How to Connect With Customers, Differentiate Online Services and ...

How to Connect With Customers, Differentiate Online Services and Build Loyalty in Financial Services

2013 LivePerson, Inc.©

Financial Services White Paper

Table of Contents 1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. The Changing Face of the Financial Services Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Relationships Redefined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.2 Centralisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.3 The Rise of Mobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.4 Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.5 Sales Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

3. Challenges Facing Financial Services Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.1 Differentiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.2 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.3 Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.4 Losing the Personal Touch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3.5 The Digital Divide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4. Rising to the Challenge – Using Intelligent Engagement Tools to Enhance Internet and Mobile Banking Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4.1 Introducing Service into a Self-Service Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4.2 Don’t Wait for Customers to Ask for Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.3 Respond to Customer Behaviour - Smart Analytics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.4 Engage with the Right Information at the Right Time - Tools for All Occasions . . . . . . . . . . . . . . . 9

4.5 Getting to Grips with Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4.6 Mobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.7 The Importance of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.8 Cost-Effective Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

4.9 Through the Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

5. Customer Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14



1. Executive SummaryThe Internet has become the primary channel of communication for customers purchasing financial services and dealing with their bank, insurance or other service provider.

A study by Maritz Research1 found that 80% of UK customers saw the Internet as the main channel of communication with their bank.

The significance of this overwhelming majority underlines the paramount importance of online sales and customer service, not just in retail banking but across the whole financial services sector. For banks the Internet (including mobile) provides customers with all-important 24/7 access to their accounts whilst also providing new opportunities to sell financial products. It’s a similar story in the insurance sector where the High Street brokers of old have been replaced with comparison websites and aggregators. In the arena of motor insurance in particular, the Internet is the dominant sales medium and volumes are also growing in household and life. More specialist subsets of the financial services sector – including fund management, private banks, foreign exchange and investment banks have also embraced the web as the customer communications channel.

Customers Who Lose the Sense of Connection Become Less LoyalThe public embrace of Internet-delivered financial services provides institutions with huge opportunities to enhance customer service and drive sales but there are also major challenges associated with the move online. The web is primarily a self-service medium - and once transactional activity transitions to the online environment it becomes harder for any bank, insurance company or financial institution to differentiate itself from competitors, but it is critical that they do so. If customers lose the sense of connection that comes with going to a branch, they will become less loyal. For instance, in the UK banking sector a survey2 by Which? highlighted the similarity in poor satisfaction rates among the big players, finding that all of them needed to try harder to meet the service expectations of their customers. While this is clearly not good news for these providers, it does suggest that a well-executed online customer service will go a long way to satisfy customers and deliver competitive advantage for the providers. In the insurance sector, the differentiation issues are perhaps more acute where price comparison sites have encouraged consumers to differentiate entirely on price. The result is much less loyalty to providers when policies come up for renewal.

Self-Service and Product Complexity Don’t MixThe rapid uptake of online banking demonstrates that consumers like the self-service concept; however, it is clearly not an ideal model for all types of interaction. Complex products – such as term loans, mortgages or life policies – can be difficult to sell online. Sometimes the customer will become confused about the product itself and simply abandon a purchase. Even if a decision to purchase is made, long application forms are also a deterrent to the completion of the transaction. Telephone staff will certainly be on hand to help, but this involves leaping a barrier from online to offline – a barrier that, again, may result in the customer abandoning the transaction.

For customers who are managing accounts online, there should be opportunities for institutions to cross-sell and up-sell, but this also poses challenges in a purely self-service environment. Put simply the customer who logs in to transfer money won’t necessarily be receptive to loan offers.

Social media is increasingly providing institutions with a means to communicate with customers and to handle some service issues, but providing personal services via a public forum is not ideal.

In this White Paper LivePerson will demonstrate how financial institutions can drive sales and enhance customer service by introducing an element of personal service into their online customer experience. By integrating Live Chat, personalised content and analytics driven targeting – to identify customers in need of help or receptive to offers – banks and other financial services institutions can provide assistance to customers whenever it is needed. It provides a cost-effective means to connect with customers, differentiate online services and build loyalty.

1 Frequency of Banking Channel Usage Among UK Banking Customers, Maritz Research, 2012 2 Banking Survey by Which?, 2013

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2. The Changing Face of the Financial Services Market2.1 Relationships RedefinedThe continued roll out of online customer services is continuing to redefine the relationship between banks and other financial service providers and their customers. Indeed, for many institutions, the Internet has become the primary channel for engaging with new and prospective customers.

