Want your customers to adopt alternate channels? Read on..

Inspite of ATM, Internet and Mobile channels being available for last 10 years in India, total number of transactions on alternate channels is very low compared to bank’s total transaction base.

According to a BCG survey, active Internet banking accounts in metro branches are 20% and active mobile banking accounts are below 5%. Averaging these numbers with non-metro branches makes them even worse. If we compare all channels pan-India, adoption is around 10-15%. This is a cause of concern for the banks since fixed costs are high to maintain these channels.

There has been a lot of talk about challenges in adoption of these channels. The penetration numbers have not changed much in last few years. According to a BCG study, two main reasons for slow adoption are:

  1. Lack of awareness
  2. Lack of education

Adopting a new channel to bank is like adopting a new technology, changing the way customers have been working so far. Let us look at the technology adoption curve by Geoffrey Moore. Any technology adoption goes through the following cycle. When iPad came, their use was limited to Innovators and Early adopters before every other person started using them.

alternate channel adoption chasm

Technology adoption curve

  • Innovators: Enthusiasts who love new technology, even when it doesn’t yet have a purpose.
  • Early Adopters: Visionaries who see how a technology can be used to solve a problem.
  • Early Majority: Pragmatists who want social proof that a technology has value before adopting it.
  • Late Majority: Conservatives who prefer old technology until its clear a new technology dominates.
  • Laggards: Skeptics who avoid adopting new technologies at all costs.

Before the majority adopts a technology, there is a chasm that needs to be crossed. Alternate banking channels seem to have stuck in the chasm. To cross this chasm, and to have majority adopt the channels requires a thought after strategy by banks. For businesses like banks, dealing with volume customers, Moore suggested a Four-gear model to enhance adoption.

The Volume Operations Model

The four gears driving the growth of the business are:

  • Acquisition 
is the process of acquiring new customers. Since the objective is to make current customers adopt alternate channels, this step has already been taken care of.
  • Engagement 
means getting customers to like your product, to make them use it. Banks need to find non-users of alternate channels to try those channels. It is only when people experience convenience and value, they are inclined to change.

    Alternate channel adoption

    Four gears model

  • Monetization involves generating money from the use of your product. One the customers have tried a channel; idea is to make them use it regularly leading to optimization of channels and cost reduction for banks.
  • Enlistment 
is having customers get others to use your product. Banks need to use customers who have recently switched to alternate channels to advocate the use of channel to other customers.  Imagine when a 50 years old customer talks about online banking to another customer with same demographics, impact is going to be multifold.

Steps for banks to expedite alternate channel adoption-

  1. Channel selection – Pick the channel that would give highest return for the effort – the channel with highest fixed costs and low adoption rates.
  2. Segment selection – Pick a segment of customers who are relatively easier to convert. It is important to segment customers and choose an easy win segment.
  3. Proof of concept – Start the initiative with a few key branches. This would give the time to understand the effect of the approach and use learning in other branches.
  4. Education and Engagement – Educate the customers; make them try the new channel so that they can see the value and experience convenience.
  5. Regular use – Motivate customers to use the channel again and again using motivational techniques and rewards.
  6. Enlistment – Use the new adopters to advocate the use to other customers in their segment, and to educate them on the use. This can be done through advertisements, one-to-one interactions in branch, reward programs etc.
  7. Scale up – Scale it up to other channels, segments and branches.

While banks take all these steps, uptime and availability of these channels has to be ensured. Without this, all steps would be futile.

Adoption of alternate channels needs an active effort and strategy from banks. Hoping that customers would convert one day by themselves would not reap much result.

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Cross-selling is not Proactive Customer Engagement

Sonia and Vishal sat on their couch sipping evening tea and flipping channels on TV. As she browsed channels, she reflected on her doctor appointment the day before. She is expecting their second child and is 40 days away from due date. She looked around and wondered how she would be able to cope with second baby in their studio apartment. This had been on her mind for a while, and she along with her husband had checked various houses. Whatever they liked was beyond their budget. Vishal did not want to take a loan due to previous issues with his bank. At that moment, they got a call from their bank offering a mortgage, ensuring a timely approval and disbursal.

Does this call sounds engaging or intrusive? Do you think that Vishal would be awed by his bank’s customer service of judging his needs? Or he would feel threatened by the intrusive nature of this call?

I would say that a call like this could awe a customer if the customer is already in love with his bank, and trusts them. In a case where customers are not much satisfied with the service levels of their banks, proactive cross-selling appears intrusive. If I were Vishal, my first thought would be – How on earth they know that I am contemplating a mortgage? Are they spying on me? When I call them with my needs and issues, they seem to give me a deaf ear.  They understand my needs when there is a chance to sell something more.

So, what exactly is Customer engagement and how does this help?

