6 Ways for Banks to Improve Customer Engagement and Drive Profitability with CCM Software

Ira Brooker   June 6th, 2024

6 Ways for Banks to Improve Customer Engagement and Drive Profitability with CCM Software_web banner

For customers, a bank is much more than just a place to keep their money. Personal finance is exactly that: a highly personal experience that demands an equally personalized approach. In the modern communications landscape, that means financial institutions have a responsibility to create engaging, intuitive, and individualized customer experiences. Today’s customers expect a fast, accurate, and personalized banking experience that is accessible via all of the channels and devices they use every day.

Focusing on customer engagement activities in banking is more than just a good policy for keeping your patrons satisfied and your retention levels high. It is also a vital contributor to continued growth and profitability for a financial institution. Leveraging all of your available channels and resources to make sure that your customer journey is engaging and useful at every stage will pay off in the long-term in ways that a purely transactional approach simply will not.

In this article, we’ll take a closer look at some of the ways banks can develop a more engaging customer experience, some of the risks of overlooking customer engagement in banking, and how a stronger focus on customer communications can drive profitability for financial institutions. Read on to dig deeper into optimizing the customer experience in banking.

Nurturing Customer Experience in Banking Drives Engagement and Boosts Profits

The world is more connected than ever before, and modern-day customer expectations reflect that connection. Banking interactions that might once have been seen as purely transactional are now much more personal. Consumer surveys show that 83% of customers place at least as much value on their experience with a company as they do on the actual products and services they purchase.

Today’s patrons want to know that their bank sees them as more than just another number in a financial portfolio. They expect personalized communications that reflect the products and services they want to know about, delivered in the language and via the channels that they prefer. These aren’t just keystones of the new world of customer experience; they’re also essential drivers of customer engagement and profitability for banks.

Gina Armada Headshot
“ Automating your communications enables consistent, impactful interactions with your customers, yet in a personalized way. Never overlook a chance to truly engage with your customers in memorable ways that confirm for them why they chose you.”
Gina Armada, CEO of MHC

Bad Experiences Send Customers to Other Banks

Banking customers today have choices and options that no previous generation has had, and they are not hesitant to take advantage of those options. A 2023 report by the Motley Fool found that 38% of customers 40 and younger had moved their deposits in the previous year, compared to only 23% of customers over 40. In that same period, traditional commercial banks saw a $1 trillion decline in overall deposits. Clearly, customers are ready and willing to change their situation if their bank is not meeting their personal needs. Communications can play a major role in that decision.

The average customer acquisition cost (CAC) for banks and credit unions ranges from $50 to $150, while retaining an existing customer costs a fraction of that amount. Considering that nearly 65% of U.S. banking customers would be ready to switch to a new bank if their current provider doesn’t meet their communications expectations. Customer surveys also show that more than 60% of consumers would be at least somewhat likely to change banks to one that offered more options for mobile communications such as account alerts, customer service, and monitoring unauthorized transactions.

Want an illustration of how damaging it can be for a bank not to accommodate customer communication preferences? Watch this short video detailing Manny’s struggles to get his bank to communicate in the language and tone he prefers, and how the frustration of a financial institution’s poor communication drives him to seek out alternatives.

Good Customer Experiences Drive Engagement

As Manny’s experience in the above video makes clear, personalized communications that demonstrate an understanding of each customer’s specific needs can play a huge role in differentiating a community bank from its competitors. With so many banking options available, a customer like Manny has no real incentive to continue patronizing a bank that can’t be bothered to communicate in his preferred language, let alone one that puts up so many barriers to correcting that error for him.

Personalizing communications isn’t just a good move from a customer service standpoint, it’s also a reliable path to increasing customer retention, and ultimately to driving profitability. Customers increasingly look for options that take a proactive and personalized approach to business. More than 75% of younger customers say they are interested in receiving guidance on savings and investments from their banks. Offering that guidance along with other timely, tailored communications is a path to attracting and retaining the new customers banks depend on for long-term profitability.