Online service in the financial services sector is, of course, just the latest development in a longer-term trend. In the banking sector, the arrival of ATMs in the late 1960s provided bank customers with a taste of 24/7 service, albeit tied to bank branches. The eighties brought telephone banking, allowing customers to conduct transactions at any time and any location. Online services have brought further flexibility and enabled customers to carry out a wider range of transactions.

This has proved hugely popular with consumers. The 2012 Retail Banking Consumer Survey by Capgemini3 found that more than 90% of consumers worldwide will be using online banking by 2015 and significantly, 60% of them are expected to use mobile banking (around 26% of UK consumers in 2013 use smart-phones or tablets for some type of banking interaction.3).

The importance of digital channels is further highlighted in a survey by Bain & Company 4, which found that in the UK, as in many other countries, digital channels are satisfying consumers who like the ease and convenience of going online.

It’s been a similar story in other segments of the financial services industry. For instance, in the case of insurance products, the Internet has become the primary channel for customers to select and buy policies in particular, with comparison sites taking over the role of the old High Street brokers.

2.2 CentralisationThe roll out of telephone and then Internet banking has gone hand-in-hand with the centralisation of administration and customer contact.

In the banking sector the local branch was the primary point of contact up until the arrival of telephone banking. Relationships were therefore local and in some cases personal. Today, when a customer talks to a member of a bank’s staff it is likely to be via the telephone with the agent working out of a centralised contact centre. Decisions on matters such as loan approvals are also made centrally. This strategy has enabled banks and financial services providers to reduce costs while improving access to services for customers.

Branches however remain important to customers. Nevertheless, the move away from face-to-face banking towards online interaction will clearly have an impact on how banks and their brands are perceived.

3 Retail Banking Consumer Survey, Capgemini, 2012 4 Bain & Company, 2013

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2.3 The Rise of Mobile The progressive roll out of ATMs, telephone banking and Internet banking has provided customers with the means to access their accounts and carry out transactions at any time. The growth of mobile services is the next stage of this journey. A desktop PC allows you to transfer money and compare insurance prices from the home or the workplace; mobile services extend that facility to the train or the café.

Smart-phones – notably the iPhone and other rivals – have become ubiquitous. With large screens and intuitive user interfaces, these devices have become replacement computers for many consumers, particularly when it comes to accessing online services.

So far the uptake of mobile banking has been steady but this is changing. Market intelligence company Forrester5 suggests that by 2017 46% of US consumers will use mobile banking while today just 13% of US and 9% of European mobile phone owners regularly use their banks’ mobile banking tools.

Banks and other financial services companies have responded to consumer demand by releasing mobile apps and payment systems and the IT infrastructure of branch networks is being overhauled. Barclays Bank for example has rolled out Wi-Fi to its branches across the UK and plans to introduce multifunction touchscreen devices to serve branch customers. But banks in the UK still have a long way to go to match the mobile banking experiences of consumers in both the US and Asia.

A survey in 2012 by IT supplier Infosys and banking association Efma6 found that, of the 300 banks in 66 countries surveyed, 70% of respondents planned to increase spending on innovation, with mobile and online channels seen as the most important delivery channels to invest in.

Digital innovation is increasingly seen as a good investment in improving the customer experience.

2.4 Social MediaThe whole arena of social media – from Facebook and Twitter through to forums and wikis – presents an area of opportunities for banks but also a challenge.

On the opportunity side, networks such as Facebook and Twitter offer cheap and effective marketing tools and potentially customer service channels. In this respect banks can potentially use social media to:

Equally, financial services companies can use forums as a channel to build relationships with customers and partners. As an example, American Express has created the “Open Forum” to facilitate the sharing of ideas and experiences between its business customers. Similarly Morgan Stanley Smith Barney has launched Advisor Insights, a social networking site for the financial community.

There is huge interest in this area. In the US, Citibank and Bank of America have pioneered customer service via Twitter and in the UK, HSBC serves customers via Facebook. Barclays is also on Facebook and aside from its banking pages it also uses the network to promote its sponsorship of the Premier League.

