By Ray Birch
SCOTTSDALE, Ariz.—It's never been more important for credit unions to be able to sell digitally, says one analyst, who points out that just because an organization offers products online and via mobile does not mean it’s “selling” digitally. Also key: CEOs need to get involved.
“Digital selling is extremely important because the majority of all of us—not just Millennials—start the buying process digitally,” said Cornerstone Advisors Senior Director Sam Kilmer. “So, it's extremely important that we be good at, but it's also very hard to do well.”
With the rise of mobile and digital-first consumers, the lines between marketing, sales and service have blurred, said Kilmer.
Scramble to Adjust
“Some banks and credit unions are trying to adjust through organizational change, including the invention of new roles like digital sales officer, chief experience officer and chief banking officer,” he said. “Others are adjusting through delivery plans that mash up traditional strategic and tech plans. But all FIs are faced with a changed buying process that is less of a linear pipeline with organizational handoffs and more of an ongoing cycle with organization-wide care and feeding required. And all banks and credit unions are faced with developing and retaining the talent to excel in this new converged environment.”
As customers and businesses increasingly consume digitally, financial institutions must focus their content and delivery on “retention,” said Kilmer.
“Leaders are moving from salesy brochureware to more knowledgeable, interactive and compelling content,” Kilmer explained. “With delivery, leaders are increasingly using a more analytically informed, digital-first approach. In online, mobile banking or marketing platform systems, timely and relevant offers are early-stage examples of leveraging analytics for the digital-first buyer.”
Birds of a Feather
But timely and relevant offers from FIs are more talk than action right now, according to Cornerstone’s managing director, Jim Burson.
“It’s still largely email campaigns and traditional birds-of-a-feather marketing. More targeted efforts are happening like contextual offers within bill pay or geolocation within mobile, but there is a continued—if not growing—concern within financial institutions about the ‘creepy factor’ of using customers’ data in Big Brother ways,” Burson said. “The biggest issue is the lack of marketing expertise and talent. Most bank and credit union marketers are just not experienced at testing and learning with these tools.”
The tools being used to drive digital sales are increasingly driving sales across the whole organization, Cornerstone Advisors observed. More and more origination and marketing systems are being deployed digitally, in the contact center and in the branches. Better content and delivery tools are helping all delivery channels. The rapid rise of digital banking has significantly grown contact center activity, explained Kilmer.
“However, incidental sales leads from branch traffic have decreased. The adage, ‘Go where the people are,’ couldn’t be more appropriate,” said Kilmer. “Digital sales techniques and tools are critical to drive opportunities for all points of delivery, because digital is where the people are.”
Kilmer emphasized it’s not about the tools as much as it is about the culture of the organization that leads to effective digital selling.
Three Things Needed
“The institutions that have been successful in improving digital sales have changed their culture from an underwriting-driven culture to an engagement-driven culture,” said Kilmer. “Three things are needed to make that shift: ending back-to-front protection thinking, beginning front-to-back design thinking, and mapping the customer journey.”
Kilmer said back-to-front thinking stems from the long-time practice where financial industry performance was often a function of credit quality and solid regulator relationships.
“Banks and credit unions have largely been driven by a sense of underwriting risk,” he said. “An entrenched line of thinking has held true that most employees truly want to help customers, and it’s the senior executives that are unplugged from the daily realities of the fight for good service. While in the past there may have been some validity in this, the exact opposite is typically the case.”
Kilmer suggested many executives today understand the need for digital change, but middle management does not, as they are the ones who have to deal with grumbling employees.
Where it Starts
Front-to-back design typically starts with empathy for the customer’s conveniences and inconveniences and works methodically through processes based not on constraints, but on what “should be,” said Kilmer.
“Starting with the customer doesn’t necessarily mean that the customer’s benefit ultimately comes at the expense of the employee,” Kilmer said. “In fact, when executed properly, improvements in design yield positives for both customer and employee. Design thinking at a bank or a credit union almost always manifests itself into journey mapping exercises.”
Kilmer explained journey mapping takes a consumer sequentially through a process or experience to find sources of pain and opportunities to improve.
“Journey maps can be powerful, transformative exercises,” he said. “The two drivers that lead journey mapping initiatives toward real transformation are a relentless focus on impact and identifying key moments of truth. For example, key moments of truth in the purchasing process are the customer entering information and the consumer signing documents—preferably all electronic with no additional steps.”
Need For CEOs to Get Involved
Kilmer emphasized that CEOs must get personally involved in digital sales efforts.
“This is best done by framing up challenges into risk/reward discussions with an expectation of forward action—not wait-and-see,” he said. “Visual roadmaps with firm date commitments help. The lack of CEO involvement and firm commitments can lead to a veto culture, one in which the least common denominator of a working group can halt progress. While some CEOs are stronger at digital sales tech and compliance than others, especially when changes to compliance-related processes are called for, the CEO and other members of the management team will need to confidently problem-solve processes on the spot to knock down protection thinking.”
No Turning Back
There's no turning back for credit unions when it comes to digital sales, insists Kilmer.
“This is something that credit unions have to be good at,” he said. “They may use a number of providers for or vendors to assist them, but they have to have their own capabilities and strong leadership. And for anyone who might be questioning whether this is a real need, look no further than the recent growth of companies like Salesforce and Adobe that are highly digitally sales driven. Both of these companies have been announcing consistent quarterly revenue growth of 25%. You can run down the list of high-growth companies and you will see that they all have the tools and the culture to do digital selling well. It’s a new world.”