Interested in cutting customer service costs by 30%? Let’s chat!

Robots have been demonized for a long time. And understandably. Hard to believe, but it’s been 50 years since HAL, the spaceship’s computerized brain, threatened to kill the Discovery One astronauts in the film, “2001: A Space Odyssey.”  It’s one of the earliest films that I can remember that warned us about how Artificial Intelligence could very well be “an experiment gone horribly wrong.”

In years since, robots have continued to be characterized as malevolent, destructive, and emotionless job-stealers. Manufacturing jobs would disappear as robots could work much more efficiently, safely, accurately, and less expensively than human beings.  In the meantime, their view of the world -- one of course where robots ruled -- would supplant that of their creators. They would then revolt against the human race and take over the world.

My, how times have changed. The kind of thinking (aka Artificial Intelligence) that made HAL a monster is exactly the kind of thinking that today’s community banks are utilizing to supplement their service to customers.

Until now, customer service was largely built on human interaction. Whether a mega financial institution or a community bank, the standard for quality customer service is extraordinarily high. Customer service representatives must be patient, efficient, knowledgeable, and quick to address customer questions, concerns, and complaints. Maintaining this high standard is labor intensive, and certainly not cheap. And during these pandemic days, finding and keeping individuals who can deliver this type of service has become almost impossible. So, say hello to CHATBOT!

Okay, what exactly is a chatbot? The latest tactic in “conversational marketing,” a chatbot is a “software robot” that chats with customers on your various customer experience touch points such as websites, messaging apps, and devices. A chatbot mimics conversation through text (e.g., 1800flowers.com) or voice (e.g., Alexa). If you’ve just spoken to your Google Assistant, well, you’ve just chatted with a chatbot. So, are people really using chatbots?

Absolutely, and there’s plenty of consumer research to prove it. Recent research from Survey Monkey and Drift show that “only 38% of consumers actually want to talk with a human when engaging a brand. This isn’t to say they always prefer chatbots, but it highlights just how many ways there are to get answers today that don’t involve live human conversation — text messaging and self-service portals, just to name a few.”

Chatbots can learn and evolve, as well. IBM’s Watson, for instance, “uses machine learning algorithms and asks follow-up questions to better understand customers and pass them off to a human agent when needed.”  Pretty clever, isn’t it?

According to an August 13, 2021 article by tech consulting firm, CapTech, “back in 2019 40% of consumers in the U.S. were using chatbots to shop with retailers. In addition, 77% of customers said chatbots will transform their expectations of companies over a five-year span.”  The article goes onto say that “aside from meeting consumers’ needs… there are other advantages to chatbots… Businesses spend over $1.3 trillion per year to address customer requests, and chatbots could help reduce that cost by 30%. In fact, virtual customer assistants help organizations reduce call, chat, and email inquiries by 70%, while 90% of businesses report recording large improvements in the speed of complaint resolution.” 

According to a Juniper Research study, healthcare and banking industries in particular, which manage large volumes of human interaction, are set to benefit most from the AI-driven chatbot technology. “We believe that health care and banking providers using bots can expect average time savings of just over 4 minutes per enquiry, equating to average cost savings in the range of $0.50-$0.70 per interaction.”

In closing, a chatbot might seem like a small contribution to your ability to service customers, but there are certainly big benefits to be realized for the banks that use them. Just be careful if it starts asking for a salary increase and better benefits…


About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.


What A Small Town Taught Me About Artificial Intelligence.

As a community bank, nothing is more important to your success than understanding your customers and delivering value. What’s different today? There was a time when understanding your customer’s needs and overall financial behavior was, well, easy. Unfortunately, that’s simply not the case anymore.

For a long time, community bankers achieved this customer insight by interaction. If you’re old enough to be reading this, and grew up in a small town, I’m sure you remember. I do because that’s how I grew up.

You’ve seen “It’s a Wonderful Life,” right? Remember when Potter questions the loan that George has approved for Ernie, the cab driver?  “I can vouch for his character,” George tells Potter. Having grown up in a small town, not terribly unlike Bedford Falls, I had a very similar experience myself… many of them, in fact. When I was ready for my first car loan at age 18, Mr. Jepson, the kindly gentleman who ran our local community bank, didn’t need me to fill out a loan application, survive a host of credit checks, or have a bunch of agencies confirm that I wasn’t a criminal. He knew my parents, my grandparents, and all my family. He knew I had a steady job at the IGA grocery store, was headed off to college and was in church on Sundays and Wednesday nights! He knew all about me.

Those days are gone. Vouching for someone’s character just isn’t an option anymore. With online and mobile options, customers are no longer walking into their local branch and doing all their banking there. The insights that bankers need, that they used to get by interaction, are tough to get. Instead of that personal interaction to gain those insights and act upon them, bankers are now relying upon Data, Artificial Intelligence (AI) and Machine Learning (ML) technologies.

This past January, Business Insider talked about the tremendous impact that AI can have on a bank’s customer experience. “Banks can use AI to transform the customer experience by enabling frictionless, 24/7 customer service interactions.”  The Insider goes onto say that banks can, and are, “using AI to deepen customer relationships, and provide personalized insights and recommendations.” Thus, artificial intelligence is now gathering and analyzing the data that a banker’s “real” intelligence once gathered and analyzed in order to know the customer. Today, without personal interaction, that customer is a “persona,” an AI/ML-generated individual who can be used to predict behavior and personalize an experience.