5 Consumer Technographics Benchmark Study, Forrester, 20126 Innovation in Retail Banking Study, Infosys and Efma, 2012

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• Talk directly to customers and fans

• Market new products

• Offer financial tips and advice

• Identify and address the concerns of dissatisfied customers

• Carry out some elements of customer service



But social media has its challenges. Financial services companies must take steps to ensure conversations started in public forums remain private as soon as the content includes confidential customer data. Also of concern is the open nature of social media as a public space where customers and critics can let off steam. Any company interacting with the public via social media channels must be cognisant that Facebook pages, Twitter feeds and forums can easily become the focus for unwanted criticism and so conversations that start on a public forum don’t necessarily want to continue there.

2.5 Sales Opportunities Most financial services company websites offer two categories of content. Public web pages open to everyone and private content and account services accessible only by authenticated customers. The public pages are clearly the first point of contact between institutions and prospective customers. Private pages not only provide the means for customers to manage their accounts, they are also an important platform for cross- and up-selling.

Online customer account management is now a mature service. We know from studies of the European banking sector that once a customer starts to use online banking services the frequency of access is high. Forrester 7 highlighted back in 2009 that 32% of European bank customers were using online banking and out of that group 92% used the secure site at least monthly and 63% at least weekly. Whilst frequency of access is high, what’s more important is that online banking tends to attract higher value customers. Forrester found at that time that 42% of online users had a “high education” compared with 22% of branch users. Online banking customers had significantly higher incomes and assets than offline users.

When customers login to manage their accounts they have effectively walked through the branch’s front door. It represents an opportunity to engage in conversation and to evaluate the customers’ needs. With fewer high value customers walking into branches the ability to up-sell and cross-sell has moved online.

7 Driving Sales on Bank’s Secure Sites, Forrester, 2009

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Citibank is using Twitter to differentiate the service they provide to customers. In an environment where 60% of companies don’t respond to customers via social media, Citibank is enabling customers to actually resolve issues securely via social media sites. Working with LivePerson’s chat integration, Citi customer service agents can now initiate dialogue with customers on Twitter using a dedicated chat link to respond to their personal needs.

“In my view, the consumer controls your brand in these types of social spaces and they control your image. You have to be listening to them, whether it’s via social media or on the phones. You have to listen to what they’re telling you and find solutions to meet their needs. And by doing so, you can improve customer satisfaction, which is measurable…We’re getting in touch with the customer the way they want. It’s something that’s easier and fits the customer’s style. ” – Frank Eliason, SVP of Social Media, Citibank



3. Challenges Facing Financial Services Companies3.1 DifferentiationOn the face of it the UK financial services sector has to do a lot more to satisfy customers. Research by Which?2 showed that satisfaction levels amongst customers of the big High Street banks needed improvement.

With online interaction becoming the primary point of contact between banks and consumers the challenge for retail banks is how to differentiate and attract new customers in the future and deliver a great online customer service experience.

But how does a bank differentiate itself when it provides, what can arguably be considered, commodity services through an online service? Currently none of the banks are differentiating themselves through the excellence of their online services, but shouldn’t they be doing just that?

A similar challenge exists for other sectors of the financial services marketplace. Whilst there is relatively little churn among current account holders (as opposed to savings, mortgage and other non-core products) insurance companies enjoy relatively little loyalty.

Back in 2010, 63%8 of motor insurance policies were bought online and while the percentage for household and life products was lower, the trend towards web sales was increasing even then. As sales transactions have moved further online customers have become less loyal. Price comparison sites are driving price-sensitive behaviour on the part of consumers as they replace the traditional broker, with consumers deciding whether to buy or renew a policy based on the price. In this environment it is difficult for insurers to differentiate themselves, but offering clear differentiation on customer service, personalised real-time promotional offers and proactive assistance can have a significant influence on customer acquisition and retention online.

3.2 TrustTrust in the financial services sector has deteriorated sharply in recent years. “Confidence and trust have traditionally been synonymous with banking…in recent years banks, along with other financial services, have lost people’s trust and confidence,” says Martin Wheatly, Head of the UK’s FSA.

Certainly the whole financial services sector - from retail, business and investment banking through to the insurance, fund management and IFA industries – has suffered a downturn in public confidence since the advent of the financial crisis and throughout the tightening of credit and economic downturn. Banking has been hit particularly hard, with the origins of the crisis in the US sub-prime loan market raising questions about lending and marketing practices not just in America but in the rest of the world. Subsequent to that revelations about derivatives products increased concern about the practices of investment banks while turmoil in the financial markets has undermined investor trust and confidence. In a separate development, UK-based banks have been subject to intense scrutiny over the selling of loan payment protection insurance policies and High Street lenders are now in the process of paying back millions of pounds to customers.

