Financial Services Firms Using Emotional Connection to Improve Customer Experience and Generate Growth

by PaymentsJournal 0

Motista report shows that institutions moving beyondsatisfaction rankings to forge an emotional connection with customers can growlifetime customer revenue by 600 percent

San Francisco, CAApril 5, 2017 — Financialinstitutions have consistently improved the customer experience with newproducts and services geared toward an audience looking for more digitalalternatives. But with the entire industry shifting towards a moreconsumer-friendly business model, differentiation has been a challenge. Newresearch from Motista, the leader in predictive intelligence for EmotionalConnection, indicates that while a good customer experience no longer is a differentiator,those institutions which understand and act on the emotional connectionconsumers have with their financial institutions are more likely to experiencepredictable and sustainable growth.

Motista’s findings areavailable in a newly-published white paper titled “Making the Emotional Connection: How FinancialCompanies Are Harnessing Customer Emotions to Generate Growth.” The whitepaper explains how companies in finance – from retail banks and brokerages tocredit card providers and mortgage lenders – are driving growth by betterunderstanding and quantifying the human experience of both existing customersand potential clients.

Emotionally Connectedcustomers driving predictable growth

Emotional connection leads to higher value across all keysectors of consumer financial services, according to the research.

RetailBanking: Based on Motista data from 60,000 retail banking customers, EmotionallyConnected customers hold 20 percent more products with their banks than docustomers who say they are “Highly Satisfied,” have a 78 percent lowerattrition rate, and consider their bank as their primary bank 32 percent moreoften. As a result, Emotionally Connected customers produce nearly six timesthe lifetime revenue of Highly Satisfied customers.

MortgageLending: Based on Motista data covering 20,000 mortgage lending customers,only 12 percent of Highly Satisfied customers are willing to pay higher ratesand fees for future loans, while 68 percent of Emotionally Connected customerswill do so.

CreditCards: In a study of 40,000 customers of U.S. card issuers, Motista foundthat Emotionally Connected cardholders generate nearly eight times the lifetimecard spend as Highly Satisfied cardholders. They complete 71 percent more cardtransactions, spend 46 percent more with their cards every year and use theirprimary cards 29% more often.

InvestmentBrokerage: Compared to Highly Satisfied clients, Emotionally Connected clientshave a 71 percent lower attrition rate, are six times as likely to consolidateassets and recommend their firm twice as often.

“Financial institutions are strugglingto move the needle on growth while striving to become more customer-centric,”explains Scott Magids, CEO at Motista and a co-author of the paper. “They’rejust starting to discover the importance of emotional connections, which are underlyingmotives of lifestyle affirmation or social goals, and how those connections canbe quantified to predict financial value.”

Emotional connectionin action

“Every financial institution wants a highly satisfiedcustomer, but in today’s competitive environment, that’s no longer enough,”said Magids. “Our research shows that across all categories, an EmotionallyConnected customer generates 52 percent more annual value than one who is justHighly Satisfied.”

A top-ten U.S. bank sought to raise the effectiveness of itscross-sell efforts, understanding that traditional strategies such asincreasing customer satisfaction and building brand awareness were merely tablestakes needed to stay in the game, and no longer gave them an edge over thecompetition. The bank identified a $300 million to $475 million annual revenueopportunity associated with monetizing Emotionally Connected customers andincreasing their number.

Focusing on the right emotions allowed the bank to betterpredict higher cross-sell, revenue, retention and lifetime value. In the twoyears after the bank’s emotional connection program began, average productsheld increased 26 percent and average annual revenue per customer jumped 34percent, to $1.6 billion from $1.2 billion.

“The financial services industry is facing more challengesthan ever,” said Magids. “Differentiation is narrowing, and even strong brandsare finding it difficult to grow revenues. By understanding the emotions behindcustomer behavior, we have seen that financial institutions are able to betterserve their customers, grow revenues faster and more predictably, and roll outthe type of products that suit their customer base best.”

Rather than being a science that is sterile and statistical,the predictive analytics based on customer emotions reveal the best strategiesfor deep human connection that drives customer value, based on an understandingof often-unspoken social aspirations and emotional needs.

In financial services as well as other industries, individualfacets of the customer experience can resonate with the specific emotions thatunderlie behavior. The Motista approach recognizes the complexity ofindividuals and segments – not to mention the financial marketplace – and focuseson the particular emotions that motivate the most profitable customers atcritical points in their journey.

Please visit http://www.motista.com todownload a copy of Making the EmotionalConnection: How Financial Companies Are Harnessing Customer Emotions toGenerate Growth.

About Motista

Motista enables businessesto accelerate growth by activating Emotional Connection. Founded in 2007,Motista’s clients include Fortune 1000 B2C and B2B companies in the consumerpackaged goods, financial services, retail, hospitality, healthcare,technology, personal care, and consumer electronics categories. Usingproprietary data and analytics, Motista has scientifically mapped the genome ofhuman emotions and identified those most predictive of profitable behavioracross dozens of categories. Through an analytic, data-driven approach, Motistaprovides The Emotional Connection Lens™, which informs strategic andoperational investments to accelerate financial growth. To learn more, visit http://www.motista.com.