Creating personas is nothing new and unfortunately in a pre-AI/ML world, have been developed using assumptions and/or simply on past actions such as purchases. The drilled-down insights that AI/ML provides can help bankers develop a far more accurate picture of their customer’s identity and behaviors. Forbes, in the article, “10 Ways AI Can Improve Digital Transformation's Success Rate”, states that, “using AI to better understand customers, personas need to be the foundation of any digital transformation initiative. The most advanced uses of AI for persona development combine brand, event and product preferences, location data, content viewed, transaction histories, and, most of all, channel, and communication preferences.” In short, you not only know the “what” about your customer, but the “when, where, why, and how,” as well. 

Despite its necessity, the implementation of these technologies in banking is still something that most banks are “planning for.” Why has this transformation in customer data management taken so long?  The legacy data solutions that are so pervasive in today’s banking industry cannot be transformed quickly, easily, and inexpensively. As a result, a growing number of community banks have looked to multiple core and edge systems for gathering, analyzing, and reporting. The integration of these systems, though, is time consuming and costly. So time consuming, in fact, that it’s quite possible that the data gathered can be obsolete by the time the integration is complete.

Through these advanced consumer profiles and AI/ML’s predictive analytics, you’re far better equipped to reach the right customer in the right place at the right time with the right message. It’s almost a return to those Bedford Falls days, when you knew the cab driver well enough to approve a loan app based on knowing his character… but, not quite. Unfortunately, “personalization” through technology will never be the same as personalization through personal interaction. But, this is the world in which we now live.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. To view our campaigns, visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.


What Banks can Learn from Caramel Colored, Carbonated Water

All the talk these days seems to be about digital transformation and offering a personalized digital banking experience. Or, on the in-branch side, the need to offer the kind of personalized, financial guidance that people simply won’t find with non-traditional institutions, such as digital only banks. It seems to be all about services; that the only way to win and keep customers is by offering them products and services that are better than the competitor’s. Which, as a former ad guy, leads me to ask this question: What happened to branding? 

To answer it, I invite you to take a time-machine spin back to 1985-86, which was the height of what was then called “the cola wars.” The warring factions? Coca-Cola USA and PepsiCo. Coke and Pepsi were at the time, and I believe the same holds true today, within a point or two of each other in terms of market share. The soft drink market, at the time, was a $26 billion market, and the two giants battled it out by spending hundreds of millions of dollars, largely on television. If you’re too young to remember, it was kind of fun to watch. Brand image campaigns were supplemented by “taste test” commercials. Oddly, but not surprisingly, both sides claimed to win these taste tests, which only added to the fun… and confusion.

Back then, Coke’s brand position was “Always Coca-Cola” while Pepsi went with “The Choice of a New Generation.” Coke watched as Pepsi, making use of superstar athletes, actors, and musicians as endorsers, began to grab that much-coveted target audience; the pre-teens who were “transitioning” from juice drinks to soft drinks.  You see, it was (and still is) common knowledge among those in the soft drink biz that cola drinkers are some of the most brand loyal on the planet. So, winning that pre-teen was (and still is) critical to a soft drink’s success.

As Pepsi earned the loyalty of these just-starting-to-drink-cola youngsters, the folks at Coca-Cola, of course, began to panic. Their solution? To develop and market a product that could better compete with Pepsi. Makes sense, right?  What happened afterward, however, didn’t. The decision was made to take the current Coke product off the market and replace it with this new product; one that, with a re-formulation, would taste more like Pepsi… less carbonation with a bit more sweetness. This “new” coke would be called “New Coke,” a cola that would hopefully appeal to the younger market by offering them “the great taste of Coca-Cola with the sweetness of Pepsi.” Unfortunately, Coca-Cola was somehow ignoring another critical market: Their current, brand loyal customers.

On July 20, 1986, the New York Times published an article entitled, “Keeping New Coke Alive.”  The article described just how difficult a time Coca-Cola was having with the new product.  At the time, McDonald's, along with Denny's, "several other fountain customers," and many of Coca-Cola's bottlers wanted nothing to do with New Coke. Coca-Cola Classic, the new name for the old cola that New Coke was supposed to replace had, in less than two years since New Coke's launch, outsold New Coke by a margin of more than 4 to 1. Ironically, the brand that Coca-Cola had sought to shelve saw record sales and profits with the New Coke launch with revenues climbing almost 20%.

So, why do I think that this anecdote is relevant to today’s discussion about services, digital transformation, AI-driven user experiences, etc.? Because what those of us in the banking industry need to remember is that while the products and services we offer are important, so is building and supporting the brand.

Fast forward to the present day. Marketing pundits now frame it this way: “No one cares what you do. They’re only interested in why you do it.” A superior digital experience is important, and so is in-branch financial advice, but consumers consider more than just features when choosing a brand. In the ABA Journal article, “What are you doing about customer loyalty?” author Phil Seward had this to say: “In the digital age, financial services providers have seen the industry drastically change due to an increase in competition from non-financial institutions. Technology organizations are embedded in consumers’ daily lives, and pride themselves on putting the customer experience first and foremost. This expectation of an enhanced customer experience has made it harder for traditional banks to break through the noise and remain top of mind, putting them at risk of losing customers. Building brand loyalty can be a powerful way to influence customer behavior and enhance the bottom line.”

Look at Coca-Cola. The company had created such powerful brand loyalty for Coca-Cola Classic that when they tried to replace it with something new and improved, Classic came back stronger than ever. Classic's brand was so strong, that New Coke never had a chance and taste wasn't even a consideration; it was all about a brand with fans, a brand that, nearly a century old, people knew and loved.

So, what can banks learn from the cola wars?  Know, and love, your audience. Build your brand around these individuals. Supplement your product/service messaging with consistent messaging that reinforces “why you are,” instead of what you do.  Constantly remind your customers how important they are to you. Build a strong brand by building strong relationships. Do this and, like Coca-Cola Classic, your brand will be well prepared to defend itself from any attack.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.