How Increased Customer Engagement Drives Profitability for Banks

As a general rule, an engaged customer is more likely to be a loyal customer, and loyalty is even more important for banks than for most other industries. As an institution that handles extensive personal and financial information, building trust with customers is essential. Suppose a customer emails their bank with questions about the specifics of a new investment service. If the bank answers their questions in the moment and then follows up on that inquiry with emails or texts that directly address their specific concerns without requiring the customer to re-enter the information they’ve already submitted, that customer feels seen and heard on a personal level.

Business researchers have found that customers are 78% more likely to give repeat business to a company that provides personalized communications, and to recommend that business to their friends and relations. Community banks have a huge incentive to encourage repeat business, as the relationship between a customer and a bank is often a long-term one — the average customer stays with the same bank for about 14 years. Focusing on customer engagement strengthens that relationship on many fronts, including:

Differentiation and Competitive Advantage

Banking is a crowded market that gives customers an endless range of choices. Community banks can set themselves apart from larger competitors by providing exceptional customer experience that big chains can’t offer. Personalized communications, a deep understanding of customers’ individual needs, and solutions tailored toward specific goals build a relationship that goes beyond purely transactional. Creating that personal connection is key to attracting and retaining long-term customers, ultimately leading to higher profitability.

Customer Retention

The ability to retain customers over the long-term is another advantage community banks have over their larger competitors. As noted above, it is almost always more cost-efficient to retain existing customers than it is to bring in new ones. 

Those cost savings translate into greater profitability over time. Personalized, responsive customer communications are a key factor in letting your customers know that they are valued and that their particular needs and goals are being heard.

Word-of-Mouth Referrals

Even in the age of digital marketing, few things are more effective for attracting and retaining customers than word-of-mouth referrals. And few things drive word-of-mouth as effectively as high-level customer experiences. 

Providing customers with personalized service and communications that make them feel valued makes them more likely to recommend your bank to friends and family. That drives profitability by bringing in new business with a far lower acquisition cost than any other form of marketing or advertising.

Cross-Selling Opportunities

Building customer trust and loyalty also creates excellent opportunities for cross-selling and promotions. A customer who knows that they can rely on personalized service and communications from their community bank is more likely to be receptive to new products and offerings. Coupled with a strong communications strategy, that opens up a number of potential revenue streams that drive profits.

Reduced Complaints and Service Costs

Customer complaints and service issues can have a big impact on a bank’s reputation, especially in an era of online reviews and social media. A well-executed customer communications system protects your reputation by meeting customers on their own terms. 

Taking a proactive approach that lets customers know that they can communicate easily with their bank and get quick and accurate answers boosts profitability and cuts the costs and resources required to resolve customer problems.

Superior customer experiences result in fewer complaints and service issues, reducing the resources and costs associated with resolving customer problems. This efficiency contributes to improved profitability by minimizing operational expenses.

The Case of Community Banks
Why Maintaining Customer Trust Is Crucial

Building relationships is vital at all levels of banking, but especially for community banks and credit unions. Smaller banks have an opportunity to offer personalized services and build strong customer relationships that major banks are simply too large to accommodate. Communications that acknowledge a customer’s unique needs and preferences help build a sense of community that goes beyond the purely transactional aspects of banking.  

In fact, personalized service is a big reason many customers choose to do business with smaller banks rather than national chains. Surveys show that community banks earn an 84% satisfaction rating from customers and a 77% rating from business owners, scores that are respectively 7% and 12% higher than those for national banks.  

Gina Armada Headshot“ A successful customer communications plan is all about meeting your customers where they are in a customer journey and understanding the optimal ways to seize their attention. Companies that prioritized seamless omnichannel communications were able to keep in more consistent contact with their customers while also building the customer’s trust in the organization..”
Gina Armada, CEO of MHC

6 Ways CCM Software Enables Banks to Improve Customer Engagement and Boost Profits

As this article demonstrates, strong customer communications practices are at the core of customer engagement and profitability for community banks. A reliable customer communications management (CCM) software solution is the surest way for a bank to maintain fast and consistent communications that can be easily personalized to meet the needs of customers across the board. Too many financial institutions rely on manual processes and outdated technology that does not integrate easily with a wide array of data sources.  