Customer engagement is engaging with customers during dormant parts of their lifecycle with your organisation. This helps in improving your brand recall, and they seek your organisation when they need relevant services. If done well, Customer engagement can help to-

  1. Create brand recall
  2. Build trust
  3. Get customer insights
  4. Understand customer needs
  5. Design/Improve products
  6. Get customer feedback
  7. Improve cross-selling and up-selling

Cross-selling is an outcome of correct customer engagement. It is not part of the process.

Some good examples of Customer engagement are as below-

  1. TD Bank Canada’s module to teach “saving” to kids – Since saving money for rainy days, is not part of western culture, TD bank has developed detailed modules/worksheets to help parents teach saving to kids.
  2. Noor Islamic Bank UAE’s “Bank of the Future” initiative – Noor Islamic Bank invited customers to share their ideas on services they would like to se in future.
  3. Lay’s “Do Us A Flavor” Contest – Lays has once again invited fans from all over the world to submit next great potato chip flavor and get a chance to win $1 million.

A few ways in which banks can engage customers-

  1. Discussion threads are an important way to engage customers, share information and get customer insights. Some of the topics banks can look at-
    1. Parameters customers consider while buying a financial product/service
    2. Financial priorities for the year for customers
    3. Things which customers desire for in their financial service provider
    4. Things they would like to change in your bank
  2. Blogs by experts to educate customers on areas like
    1. Managing finance
    2. Budgeting
    3. Saving for kid’s education
    4. Investment in equity
  3. Online games/apps with focus on banking and finance

Idea of Customer engagement is to create value for customers. Once banks do that, customers would spend more time with banks even when they do not need their services. This would lead to increase in trust, higher brand recall, advocacy, and ultimately more growth.

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Smart Government and Technology

With Expo 2020 on the cards, Dubai rolled out Smart Government initiative. But what exactly is Smart Government?

Smart Government is the ability of a Government to “Understand” the said/unsaid needs of its Customers (Citizens/Residents/Visitors); “design” solutions to address those needs; and “deliver” the solution effectively.

In order to be Smart, a few things can governments can do-

1. Crowdsourcing using Social Media 

Crowdsourcing has immense potential. It has been proved time and again, starting from Goldcorp challenge (see video below) and cleanup of Gulf of Alaska 20 years after Exxon Valdez spilled 11 million gallons of oil in Prince of Sound.

Government in US is using crowdsourcing in intelligent ways.

  • US Army created a portal armycocreate asking citizens to come up with situations soldiers could encounter. Once you come up with a situation, you design a solution and army takes it further.
  • US navy created a online gaming portal mmowgli. Players are attacked by pirates in the game. The strategies players use to escape the pirates are assessed by the navy. Learning from these strategies are used to tackle the Somali pirate problem.
  • US revenue department crowdsourced ideas to use taxpayers’ money more effectively. They got more than 40,000 responses and the tope ones were implemented.
  • US State department and US Health department outsource small tasks to citizens, certainly an intelligent way to crowdsource man-hours.

Crowdsourcing by Governments helps in following ways-

  • Creating connected and engaged Citizens
  • Getting out of the box solutions to situations
  • Creating trust between Governments and Citizens

Initiatives like #mydubai are a step in the direction of crowdsourcing. Much more can be achieved with the use of crowdsourcing in innovative ways.

2. Big Data

  • Use of Big data in President Barack Obama’s re-election campaign has resulted in further traction for Big Data. It is absolutely amazing to see how data was sliced to understand human behaviour. Data crunchers noticed that George Clooney had an almost gravitational tug on West Coast females ages 40 to 49. The women were far and away the single demographic group most likely to hand over cash, for a chance to dine in Hollywood with Clooney. They used this insight to collect millions of dollars. Many such insights were discovered and the team managed to collect donations above $ 1 billion. Every night election campaign was run 66,000 times to see the chances of Obama winning the campaign.
  • Another interesting use of Big data is by New York City. Using Big data, Mayor of New York revolutionised the inspection of buildings. More than 450,000 buildings in New York city were old and prone to fire. It was difficult for a department with strength of 200 to inspect these buildings. The Mayor’s office resorted to big data. Various factors like sub-tenancy, crowding in building, timeliness of bill-payments by landlords, reporting of rodents/pests, latest brick-work etc. were studied. A list of 1500 buildings was prepared. When Firemen visited these buildings, they had to order evacuation in 70% of them. The hit rate improved considerable from 17% earlier. This resulted in pre-empting a disaster.
  • Center for disease control (CDC) studies big data every year to decide the concoction of flu vaccine for a particular year.
  • Organisations like Target and Amazon use big data to predict customer behaviour. Kayak, the airline aggregator uses big data to predict the future prices of airline tickets and suggest customers if they should buy right away or hold their decision for a few days.

Dubai government should look at using big data for Expo 2020. One way is to understand delegate behaviour from Expo 2015 – Their demographics, likes for each demographics, things they liked/not-liked, things they wished for in the expo. With all these insights, the experience for Expo 2020 can be actively designed to wow the delegated and create advocacy for Dubai.