None of this directly relates to the online market in financial services, but there is an indirect link. Customers buying any sort of product online are to a large extent basing their investment decisions on the brand experience and the information they have access to. Trust in both the product and the institution is an all-important ingredient. And when transactions are conducted remotely through call centres and online, the lack of any reassuring presence of an advisor or agent may serve to emphasise the distance between the customer and the institution. Arguably that distance makes it harder for institutions to build, rebuild and maintain trust.

2 Banking Survey by Which?, 2013 8 Insurance Market Review, Accenture, 2010

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3.3 Complexity Financial services companies offer a range of products and services from the relatively simple – transferring money from one account to another or adding a second driver to an insurance policy – through to the complexities of mortgage or loan applications.

The selling of complex products has traditionally required the input of a sales or customer service agent to provide advice or simply to guide the customer through a lengthy and perhaps confusing application process. So selling complex products where the website is the first point of contact can be challenging. The tried and trusted method is to encourage the customer to ring a call centre but this requires a shift from one channel to another. Rather than make the call, the customer may simply abandon or continue his or her research elsewhere.

3.4 Losing the Personal TouchIn retail banking, regular contact between customers and branch agents not only reinforces the brand and the existing relationship (customers see familiar faces and engage in conversation) but also provides opportunities for cross- and up-selling of products. This can be proactive (with agents taking the opportunity to mention, say, mortgage products or rates on an ISA) but it can also be reactive. Once in a branch a customer may take the opportunity to ask about a specific problem such as borrowing for a car or shifting debt from an overdraft or credit card to a term loan. Often this will provide an opportunity for counter staff to put the customer in touch with a financial advisor.

Cross-selling opportunities certainly exist online. Existing customers are easier to sell to and secure sites in particular allow financial services institutions to personalise offers based on the history of individual users. Offers posted on the landing page or at points throughout the customer journey can be very effective. However, communications of this kind often lack intelligence and the responsiveness to customer needs that is expected in face-to-face encounters.

A piece of research conducted by Accenture in early 2013,9 which looked at the depth and quality of customer interaction with banks, showed that human contact is declining as customer activity in branches falls. Interestingly interaction on mobile platforms – involving quick, transactional interactions only – has doubled. The challenge for banks is therefore to re-engage with customers when they’re online or on mobile devices. Rolling out user-friendly, personalised digital channels can facilitate this; focusing on the customer experience, across all channels, can strengthen these relationships and reduce customer churn.

3.5 The Digital Divide The move from offline to online contact impacts on personal contact right across the financial services spectrum. Customers expect to be able to manage their accounts, investments and policies online and yet still expect fast and immediate answers to questions. If the only option is to switch channels and pick up the phone or send an email customers will get frustrated as leading brands are raising the bar and bridging the digital divide with proactive online real-time help. Today’s leaders in financial services are providing an enhanced level of service that digital technology makes possible, engaging their customers in conversation online or personalising offers that create more meaningful personal relationships that build long term loyalty and value.

9 Accenture Annual Survey, 2013

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4. Rising to the Challenge – Using Intelligent Engagement Tools to Enhance Internet and Mobile Banking Services4.1 Introducing Service into a Self-Service EnvironmentThe web is often seen as a purely self-service environment in which customers map out their own journeys without any live assistance from sales or customer services agents. Assistance is, of course, usually available through a contact centre number or email. The former requires the customer to transfer to a different channel while also surrendering the autonomy associated with online research, while the latter is often perceived by customers as a slow or unreliable means to contact the provider. Neither are ‘live’ in a true sense. Even the simple act of acquiring product information via a telephone call can turn into a protracted process as the customer navigates through IVR or voice-activated menu systems and a raft of security questions. Email can take hours or days for replies to come through and more often than not require more than one exchange to get the answer to a question. As a result customers often leave the site as immediate help is not on hand.9

But the web needn’t be a purely self-service medium. Increasing numbers of financial service providers are using LivePerson intelligent engagement tools and strategies to target customers and prospects and offer online assistance at key points on their online journeys to reduce unnecessary calls and deflect emails. Help can be provided through a range of intelligent options including Live Chat, Video Chat, Click-to-Call and personalised content.