CCM software helps to automate many processes that would otherwise be too complex or time-consuming to offer consistently using a manual system. Entrusting those day-to-day functions to automation not only allows your communications to be more timely and consistent with each customer’s preferences, it also frees up your staff to focus on less tedious and repetitive tasks. That boosts retention rates for both employees and customers, providing a flexible solution that can easily scale along with the changing needs of your bank and your customer base. 

A CCM solution makes it easy to both craft communications personalized for specific audiences and to tailor existing content to match the tone and language a customer prefers. 

How it drives Customer Engagement

Communications delivered in the language, tone, and timeframe that a customer prefers make a stronger impression than generic, “one-size-fits-all” messaging.

How it generates profit for the bank   

Personalization builds trust and loyalty in a bank, which drives up customer retention figures.

A CCM solution integrates seamlessly with a wide range of channels such as email, text messaging, and social media. That allows you to create and deliver channel-agnostic documents that will look and function the same way no matter which channel your customer prefers.

How it drives Customer Engagement

Making banking functions easily accessible via the channels customers are already using makes engagement simple and enjoyable.

How it generates profit for the bank   

In an area as personal and important as banking, customers appreciate efficient and easily accessible processes.
Customer Communications Management icon

Automated Translations and Localizations

For customers who speak languages other than English or who prefer a more localized tone, banking communications can be frustrating and confusing. CCM software with customizable templates makes it easy to translate messaging into the language and format they prefer.

How it drives Customer Engagement

CCM software allows customers to communicate and receive communications in their preferred languages without having to go through complicated channels.

How it generates profit for the bank   

Customers are deeply appreciative of service that allows them to communicate in ways that make them most comfortable. That drives long-term trust and loyalty.

CCM software enables customizable, reusable workflows that can scale easily with your bank’s changing business needs. Automating repetitive processes speeds up communications and adds flexibility to your communications plan.

How it drives Customer Engagement

The increased speed and accuracy that comes with workflow automation make engaging with customers on a personal level exponentially more efficient and effective.

How it generates profit for the bank   

Customers can receive personalized communications at important milestones throughout customer journey, at times when customers are most likely to engage.

Customers often think of banking communications as dull and difficult to navigate. With smart and interactive documents, customers can interact with a bank on their own terms and find methods that work best for their personal needs and preferences.

How it drives Customer Engagement

By providing a personalized and memorable experience for each customer, a bank can boost the likelihood that patrons will tell their friends about their customer experience.

How it generates profit for the bank   

Customers stay with banks that provide memorable experiences that make them feel valued, and they are more likely to spread word-of-mouth.

Understanding how customers interact with their communications is crucial to banks looking to provide consistent service and attract new business. Journey maps help to identify bottlenecks and inefficiencies that can be fixed to improve the overall customer experience.

How it drives Customer Engagement

Journey mapping allows a bank to provide smoother interactions by correcting issues before they impact customers, reducing complaints from customers and increasing trust in the bank.

How it generates profit for the bank   

Customers are more likely to stay longer with a bank that provide them with consistent, high-quality service.

Drive Customer Engagement for Your Bank with MHC

The bottom line is that reliable customer engagement is essential for any community bank aiming to grow its customer base and profitability. An automated CCM software solution from MHC allows your bank to provide customers with personalized, memorable experiences that let them know that they are valued. That builds long-lasting relationships that are the core of any successful customer experience in banking. 

Want to see our solutions in action? Contact MHC today to request a demonstration. Our in-house CCM experts will contact you to learn more about your bank’s specific needs and goals, then craft a communications solution specially tailored to your organization. 

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Ira Brooker

Ira Brooker is a freelance writer and editor based in Saint Paul, Minnesota. He has been writing blogs and copy about software-as-a-service solutions for most of the past decade. Before exploring accounts payable and workflow solutions with MHC, he wrote about fields including cybersecurity, workforce management, online accessibility, audiology, retail sales, and much more. When he’s not doing business writing, he also indulges in writing fiction, journalism, arts criticism, and bar trivia.

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