hurdle has been a very simple one – for beacon technology to work, users need to have the Bluetooth on their phone switched on. And often they don’t, either to conserve battery or simply because they don’t need it.
Newer beacons by Phillips offer a solution to this, with their Visual Light Communication (VLC) light bulbs transmitting both the user’s location to the store’s server, and notifications and offers in the opposite direction (they light the store, too). This technology excludes the need for Bluetooth, but it does require the phone to be be visible to the special Phillips lightbulbs.
Mobile phone based point of sale technologies – think Apple Pay – could represent a significant step forward in touchpoint ROI. Theoretically, a notification can be sent to a user’s phone during the checkout process, offering instant credit for the purchase via pre-approval. The user could even get the option of taking up the offer days or even weeks later.
Appealing more to impulse than traditional mailings, this method offers a frictionless loan purchase process. It could potentially be a powerful sales method for retail banks – yet none have yet implemented this type of service, mostly because the most popular mobile phone payment services don’t offer this functionality.
There’s no way to bundle this type of technology into Apple Pay, Android Pay or Samsung Pay. It can only work if banks themselves offer an equivalent digital wallet – and get their customers to use it. And while it hasn’t happened yet, that’s not as crazy as it sounds – banks’ own wallet apps have the potential to include more advanced functionality than Apple or Google’s offerings.
The Retention Potential
Most major banks already offer reward programmes to help with retention and relationship building – but they’re often buried on websites or apps. It’s less cumbersome and more convenient for customers to receive the offers and benefits that suit them, at the precise moment they might find them most useful – and extra touchpoints mean this is achievable.
Say a customer visits Starbucks every day. Via analytics, their bank knows this – they are actively monitoring for customers who regularly visit Starbucks, as they have a relationship with them to provide customers with discounts on coffee. Starbucks, in turn, have beacons inside their store that have been configured to identify that bank’s customers. When the customer visits Starbucks, the bank is able to send a notification to their phone, offering 50% off their coffee that day.
For the customer, the process couldn’t be more seamless – it’s a nice surprise, with no effort or strings attached. For the bank, it offers a significantly more effective route to gaining more value from the rewards that they’re already offering. But right now, nobody is doing it.
Banks Need To Be Bold
Touchpoints can provide a route to increased sales and increased retention, but it’s going to require a bolder, more experimental approach to customer experience.
It’s key that the approach is evolved quickly. No one has yet cracked the mobile touchpoint conundrum fully, and it’s unlikely that anyone will on the first try. A nimble, startup-style approach will be the way forward – and maybe it’s easier for the big banks than they think.