9 Accenture Annual Survey, 2013

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Immediately

Within 5 minutes

Within 30 minutes

Within an hour

Within a day

Within a week

As long as it takes

31%

40%

11%

5%

10%

1%

2%Source: LivePerson Connecting with Customers Research 2013

Customer expectations in accessing online help

Ross McEwan, Chief Executive of RBS, said he intended to position the organisation as Britain’s Best Retail Bank. To that end, the bank has already begun a £700m revamp aimed at improving branches and the handling of customer complaints.

The ambition to create a truly customer-friendly bank is also apparent in the bank’s online strategy, which includes improved customer services through chat-led live engagement.

By rolling out Live Chat, RBS is enabling customers to carry out their banking activities online, even when they have a query or a problem. In the past, service was provided by call centre hotlines but when the bank introduced live engagement it began to migrate customers, a process that culminated in a decision to turn the hotlines off in 2012. The system is absolutely secure thanks to an identification and authentication widget provided – along with the live engagement platform itself – by LivePerson.

More innovations are set to follow in the shape of mobile apps and chat links via social media.

RBS’ Strategy Director for Webchat and New Social Media, Alice Fryatt, has pointed to higher satisfaction rates and more efficient handling of customer queries.

“Going to the bank will never be thrilling. But people rightly expect it to be quick and efficient with support on hand.”



4.2 Don’t Wait for Customers to Ask for HelpLive Chat with customers is not a new phenomenon but many aspects of implementation, the technology and strategies for intelligent online engagement are very new. Ten years ago, US bank Wells Fargo offered chat on their website to provide online customers with opportunities to talk to contact centre staff in a bid to improve conversion and approval rates and inject a human element into the process of searching online for a loan product.

However the company’s initial experiment with Live Chat failed to deliver significant improvements in sales and customer satisfaction. It wasn’t until 2009 when Wells Fargo reviewed its approach and implemented a proactive online engagement strategy that the real benefits began to accrue.

An analysis by Forrester Research10 highlighted the differences in a proactive online engagement strategy that targets customers. Firstly, Wells Fargo changed supplier and partnered with LivePerson. They used LivePerson analytics to identify patterns of customer behaviour that would indicate a customer was at risk of dropping off the site. This real-time information enabled the company to analyse customer behaviour in real time and target those who needed help. LivePerson intelligently serves chat invites knowing that the customer is likely to be receptive and that a chat agent is immediately available to answer questions without delay.

Secondly, Wells Fargo wanted to talk directly to customers who had arrived at its site as a result of external promotions. This was achieved by prioritising invitations to customers who used specific keyword search terms, or clicked on links in email offers and on promotional pages presented during the session.

Since implementing proactive chat, 92% of customers who chat are highly satisfied and home equity conversions via the website have risen by 30-40% when compared to the period before live engagement was introduced.

Much of the pioneering activity in online engagement started in the US but the UK is leading Europe and well-known institutions such as Aviva, Barclaycard and RBS have many years of experience with proactive online engagement. RBS is now rolling out chat as a strategic element of its wider ‘helpful banking’ mission with the objective of delivering a personal pocket bank manager to its customers.

The solution on offer from LivePerson enables financial services institutions to address the key challenges highlighted in the preceding sections.

4.3 Respond to Customer Behaviour - Smart Analytics Smart behavioural analytics tools underpin intelligent real-time engagement with customers. The starting point is an analysis of customer behaviour on any given website, to identify the common indicators that a customer is frustrated, lacks information, is confused about a particular product or is simply about to abandon a transaction process at the last minute. This benchmark data can then be compared in real time to the behaviour of individual customers as they navigate through a site.

The next element is to develop a set of business rules which determine when a sales agent will intervene with an offer of assistance. The rules (and therefore the intervention) will depend on the objectives of the campaign. For instance, if the aim is to increase conversions, then the rules may dictate an intervention if a customer hesitates before committing to a transaction or if his or her online behaviour – say scrolling through an FAQ - indicates that more information on a product is required.

The intervention can take a number of forms. The simplest is to offer the customer a personalised message specific to the objectives of the campaign, which could be a promotional offer to encourage a purchase or a signpost link to further information when clarification is sort. If the customer displays signs of distress and abandonment an invitation to chat with an agent where any question can be answered may be more appropriate. However, the same analytics can also be used to underpin communication by video or an invitation to receive a telephone call-back. The choice is down to you and what you deem is best to help the customer based on their behaviour.

