ING Direct takes customer centricity to heart

Last week I had the privilege of listening to Glen Comerford, the Marketing Analytics Manager for ING Direct, talk about their exciting journey to becoming one of the most customer-centric banks in Australia.

Glen speaks passionately about the conflict between putting customers first versus a commercial outcome, and the fact that nine times out of ten, commercial outcomes will win on priority and the customer will take second place.  Take for example Ikea, where stores are designed more like mazes, intent on keeping customers in the store as long as possible to maximise the basket size.  But in doing so, many customers come out of the store purchasing things they didn’t need (and later regret), and make note to avoid all future visits unless it’s absolutely necessary.  This ultimately leaves a negative customer experience and lower chance of return visits – some might argue it even reduces the overall lifetime value of each customer.  Milk at the supermarket is another classic example – always located at the back of the store in the hopes that you’ll pick up a few other items on your way down the aisle – items you probably didn’t need.  As a result, anyone that just wants a litre of milk, is probably going to avoid a supermarket at all costs!

Glen’s premise however, is that we need to switch the lens from how big we can make a customer’s basket spend, to how much we can get from a customer throughout their life – an increased focus on lifetime value which fundamentally requires companies to put customer centricity at the heart of every business initiative.

With an NPS score of +28, compared to -6 for most Australian banks, it stands to reason that ING Direct are the experts in customer centricity – providing 2% cash back at the register when paying with an ING card, $0 monthly fees, low interest rates, and free use of any ATM (yes, ANY ATM!!!), they certainly have the products and services to back it up.

But it wasn’t always the case.

Back in 2014, Glen reflects that ING communications were prioritised based on business needs.  When a new insurance product was released – the goal was to sell it to all their customers.  Measurement of performance was based on direct measures, such as the number of clicks, opens and unsubscribes – none of which actually measure ultimate success for ING or value for their clients.  As a result of marketing being incentivised on clicks and opens, targeting of campaigns was isolated to those customer groups with the proven highest level of direct response – not customers who were most likely to buy.

Recognising the need to change, ING started out by asking two questions:

  1. How do customers behave after we contact them?  And more importantly;
  2. How would they behave if we had done nothing?  Unfortunately, very few companies ask this.

What they found was that just 5% of direct marketing campaigns were delivering 90% of the results, 70% had no meaningful impact at all, and 10% had a material negative impact on customer behaviour.  One such example was a campaign headline “Get a bonus $300 free travel”, but the terms and conditions were so onerous not many customers could actually fulfill them – as a result clients were left feeling at best disappointed, at worst ripped off, causing them to go elsewhere.

With a fresh perspective on the importance of customer centricity when making decisions about their marketing campaigns, immediate action was taken.  Under-performing campaigns were shut down (80% of all campaigns), the highest performing historical campaigns were repeated and expanded (5%), and with freed up capacity, resources were reassigned to focus on innovation.

Putting the customer at the heart of business decisions delivered a sustained three times greater performance in cross-buy campaigns, which at one point delivered up to fifteen times greater results.  Measurement was shifted from direct marketing response, to total customer behaviour.

A new challenge then arose – when you dramatically increase the success of marketing campaigns, more customers naturally have more products, and since there’s only so many times you can buy the same product or service, continuous innovation became the key to maintaining ongoing success.

One of the main enablers of this evolution was the ability to move from a monologue type engagement to an ongoing dialogue – made possible by the use of IBM Campaign and IBM Interact.  Instead of sending out a blanket email to all customers about a new mortgage product in the off chance they might want to sign up for it, the IBM marketing platform allowed them to target specific customers when they logged onto the website – clicking on a banner registers interest in the system and triggers an outbound call within 24 hours.  If the customer is ready to proceed – the sales process begins.  If not, the system allows them to keep leads warm with relevant content via email and Facebook, scheduling calls back when the customer is ready to purchase.

In 2015, Glen reflects they faced a similar re-targeting challenge in the digital space as faced in marketing.  With digital advertising, a customer registering interest in a product or service is suddenly targeted with offers on all devices, even after they’ve made a purchase.  At best this can be creepy or annoying, at worst, they may even see a better offer and be left angry that they accepted a substandard offer.  ING wanted to serve content to people based on total behaviour, across all devices, making sure if a customer already owns products, they are not targeted with the same products again.

The business case to invest in technology to make this happen was clear in Glen’s mind – more relevant advertising, better use of resources, improved measurement, and anticipated three times performance gains on digital media.

Today, IBM’s Universal Behavior eXchange (UBX) allows ING to target people online through digital media with the same precision you could offline through email campaigns and direct mail.  A unique customer ID is created in the digital world to connect to various ad-buying platforms with control groups, and a greater understanding of online and offline behaviour.  The decision to use UBX instead of simply uploading customer data to digital partners and letting them figure it out, was due to the high standards ING place on customer privacy – they simply weren’t interested in exposing customer data to 3rd parties.  With native integration to IBM Campaign and IBM Interact, UBX provided an opportunity to protect customer data, with minimal operational overheads and flexibility to deploy communications through various publishers and DSPs, without being locked into a particular publisher.

Based on the journey that Glen and ING Direct Australia embarked on, he has three recommendations for companies wishing to put customers at the heart of business decisions:

  1. Find out what customers did after you contacted them, and what they could have done if you hadn’t contacted them at all.
  2. Quantify the proportion of your marketing activity that adds no value, and eliminate it.
  3. The age of click-based attribution and investment is coming to an end – get ready with a solution that puts the customer at the centre of your digital media.

 

 


Photo credit:  ING Direct