Major banks are looking to the retail sector to adopt behavourial segmentation techniques used by the likes of iTunes and Amazon – which flag up similar and complementary products – to increase revenues and cross-sell products.
A survey of 78 senior marketing executives at leading European banks, carried out by researchers Efma for Accenture and UniCredit, found that 41% of respondents had implemented or will implement an initiative similar to a retail strategy within a year.
Using analytics to segment and target customers was particularly key, with most respondents, 78%, believing customer analytics and behavioural segmentation techniques used successfully by retailers would be important in securing the bank’s future competitiveness.
The respondents rated initiatives from Amazon.com, Best Buy and Apple’s iTunes as the top of 16 successful customer initiatives by companies outside the banking industry.
Specifically, Amazon’s point-of-sale product recommendations, where items are recommended based on customers’ buying patterns and other information, was rated highly, as well as Best Buy’s customer segmentation strategy.
Apple iTunes ‘Genius’ tool, meanwhile, uses analytics to recommend new music and other content based on customers’ purchasing histories and existing entertainment libraries. Other strategies of note included BMW’s online product self-configuration tool.
The survey also found that a number of banks had already started to implement retail-influenced schemes. For example, 56% had taken inspiration from Best Buy to implement customer segmentation, which involves identifying current and future customer profitability to target segmented customers with the most effective offers and marketing material.
Meanwhile, 47% of banks said they used an initiative like that of Giorgio Armani, which deploys online and in-store branding aimed at Y-generation customers using popular icons, social network and entertainment.
Piercarlo Gera, managing director of Accenture banking distribution and marketing services, said: “New service models, with increased focus on digital channels, including social media, are already under development or being implemented to engage with today’s less loyal customers.
“Those banks that learn quickly and selectively from the successes of top retailers – particularly in areas such as customer analytics and behavioural segmentation, self-service and customer-centricity – have a clear opportunity to outperform their competitors,” said.
But the retail strategies that the banks considered having most potential, for example Apple’s, were also believed to be among the hardest to implement, and to have the largest impact on the organisation.
Patrick Desmares, secretary general of Efma, said that banks should therefore be selective about which retail strategies they choose. “The world’s top retailers are laser-focused on getting into the minds of their customers and translating their insights into ways to efficiently deliver what their customers want, and how they want it.
“It took retailers many years to build these best practices. Not all of them will make sense for European banks, but, with an informed selection process and appropriate investment, many of these innovations can help banks,” he said.
