Voices: the CMB Blog

Thirty years ago, the ATM revolutionized banking convenience by letting customers conduct their business at any time, and without stepping foot in a branch— there are now several generations who can’t remember a time before you could just “hit the machine.”  But all that automation meant fewer bank customers face to face with bank reps and the products they sell. Decades later, rising cost pressures, new regulations, consumer desire for added convenience, and diminishing returns on full-service bank branches have created an economic challenge for banks.

To understand the impact of these changes, through our Consumer Pulse we explored customer perspectives on bank convenience, fees, and branch alternatives. We found what bank customers say they value, doesn’t necessarily match up with what they’re actually doing.  We asked people how important having a branch nearby was to their sense of banking convenience—most (67%) reported it was “very important.”  Taken by itself this isn’t a shocking statistic; we know bank customers appreciate personal service and convenience. But asked how often they actually go to a bank (not an ATM—a full-service branch) nearly half (45%) go fewer than 5 times per year.   

What explains this disconnect between what consumers say they need and what they actually use?  Online and mobile banking services mean customers can conduct most transactions from the comfort of their home or office. Although a trip to the local branch is often unnecessary when you can check your balance, transfer funds, or make payments from your phone, customers find full-service branches appealing. Still, fond memories may not be enough to keep branches, as customers know them, open.  

For the first time in over a decade, banks are closing branches faster than they’re opening them, and banks are looking to alternatives with lower overhead and operating costs. To understand what alternatives were most and least appealing, we asked respondents to participate in a trade-off exercise to evaluate new banking concepts. When forced to choose, customers were willing to give up their local branches rather than see fees rise. These findings suggest branch proximity, while still important to many, is not as critical to a convenient banking experience as it might have been in the past.

One of the alternative banking concepts we tested was the” teller-less” branch. The teller-less branch is largely automated, but sales professionals are available to discuss bank products, and customer representatives are available by phone. In one of the more surprising findings, customers said they would rather have their local branch close altogether than have it replaced with a teller-less branch. This finding, while counter-intuitive, is telling—banks will need to educate their customers on how new banking concepts will affect and benefit them.

While the full-service bank branch may become a thing of the past, banking convenience and service are as relevant to today’s bank customers as ever—even as the modes of service change.

Download the full report: The Future of the full-Service bank Branch here.

Posted by Jim Garrity, Jim is Managing Director of CMB’s Financial Services practice. He hasn’t stepped foot in his bank branch in months.

The day that we all become as tech-savvy and suave as Tom Cruise in Mission Impossible is fast approaching.  How do I know?  A few years after a Cruise movie is on the big screen, his cool gadgets are for sale in a store near you.  Don’t believe me?  Just watch any 24-hour cable news show and you will see that they are all using the same multi-touch wall display that Tom Cruise first popularized in the movie, Minority Report.

Now, Google is saying that we can be just like Tom Cruise in Mission Impossible with the release of his iconic sunglasses that project information onto the lens.  Can you imagine it? You could be walking around New York City with turn by turn navigation, getting information on local restaurants, activities, even places your friends have recently checked in on Foursquare or Facebook, all while strolling along, looking up instead of down at a phone (or a map… remember those?!).

The fervor and excitement this device is creating has endless potential. I think a product like this will influence how retailers reach out to shoppers.  For example, in the future, the customer won’t be sitting at home, miles away from a store location…they will be right outside your door searching for products on their sleek Mission-Impossible-sunglasses.  As a result of this change, more focused local or location-based advertising will begin to replace the need for expansive mass media campaigns.

The shift to more personalized advertising is already taking place with the rapid popularization of the smartphone.  According to our Consumer Pulse report: How Smartphones are Changing the Retail Shopping Experience, released last year, over half of all smartphone owners use their device when shopping in a retail store. Currently, retailers are wary of these customers as “show roomers” who will go in store to browse, but who make their purchases online to find a better price. 

Instead of worrying, retailers need to take action and realize that these tech advancements in shopping can be used to their advantage to create a personalized shopping experience.  Leveraging data already collected from loyalty programs or Point of Sale can provide shoppers with a compelling reason to make their purchases in a retail store, creating and providing a seamless and elevated experience for the buyer.  The resources to make this experience a reality are available; retailers have the data, it is just a matter of learning how to use it effectively.

Someday, when we are all like Tom Cruise and wearing spy-like glasses, advertising will need to be personalized and relevant to the individual.  Such a marketing technique will draw people in, breaking through the mass noise and bombardment of content available all around you.  No longer will accurate advertising and recommendation-engine results be relegated to online sites alone—it will be a part of your everyday life, maybe even programmed into your sunglasses.