3. Internet of Things

Sensors are attached to things and these sensors can transmit information. RFID is one such example. These sensors are connected and hence represent “Internet of things”.

In coming years, having sensors in things would transform everything. Imagine an infrastructure which can sense, collect data and transmit data to a source.

Currently it has been used in some interesting ways world over-

  • Tweeting bus tops in Norway – Kolumbus bus stops in Norway have QR codes. On scanning the code, travellers get the details of buses and routes. They can share their experiences, their stories, and whatever they share is tweeted world over.
  • Tagging rubbish in Seattle – 3000 pieces of rubbish were tagged in Seattle to understand waste management. Several insights were observed as a result. It was found that a printer cartridge travelled more than 6000 miles to reach a location to disposed in an environment friendly way. The travel completely negated the effort to dispose it. There is a need for municipalities to look at ways to dispose hazardous waste much closer. When such data is shared with people, it can lead to change in behaviour and adoption of green methods by citizens.
  • Lamp posts in Birmingham – Weather department has attached sensors to lamp posts in Birmingham. These sensors capture weather information and transmit it to weather department, enabling them to forecast local weather.
  • Tree tags in London – Project is launched in London to attach sensors to trees. Objective is to educate visitors and tell stories about trees in different ways.

I cannot wait to see how Citizen experience would transform when whole city infrastructure would have sensors. I could foresee traffic density on my route and plan accordingly. Governments would be able to monitor security, health, infrastructure, and almost anything.

Technology has immense capabilities, governments just need to resist using them haphazardly. Need of the day is to “define experience desired” and then look at the technologies that can deliver that experience.

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Need something.. Just ask

Brought up in a family where asking was not considered to be a positive trait, I never developed the habit of asking. There is a saying in my language on asking and my mom told it to me ample times in my growing years. It says, “Bin mange moti mile, mange mile na bheekh.” This means – “Without asking, you get pearls; and if you ask, you do not even gels alms. “

First 32 years of my life, I embodied this principle. I practiced it during my appraisals as well in my personal relationships. I would expect that my boss would recognize the effort I had put in, and reward me accordingly. Fortunately, it did not take me long to realise that world did not work this way. But unfortunately, it was a huge effort to bring in this change. I knew it had to be done. But there was a huge gap in “knowing” and “doing”.

Few reasons this change was difficult for me-

1. It was deep in my upbringing that asking is not good. It depicts self-centricity.
2. It appeared against the notion of “Karma”, the concept that our actions decide our fate. As per Hindu mythology, one is supposed to focus on Karma and leave the rest to God. If Karma is good, things fall in place.
3. Fear to hear a “no”.
4. Somewhere maybe, I felt that asking made me inferior to the other person.
5. I felt asking someone for something was bothering them.
6. And of course, asking was out of my comfort zone. It was different from the way I had done things all my life.

The beginning of change:

Over a period of time I realized the following-

1. When people asked me for something, I responded positively. This made me feel that there have to be more people like me.
2. Asking is about making people aware that they can help you. A lot of times they are not even aware.
3. People generally like to help others as this makes them feel good about themselves.
4. I heard Steve Jobs saying that he asked people all his life and he rarely got a “no”, even when he was a “nobody”.

The Change:

Two things changed me completely-

1. My four years old daughter – At least 10 times in a day she asks me for things I don’t expect myself to agree to. But when she asks, I relent a lot of times. At those times, I can see it on her face that she really did not expect me to say yes. She reconfirms if she has been granted her wish. At times when I do not relent and give her a stern look, she says, “I am only asking mumma”. The unsaid part being, “You can say no if you do not want me to do this.” Come to think of it, kids get maximum “no” from us; still they do not get dejected. They ask and ask and ask. As we grow up, we take these rejections as “personal” and develop all inhibitions.

2. Rejection Therapy – Jia Jing was dejected as he got rejected by every VC he went to. He was almost at the point of giving in, when the idea struck him. He went on a 100-day rejection therapy. He decided that he would ask people for crazy things, get endless rejection and develop immunity to the negativity attached to rejection. He asked people for things he would expect a no. Like asking a cop to drive his car, or asking a stranger if he could play soccer in his backyard. What he realised was that people started saying “yes”. He heard “yes” from places he expected least. Below is his video on “Ted”.

This all inspired me to take the path of asking. Being an entrepreneur asking is indeed important for me.

Status as of now-

In last week of December 2013, I wrote my goals and mini-goals for 2014. In front of each mini-goal, I wrote name of people who could help me in achieving the goal. I reached out to those people and explained my goals. I told them how they could help me in my journey. And no prize to guess, all of them supported me. I have already started seeing the results of their support.

So, all you people out there who are like “old me”, leave your inhibitions and ask people for help. When you write your success story, when you talk from the podium you need people to be thanked. Give people a chance to be a part of your success. They would be thankful to you as well.

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