Ghosting Customers is Not a Great Customer Engagement Strategy
Photo by Stefano Pollio on Unsplash
One is an Anomaly. Three is a Trend
Retailers, transportation providers, utilities, health insurance providers, big tech - almost every company or organization a person or business comes into contact with these days is ghosting its customers. Services are revoked or changed with and without notice. And a lot of burden on the customer to fix, update, address the situation.
In Philadelphia for example, free parking - a post-COVID enticement to get people to use public transport - is about to go away (though the exact date is unknown.
If you’ve been one of the many thousands of customers who’ve enjoyed free parking at SEPTA stations, I’ve got some bad news for you: SEPTA is planning to discontinue free parking in its lots and garages.
In the pre-pandemic days, you had to pay for parking at SEPTA stations. But in March 2020, the world shut down and SEPTA ridership positively plummeted. SEPTA decided to let people park at its stations for free. Now that SEPTA use has been on the rise for a good while and with the agency in the midst of budgetary woes, SEPTA plans start charging for parking again. Source: Philly Magazine
The good news for Philadelphia area users of SEPTA, SEPTA is totally unprepared to accept any payment except for….wait for it…..coins. And, not just any coin - quarters!
There’s just one issue with SEPTA’s plan to do away with free parking. If you visit the parking lot today, the only way to pay for parking (if you had to pay for parking) is to stick quarters through a slot in a metal box assigned to your space number. No electronics involved! No paper currency! The agency is currently considering options to use, you know, technology. “We realize the public has moved on in terms of payment methods,” Busch says.
A few months ago, a notice popped up in my podcast app:
“After April 2, 2024, you will no longer be able to listen to podcasts in Google Podcasts”
Google sent me several emails advising me of the demise of the Google Podcast app and how I can use YouTube Music instead. With all of the data Google has gathered about me, somehow the company thinks I’d like to use YouTube Music instead of the podcast app. With all its data, it has no idea how infrequently I use YouTube on my phone.
I immediately found a new podcast app, subscribed to all of my podcasts, and uninstalled Google Podcast app. With all the data Google collects, it continued to send me notices after I uninstalled the app.
My satisfaction with my Android Google phone? Way down.
Several weeks ago, I got an email from the electric utility that they are implementing a new system and changing my account number. No specific date. Just a hint that in the “near future” the new system will go live, my current account number will be invalid and my bank’s bill pay won’t be able to pay my bills. Surely, with such a big deal planned system conversion, IT has told the marketing and communications team what that date is….
Wedding planners do a better job notifying guests to “save the date”
So far, the date is a mystery.
Balancing Emerging Tech and Features & Services
Emerging technologies are cool. But many financial institutions have struggled with how to implement them. How many of your mobile banking features do the customers actually use?
But, FIs are getting a front row to the public & immediate backfire of Wendy’s attempt to add on what looks like a cool new feature using AI:
Restaurants (okay, fast food) restaurants are investing millions of dollars in AI:
In early February, Kirk Tanner, the new CEO and president of Wendy’s, shared with analysts his various plans to increase company profits, including investing in digital menu boards that will have the capacity to display dynamic pricing that fluctuates throughout the day by 2025. Source Food and Wine
The company says that this will enable the restaurants to focus on food and leave the customer service to AI chatbots and AI-driven dynamic pricing:
[focused on] providing "great-tasting" food and is "making a significant investment" to grow its digital business, including rolling out digital menu boards in some U.S. restaurants. "Beginning as early as 2025, we will begin testing a variety of enhanced features on these digital menu boards like dynamic pricing, different offerings in certain parts of the day, AI-enabled menu changes and suggestive selling based on factors such as weather. Dynamic pricing can allow Wendy's to be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value. We will test a number of features that we think will provide an enhanced customer and crew experience."
Wendy’s immediately had to walk-back talk about dynamic pricing and assure customers that they aren’t going to do anything nefarious with data & prices.
What’s the similarity in all of these examples? Maybe quickly changing the relationship terms with one’s customers - in a way that leaves the customer without a feature or service that she expects - or relies on.