What do you think?  Will mobile technology transform the retail shopping experience?

Posted by Kirsten Rasmuson, Kirsten is a Senior Project Manager on CMB’s Retail practice. She’s looking forward to welcoming our new robot overlords.

The other day I read an interesting article in the Chicago Tribune; the headline read:   Hard-hit Millennials less likely to be brand loyal. As a “hard-hit” millennial (those aged 19-34), who owes the value of a modest-home in student loans, I was very interested in what the marketing masterminds of the world had concluded. Turns out, it’s not so good.

According to a study released by WSL Strategic Retail, 25% of Millennials reported that they do not have enough money to cover basic needs. It also concluded that 80% of Millennials believe it’s important to get the lowest price when shopping and 60% would choose a lower priced item over their usual brand if it meant saving a few bucks.  The article also suggests that retailers had previously considered Millennials their “golden ticket” to growth and success. I guess they opened the wrong Wonka bar.

As an agent of consumer research, I began to wonder about our clients and other brand marketers. Are they spending sleepless nights trying to develop plans to compensate for a demographic that is not only unwilling, but virtually unable to spend? Millennials have already been dubbed “untouchable” by traditional marketing standards due to the digital boom; it makes you wonder why brands would invest countless dollars in research and marketing efforts if Millennials are such a lost cause. My advice to marketers? …don’t start losing sleep just yet.

To be clear, we see evidence that supports WSL’s conclusions. Our Winter 2011 Consumer Pulse research on loyalty found that Millennials expressed less loyalty than Boomers to a range of products, with the exception of social networking sites and electronics.

However, we can also find support that suggests Millennials are not as hopeless as they seem. The same Pulse research found that 84% of Millenials consider themselves moderately loyal. In addition, nearly half (46%) said that there are companies or products they’re so “loyal” to that they do not consider price when making a purchase decision. So how does one crack that egg?  What it comes down to is experience. Fifty-three percent of Millenials were willing to pay a bit more to companies they’ve used before and whose products they know they’ll like.

Despite it all, Millennials appear optimistic. Having grown up in an era plagued by war and economic strife, you would think the negativity would bring us down. However, Millennials are seeing a light at the end of the tunnel. According to a separate Consumer Pulse research study CMB conducted in summer 2011, 48% of Millennials surveyed were optimistic that their financial situation would get better in the next 12 months. And nearly a third (29%) said the economic downturn had no effect on their stress levels.

While our pockets may not be as deep as we would like, we are optimistic they one day will be. In fact, the same Summer 2011 Pulse research found 59% of Millennials viewed “being indulgent” a highly important goal/value. When the day finally comes where we can afford to spend, you can bet we will, and loyalty will be a driver. So have a little faith, brand marketers of the universe…we Millennials sure do. 

To read our latest Consumer Pulse reports exploring exploring trends in social media, healthcare, technology, travel, entertainment, and finance, click here.

Posted by Keri Ibbitson. Keri is an Associate Researcher with the Travel and Entertainment team. She considers herself very brand loyal, always choosing General Mills Cocoa Puffs over store brands.

I’m on record as saying that loyalty programs should focus on rewarding behaviors that have a direct financial benefit to the business (i.e., purchase, bookings, and sales).  Because of this belief, I was staunchly opposed to the concept of giving loyalty members “points for tweets.” But my thinking, like the role of social media in general, has evolved. 

One reason for my change of heart is that ‘social media’ no longer just means Facebook or Twitter…it now includes location-based tools (like FourSquare) and connecting to people ‘on the go’ through mobile apps. This new revolution (according to those who name new revolutions!) is called SoLoMo (social, location, mobile) media. 

Last month I led a panel discussion at the Loyalty Expo in Orlando on the role of social media in loyalty programs and it was clear from the start that we couldn’t talk about social media without talking about mobile and location-based services (SoLoMo!). The loyalty lifecycle shown below provides a basis for understanding how SoLoMo tactics can support member engagement:

 

Acquire:  To reach members that ‘look like’ your currently valuable members, Loyalty Marketers can use SoLoMo tools.  Two recent examples of programs developed to get members/customers to talk about a company/program are offered by Tasti D-Lite and Caesars.  TastiRewards incentivizes customers to associate their Twitter and Foursquare accounts with their Tasti D-Lite membership cards, posting a tweet or comment every time they order a delicious treat. Caesars recently relaunched Total Rewards, giving loyalty members points for tweets.  These SoLoMo initiatives can drive program awareness and member acquisition.

