Incrementality Isn’t Enough: Keeping Pace With Evolving Digital Expectations

Real-time experience personalization, which was a pipe dream just a few years ago, is here to stay. We’ve all experienced, at one time or another, moments of ideal personalization: Netflix magically suggesting a much-loved film you hadn’t seen in years, a retailer suggesting the perfect pair of heels that would complete your look for work, or a travel site recommending that snorkeling excursion to cap off your vacation in Bali.

Leading technology companies and retailers are becoming dangerously good at presenting us with what we want, when we want it, oftentimes before we even know we want it.

But personalization platforms and strategies are hardly standard in all industries. A handful of industries — financial services, insurance, and pharma/medical, to name a few — are struggling to keep pace in the digital terrain. To stay relevant, especially with millennial consumers, they need to more quickly adopt digital-first strategies. Incremental digital iteration will not keep the ship afloat. A more daring approach is required.

Who is dropping the digital ball?

A McKinsey & Co report from this year’s annual “Digital Quotient” survey, found Insurance, Medical, Banking, and Logistics/Transportation struggling to stay relevant into our digital-first world. Companies across all four sectors were below McKinsey’s average digital maturity index score of 32.

McKinsey Digital Quotient

While they’re not exactly taking orders over the phone and ignoring broken website links, they’re miles behind your average online retailer, favorite publisher, or go-to online booking engine.

And for users accustomed to a high degree of personalization from their repeated exposure to retail and travel websites, insurance and banking’s lagging in this area won’t be tolerated. These consumers have been actively voicing their dislike and distrust for brands who don’t offer real-time personalization. The McKinsey report notes that nearly 80% of visitors gave positive appraisal to businesses with high digital quotient scores, compared with 36% of users reviewing digital lagging industries (finance, insurance, medical, etc.). Consumers’ expectations of personalization will only increase as technology and practices improve. If the digital laggards don’t start to close the gap between themselves and the customization leaders, growth will be stymied and existing market share might even dissipate.

It is important to acknowledge that eCommerce to online banking isn’t an apples-to-apples comparison. I don’t need a new pair of summer shoes the same way I need a savings account. One could correctly point out that business with life essential products — banking, health insurance, groceries, medicine — might not need to worry about creating lovely digital experiences because consumers need these inelastic products, regardless of the online interfaces that package them.

According to this logic, industries like health insurance might never need to personalize because people need their products regardless of how they’re presented to consumers. But that only works if all of the players in the industry decided to never improve their digital practices. All it takes is one player — either existing or new — to decide to modernize and disrupt the whole industry. And when they do, the lion’s share of the underwhelmed digital market is going to be theirs.

Personalization Pays Off For ActivoBank

ActivoBank is a leading Portuguese financial institution with a penchant for innovation. The bank set the standard in their digitally sluggish industry by overhauling the website to make it more closely resemble an online retailer. Its revamp included personalized offers triggered in real-time throughout the customer experience, websites that felt like e-commerce, and simple, non-banking language.

The gamble has more than paid off for ActivoBank. McKinsey notes that the bank’s growth rates (CAGR of 35%), revenue, and loyalty skyrocketed to best in class since they made the changes to the digital experience. While there are limits to what a bank or an insurer can do — they probably won’t ever reach the personalization capacity of a major internet retailer — their customers will notice and appreciate the progress you made towards meeting their expectations.

Crafting More Engaging Digital Experiences

ActivoBank’s experience with a more retail-like user interface and personalization can be replicated. Here are some concrete measures a digitally lagging company can take if it wants to move beyond A/B testing and half-measures and truly personalize its products and messaging.

  • Automated Optimization: Use machine learning to automatically reallocate traffic to best performing test variants. Incredibly useful on sites with low-traffic where conversions are less frequent and thus the opportunity cost of a missed conversion is higher.
  • CRM-based personalization: Onboard all CRM data sources, segmenting according to current or potential value, and personalizing site experiences per segment. This allows you to essentially retroactively apply your personalization efforts through a rearview mirror instead of having to start from scratch on Day 1 and wait for your program to accrue enough onsite behavioral data.
  • A Personalized “Digital Voice” (Net New Site Content): Layer custom notifications and overlays throughout the various stages in your user acquisition funnel. Make them feel like there’s someone there, every step of the way, with relevant offers and/or information.

Industries such as insurance and banking are fundamentally risk averse. But if to join their more digitally experienced peers, they’re going to have take the personalization plunge. Because, as one global eCommerce CDO recently pointed, incrementality can be a company’s “biggest enemy” when it comes to bringing about truly impactful change.

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