Ghosting is not a great strategy for retaining customers.
Photo by Andrew Neel on Unsplash
Banks That Ghost
Naturally, I started to think about the equivalent experiences in banking. What does that look like? Bank ghosting can take several forms.
Long ago, a client told me the bank was thinking of charging for bill pay. The service cost the bank a lot of money and customers didn’t pay for the service. Unless the customer is well prepared and reminded and consents that a service provided on a “free trial” basis that will become a for-fee service. Otherwise, customers have to figure out how to cancel a service they don’t want to pay for. Especially when they can get this service for free directly from billers or other banks.
A while back I wrote about the bank branch and ATM that disappeared from my neighborhood. The bank ghosted this neighborhood and the one a mile or so away. Both locations had tons of foot traffic. The remaining branch and ATM is 2+ miles away and can be reached only by car or a couple of buses.
I don’t think banks have to do anything special to ghost their customers. The legacy of the legacy systems and processes is enough to ghost them. Moving manual processes from the branch to digital form in a COBOL or FORTRAN system and then pushing those same processes to an iPhone or browser without having a look at the process(es) themselves, to think about whether and how they must change as the technologies and capabilities of those technologies change and can change processes.
What does this mean? Financial institutions believe they have to think long and hard, spend a lot of time and money analyzing how to start their digital banking initiatives. The first projects are right in front of you: All the ways you already ghost your customers (and prospective customers)
Do you create a series of interactions - whether all self-service or person-to-person or a mixture - that result in your abandoning your customers — and potential customers along the way?
FIs and digital banking solutions have focused for good reason well on account opening and onboarding processes to reduce friction and account abandonment. Providers like Digital Onboarding have developed capabilities that enable their FI customers to ensure that customers not only open new accounts but use them. This means FIs can connect processes that in a branch were, by necessity, disconnected & performed by different groups at different times.
Those legacy process sequences don’t rule financial services transactions. In fact, they may be hurting your bank - and ghosting your customers.
Takeaways
Financial Institutions:
Evaluate new features and capabilities in terms of what they add to the customer’s life. This seems like a no-brainer but not all features will add value. So, be careful about which trends and use cases your FI borrows from other industries.
Identify legacy processes that have migrated from branch to digital banking and take a hard look at how you can use technology to truly digitize them.
Think carefully before your FI takes away services and before you present what your FI perceives as benefits to the customers about the loss of those services.
Your FI still has customers’ trust - but maybe not as much as 25 years ago.
Thoughtfully identify which customers may benefit from a new service that replaces an old one — and those who may not.
Prepare for the change before you announce and deploy the change. Sure, you’ll update, upgrade, replace systems and processes and code, but don’t forget about all the people inside your organization - from the top to the bottom - who need to know about the changes, understand them and - most of all - accept them. If people in your FI can’t accept the changes, how do you think customers will like them?
Digital banking vendors:
Review your process for identifying and adapting emerging consumer and business trends in the broader environment to banking. This is your opportunity to show your customers and prospective customers that you aren’t digital banking copy cats!
Differentiate your solutions by demostrating capabilities that enable FIs to digitize legacy processes - instead of just copying them.
Who writes PivotAssets?
I’m an independent analyst, strategic advisor & consultant (& a former Gartner analyst). I’ve worked in and covered the banking industry for over 2 decades.
My aim is not to confirm what you know (and you are plenty smart!) but to challenge you & give you a fresh perspective & analysis on the transformation that is —and isn’t happening - in the industry.
How can I help you?
Want more insights and analysis on hidden tribes and leveraging your bank’s legacy? Need help positioning your digital banking solution or fintech to meet the demands of today’s banking environment? I have my own firm PivotAssets.
To collaborate with me - whether you want analysis of and feedback on your GTM strategy or sales presentation, write a piece of thought leadership relevant to your business, or want someone to organize and moderate a webinar series, podcast or panel, please contact me at stessa@pivotassets.co or via LinkedIn.
I’m also available for inquiry and strategy sessions via Third Eye Advisory.
Me, Elsewhere
I’m an expert advisor at Third Eye Advisory.
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