10 Wells Fargo Proves The Business Case For Online Chat, Forrester, 2012

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4.4 Engage With the Right Information at the Right Time - Tools for All Occasions Intelligent engagement is helping financial services companies address the challenges of new customer acquisition, customer retention and improving the effectiveness and cost efficiency of customer service.

Setting the objectives for your online engagement strategy is critical, as it will determine which groups of customers and website visitors to focus on and target. LivePerson enables website visitors to be segmented into target groups that reflect where they are in the customer lifecycle. These groups could include:

How you engage with each particular group will depend upon a number of factors but is usually influenced by the:

Where financial services companies have implemented online engagement, typically they do so in those functions where there is the highest volume of calls or where digital interaction is better suited, such as when customers enquire about their balances, available credit and recent transactions. These companies ‘teach digital’, meaning they offer a digital channel where it makes the most sense to do so and where it makes the largest impact on customer experience; and they teach consumers to make use of these facilities.

• Website visitors who are researching a particular class of product (e.g. a high margin loan product) and appear to need more information

• Website visitors who use specific Google or other search engine terms e.g. ISA or multi-car insurance

• Prospective customers who need help with completing an application process

• High value customers who have significant disposable income and are interested in savings products

• Customers who exceed their overdraft limit and may need advice managing their account

• Customers who are late with loan payments

• Customers who are about to cancel and are reading policy cancellation terms

• Customers whose profile/transaction history indicates they may need financial advice

• Customers who are searching support FAQs but do not find an answer

• Customers who are about to pick up the telephone or send an email

• Value and importance of the segment

• Stage in their website journey and customer lifecycle

• Expectation of the visitor or customer given the nature of their enquiry

• Desired outcome of the engagement

• Cost per interaction

• Availability of potentially limited agent resources

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Australia’s Bankwest is running a trial where 40 of its home loan and business bankers are participating in Live Chat sessions with customers visiting the bank’s website.

Bankwest uses LivePerson to track a customer’s website movements. Based on a series of pre-determined rules (such as if someone seems to stall when filling out a home loan application), the service automatically offers website visitors a Live Chat with a member of the bank’s staff.

Commonwealth Bank, ANZ and NAB’s UBank also use the system.

Jane Muirsmith, Head of Online for Bankwest’s retail bank, said that a trial of LivePerson across three products exceeded targets in terms of conversions (browsing turning into sales) and customer satisfaction. LivePerson has now been extended to all products on the bank’s website.

“We know when they’ve hit a brick wall and we can offer to help them ”she said, adding that an additional benefit was that a chat session allowed a bundle of products to be offered to a customer, depending on their needs.



For example, if a customer is browsing savings products after recently receiving significant funds into their current account, you may want to prompt the customer with a personalised offer. It’s probably inappropriate at this point to invite them to chat. Personalised content can present them with targeted information, highlighting the latest ISA product or a new savings promotion for existing customers.

If the customer then goes on to apply for the new savings product but backs out of the application process, they are more likely to need assistance and an invitation to chat is more appropriate. Most web users are familiar with chat and probably use it regularly on Facebook, Twitter, Microsoft Live etc. Those who haven’t chatted online have almost certainly sent and received SMS messages. In other words, text-based chat is an entirely familiar concept. So having agents on hand to talk to customers using chat is an intuitive way of bringing appropriate personal contact to the self-service environment.

There are essentially two ways to introduce Live Chat to a website – reactive and proactive. In the case of the former, a ‘click here to chat’ button is posted permanently on screen giving the customer the option of contacting an agent at any time. In the case of proactive engagement, chat invites are served selectively to customers based on their behaviour and implemented business rules.

Both approaches allow customers to ask questions or seek advice without leaving the online environment. However, the proactive option is often more effective because it allows financial services companies to target and therefore focus potentially limited contact resources on selected groups of customers. The cost of using chat agents to engage website visitors needs to be carefully considered and a business case developed to prove the value. In this example the margin from new savings products sales should more than cover the costs.

So just as in a High Street branch, where financial advisors decide how and when to engage, LivePerson can do the same on the web. If a consumer hesitates on an application completion page or doesn’t enter their credit card details to complete the purchase of a product or they move from the knowledge base and FAQ pages to the contact us page, then you may decide to use LivePerson to offer live assistance as they are displaying clear signs of needing help.