On-boarding:  Facebook, Twitter and other online communities (gated or not) are ideal platforms to introduce customers to the ‘loyalty club’ to let these newbies learn from like-minded members—and, importantly, encouraging them to use their rewards, rather than just letting them languish in their wallets.

Engage:  SoLoMo tools can be employed in a variety of ways to engage and strengthen relationships with current members.  Here are some examples:   

• Making rewards more obtainable:   Citi’s rewards app lets cardholders ‘pool’ rewards so they can plan a joint purchase, trip, or even make a charitable donation to an organization they support

• Surprise and delight your customers: Best Buy surprised (and no doubt delighted!) a few of its reward members with tickets to the Twilight movie premiere. Members were selected and invited based on past purchase history and spending potential.  

• Make rewards/currency more relevant:  Companies like ifeelgoods are offering loyalty programs as an option to provide a social currency to reward member’s behavior.  With 240 million active monthly users on Zynga, there’s a good chance at least some of your members would enjoy the opportunity to buy digital goods. 

Retain and win back:  While we don’t suggest giving up traditional channels for monitoring and responding to customer service failures, social media can let you discover failures (and wins!) quickly and begin the customer recovery process.

The bottom line is, your customers are social, they use Facebook and other sites, and they expect businesses to not only have a presence but to engage.  Sites like Facebook and Twitter are ideal platforms to engage and reward customers – particularly through SoLoMo tools.  So I’d like to report that I’ve “come around,” to see the value of social media for loyalty programs because of the opportunities they present to engage, and “surprise and delight” your most valuable customers.

Want to learn more about our approach to building Customer Loyalty? See how CMB helped GE CareCredit redesign their online customer advocacy panel, creating a community with high engagement and even higher returns. Watch the webinar.

Posted by Judy Melanson. Judy leads the Travel & Entertainment practice and loves collaborating with clients on driving customer loyalty.  She's the mom of two teens and the wife of an oyster farmer. Follow Judy on Twitter at @Judy_LC

Earlier this month I had the chance to present at the Market Research Technology Event in Las Vegas. Beyond the fact I just could not get accustomed to watching people walk by conference rooms swigging beer and wearing in flip flops; for me the event raised more questions than provided answers.

During the conference, one of the most quoted reports was McKinsey’s: Big data: The next frontier for innovation, competition, and productivity.  For me, one of the most striking takeaways from the report was a prediction that by 2018, the US will have a shortage of talent necessary for organizations to take advantage of big data—the US alone could face a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts with the know-how to use the analysis to make effective decisions.

After we market researchers take a moment to celebrate our job security, we should consider that skilled market researchers will be asked to fill the space by taking on more tasks and working longer hours.  As the gap widens between the influx of data and the analysts we need to make sense of it, are 80 hour weeks inevitable? Certainly workforce globalization will be a key to filling “big data” needs, but I was very surprised to hear little discussion of how technology will help us deal with this shortage.

I left the conference with the theory that the “new technology” we need is the yet-to-be-realized application of a tool to change a process to yield a quicker, lower cost, or better quality outcome.  I think market researchers have yet to focus on how technology can act as a surrogate for the role they play within their organizations

So what might the future hold? I expect technology will allow market researchers to develop “analytical bots” to make sense of the vast ocean of data to answer specific business questions raised by internal clients. Watching Watson and Siri answer questions of fact with extremely high accuracy makes me wonder what our role will be.  If these machines “have all the answers” then what purpose do we have?  I don’t believe technology will replace market researchers; their skillset and output are still critical for companies to be competitive.  The purpose is to create the rules and algorithms that convert the facts into relevant information.  This is where market research skills will combine with technology to fill the resource gap.

We’ve heard a lot about expert systems—computer systems that emulate human decision-making. It’s my view that the market researchers who will lead in the next 5 to 7 years will be those who are setting up and managing expert systems, that take all of the facts and computations within large sets of data and apply what is relevant, to make decisions quickly, anywhere, and at any time.

Did you miss us at TDMRE? We'll be at the Audience Measurement Event in Chicago from May 21st to the 23rd. Register for a 25% discount by entering CMB2012 here.

Posted by Jeff McKenna, Jeff is a senior consultant at CMB and team leader for Pinpoint Suite-our innovative Customer Experience Management software. Want to learn more about how Pinpoint Suite can help you make sense of your "Big Data," schedule a demo here.