4 Customer Experience Lessons Banks & Credit Unions Can Learn From Amazon
When Jeff Bezos took Amazon public, he informed the world that delivering the best possible customer experience was his primary objective. Just over 20 years later, it’s clear that his tactic of providing simple, convenient and engaging solutions that go that extra mile to ‘wow’ customers has paid off. Already having set the bar for customer experience high in everything from building Christmas lists to artificial intelligence, they’ve penetrated nearly every aspect of the lives of their customers. Now that the era of open banking is upon us, a Bank of Amazon seems almost a natural extension of their existing services. In fact, they’ve already inched their way into payments with Amazon Pay, and provided over $1 billion in loans to merchants on their marketplace. And it’s unlikely that Amazon will stop there. Considering that 65% of Amazon Prime users — 65 million people — would be willing to give the Bank of Amazon a go if they began offering service, this would mean serious competition for banks and credit unions.
The driving force behind this fierce loyalty stems from two decades of Amazon placing a singular focus on improving the customer experience. And it shows in their Net Promoter Scores (NPS). With a ranking of 47, they have a leg up on regional banks (31) and tower over national banks (18), but it’s not too late for traditional organizations. Many are now rolling out integrations with savings and management apps, authentication and security tools, and other self-service solutions. But to discover how to truly put the customer experience first, they should look to leaders in customer experience. And of course, that means Amazon. Below, we’ll take a look at 4 of the top lessons that banks and credit unions can learn from Amazon in improving the customer experience.
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1. Don’t Be Afraid to Lead
Perhaps one of the most difficult lessons for banks and credit unions to adopt, but certainly the most effective in having led Amazon to their success, is for them to position themselves as trend leaders. When looking to compete with digital fintech start-ups and challenger banks, it only makes sense that banks and credit unions need to come up with their own innovative customer experience solutions, rather than allow the newcomers (like Amazon) to do so first and then follow suit. That means listening to their customers, and acting quickly to deliver what they want in a way that provides a satisfying experience — before they realize they want it. This attitude of working to understand their customers and coming up with new ways to provide them with solutions to their problems and desires has been the driving force behind many of Amazon’s products and developments. Successes like Amazon Prime, Kindle and One-Click purchasing came about because Amazon worked hard to understand their customers better than any other company, allowing them to deliver on ways to improve their experience before anyone else had recognized the opportunity. All of this stems from moving the focus from trying to compete, to trying to better serve customers.
2. Take Advantage of Big Data
Banks and credit unions have more data than Amazon. But you wouldn’t know it. They know how much money their customers make, and where they spend it. They know everything about the big purchases that they made and how they financed them, and can get a clear view into the financial health of every single customer. And yet the vast majority of banks don’t take advantage of this data. At Amazon, data collection is built into the very core of the business. Understanding their customers is the key to not only providing them with the unique products and services that set Amazon apart, but in maintaining and optimizing the customer experience while delivering them. And that optimization occurs at a personal level. There is no cookie cutter delivery at Amazon. Amazon knows each individual customer intimately, and is fluid in how they communicate with them, so when their buying or browsing behavior changes, Amazon notices and adapts instantly. Using a centralized data hub that compiles information from a wide range of metrics, constantly updated in real-time, Amazon is able to continuously improve the customer experience, offering relevant products, at the right time, on the right page.
Banks and credit unions already have access to information on every single purchase, inquiry and financial service application that their customers make — they’re already halfway there. Imagine a world where a bank notices that their customer is spending more money than usual on building materials and home decor, recognizes that they are likely doing renovations, and proactively recommends a line of credit with marketing material specifically tailored to financing renovations. Or even a situation where a bank is able to provide financial advice outside of their own product offerings, such as noticing that a customer is spending high amounts for public transportation and suggesting they purchase an annual travel card to save money. These type of personalized recommendations is exactly what is currently bringing in 35% of Amazon’s revenue. It’s a proven driver for business and loyalty, and it’s well within reach.
3. Provide New Channels For Engagement
When it comes to embracing new methods for engagement, Amazon sets a very high bar. Not only can customers access Amazon on every device from their smartphone to their Echo, but they can also switch devices and pick up where they left off seamlessly, without having to log back in or re-input any information. And if they encounter a problem? Customer service is available on every channel. It’s the ultimate, effortless omnichannel experience. Most banks and credit unions already offer some form of engagement through online banking, mobile and contact centers, but there’s still a long way to go before they can reach the level of functionality and experience that Amazon has achieved, and more channels to explore. Allowing for the end-to-end digital opening of new accounts using a laptop, tablet or phone could remove friction from a previously arduous task. Providing voice access to balances, basic transactions and customer support through smart devices can do the same, as can mobile based video chat capabilities. And these all bring the added benefit of bringing greater opportunity for targeted cross selling. The key to successfully implementing these new channels for engagement is to ensure that customers receive the same 100% personalized service no matter what channel is being used, keeping in mind that any new channel should serve to augment — not replace — your existing channels. Of course, as touchpoints multiply, it becomes more difficult to provide this seamless user experience across all of them. If banks and credit unions are to add smart virtual assistants and third party channels to the mix, data unification is going to be vital.
4. Expand Your Offerings
A significant factor in Amazon’s success in providing customers with laser focused personalization and an enjoyable experience comes from the sheer breadth of their product offering. The company sells everything from groceries to hardware to children’s toys and everything in between, even offering their own line of products, including AmazonBasics, the Kindle and their Echo smart assistants — all of which are highly successful. But what really rounds out the offerings and sets them apart is the fact that their customers can also come to them for things they don’t offer. Anything that their customers may be looking for can (nearly) always be found through partner merchants on the Amazon Marketplace. The fact that customers know that no matter what they are looking for, they can likely find it on Amazon means that customers almost never need to shop elsewhere. And you can bet that Amazon will be looking at similar options when it comes to their eventual entry into banking.
By expanding offerings beyond traditional financial products, banks and credit unions can capture more market share in the same way. Through partnerships with other financial institutions and fintech companies with expertise in different solutions, they can avoid the cost and complication of building every product on their own. In doing this, they can become a central hub where customers can get all their banking services. Rather than subscribing to multiple services for investments, budgeting, transfers, payments and other fintech offerings, banks and credit unions can provide them under one roof. In this situation, customers are given choice without friction — no duplicate data entry, no integration or compatibility issues, no payments to multiple providers. All of the benefits to the customer experience that financial customers are already enjoying on separate platforms, brought together in one convenient ‘financial marketplace’, operated by and connected to the bank or credit union they already trust.
Eager to dive into the details on some of the most effective technology being leveraged by rising fintech companies in boosting the customer experience right now? Check out our previous post on the top 4 Fintech Innovations for Creating Deeper Connections.
Ready to learn more about upgrading your institution’s digital presence and capabilities to provide an incredible customer experience and boost revenue? For an in depth look on how to make it as smooth as possible for everyone involved, and how Coconut Software can help get you there, download our Ultimate Guide to Digitally Transforming the Appointment Experience.
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