Other parts of this series:
Customer engagement levels in UK LP&I are poor (lower than banks and much lower than online retailers). LP&I providers need to radically change their business models so customer insight becomes part of their DNA.
This presents two key challenges. It demands investment in a new set of organisational capabilities which, themselves, point to a radical change of approach. And second, making this transition is exacerbated by the complexity of LP&I providers’ IT estates. With customers’ personal data spread over multiple legacy systems, and with gaps in some of the simplest customer details like addresses and names, it’s extremely difficult to secure a single view of the customer.
All this in a market that’s being shaken up by disrupters. New entrants are demonstrating that if you do direct customer engagement well, customers are willing to engage – no matter how dreary life, pensions and investment products may appear.
In the first blog in this series, we explained how successful, born-digital Retail pioneers demonstrate three core qualities in their drive to achieve market-leading customer engagement through smart, slick apps. Let’s re-explore them in the context of some LP&I disrupters:
- “Hey smarty-pants!”
Disruptors make simple, smart apps for the end customer (take Pensionsbee, for example). These brands understand how first impressions count. And their crisp, minimalist apps show they’ve really worked on branding throughout the customer journey. What’s more, their brand names give a good feel for what their products are about. Contrast that with the brand names of some traditional LP&I players: you’d be hard-pressed to guess what kind of service they’re offering. We asked some of our ‘Generation Snowflake’ colleagues to look at traditional players’ online offerings. The feedback? They look like old websites that have been rebranded… badly!
- “I’m not ready for commitment yet!”
They enable non-committal exploration, with smart ways of drawing the customer in. Nutmeg does this really well. Once they’ve set up an account, the first page ‘try it out’ lets customers test the proposition and watch interactive demos. It eases customers into the process and gently educates them along the way, assuming a low base knowledge. Contrast that with many traditional players who throw customers in at the deep end, assuming they’ll understand terminology like asset class, sum assured, and decreasing term.
- “It’s all about me!”
The personalised touch is vital. Disrupters recognise that customers expect their brands to know them and be smart with their data. This doesn’t necessarily mean offering tailored rewards systems. Simple tools, like addressing a customer by their name, build loyalty and resilience for completing the purchase journey. For example, if a customer starts a purchase journey on Moneybox, without completing it, the firm sends gentle, personalised reminders like ‘James, you’re almost there!”
Getting customer engagement right takes time. And an acute understanding of how expectations vary by segment. 67 percent of 18-24 year olds would like to (or already do) conduct long-term financial planning by app. Just 6 percent of 65+ year-olds feel the same.
There’s no one size fits all.