Engaging with chat is typically half the cost of engaging via the telephone as one agent can chat to several visitors at the same time. During the conversation an agent can assist the visitor to navigate around the website by pushing links to new content enabling the visitor to jump to relevant pages. They can use desktop sharing to assist with applications and filling in forms, send documents and play videos to explain products, concepts and processes in more detail. Something that is more challenging to do when the conversation starts on the telephone.

However there may well be situations where when the visitor is on the website, the phone is the best form of communication. For instance, if a customer is thinking of cancelling a policy or a contract or is about to withdraw thousands of pounds from an account LivePerson may offer an immediate option to “click here and we will call you back right away” (or start with chat and escalate to a telephone call). The benefit of using LivePerson in this case is the agent knows exactly where the customer is on the website, understands what they have been looking at and provides the agent with the context of their online journey.

To make conversations even more personal, memorable and meaningful LivePerson also enables Video Chat and video calling. Chat centres can decide whether to offer two way or one way video where both the customer and agent see each other or the customer only sees the agent. Chat, audio and video can be combined to deliver a rich multimedia, personal concierge service for retention, up-sell or cross-sell purposes particularly appropriate for high value customer segments.

So online engagement is not simply about adding a chat button to your website. Rather it’s a complete strategy for engaging the right customer, at the right time, using the right channel with an offer of information or live help.

In other words, online engagement strategies can be tailored to provide the same kind of customer service that would be available at a bank branch or in face-to-face meetings with an IFA, insurance advisor or fund manager.

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US bank National City provides a good example of the benefits of Live Chat in a real world setting. Headquartered in Cleveland the bank operates across retail and commercial banking, mortgage lending and consumer lending. With much of its business going online the bank was seeking to differentiate itself.

The solution was the introduction of Live Chat with agents proactively offering to explain fees, rates and other aspects of the product. Underpinning this was the philosophy that customer advocacy drives business and that is, in turn, dependent on customers feeling that the bank is doing what is best for them.

By providing advice proactively through chat conversion increased significantly. Indeed the conversion rate for those who chatted to agents was six times higher than those who self-served.

4.5 Getting to Grips with Social Media No business can afford to ignore the power of social media. Facebook has more than one billion users around the world while Twitter, the other big player has more than 500m. Not all of these users will be active but no one can deny that checking tweets and updates is one of the most popular online activities. It is not commonplace for financial institutions to publicise offers, publish news releases and handle customer service through these and other channels.

Chat (along with other forms of intelligent engagement) is primarily seen as a solution that companies implement on their own sites. However, LivePerson’s platform enables businesses to integrate Live Chat and other forms of intelligent engagement with third party social media sites.

This has been done very effectively by Citibank. The bank uses Twitter to communicate with customers but as a public forum this clearly isn’t a suitable medium through which to discuss account details. By integrating Twitter with LivePerson’s chat solution, Citibank has developed a channel within a channel in which personal financial details can be discussed securely.

It’s not just a question of security. Private chat sessions also enable institutions to deal with complaints away from public social media arena.

Just as offline branch service personnel are set goals and their performance is monitored and managed the same is true online. These strategies may coincide and complement offline promotions and advertising where customers may require additional encouragement and advice.

Adding a personal touch to online stores and virtual service and support desks provides a perfect means for companies to address the key online challenges:

• Differentiation. Financial services products can be differentiated with services. By enhancing customer service through live engagement institutions can gain a competitive edge over rival sites.

• Complexity. Agents can advise customers on products at the research stage (What exactly is covered by a particular insurance policy? What is the minimum monthly payment on a life policy?) or provide practical help in the application process.

• Cross-selling and up-selling. Chat sessions provide an opportunity for agents to advise on other products.

• Trust. By providing good advice institutions can build meaningful and trusted relationships with customers.

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MORE TH>N, the UK-based insurance provider, more than doubled its conversion rate within the first few weeks of piloting Live Chat, and obtained an 87 percent customer satisfaction score.

The pilot enabled the company to capture additional revenue opportunities that would have previously been lost. In fact, 53 percent of website generated sales, over the course of the pilot programme, would have been lost had a Live Chat agent not intervened.

Due to the success of the pilot, MORE TH>N has incorporated LivePerson throughout its home and motor insurance web pages as a main communication channel to drive online sales and improve customer satisfaction and support.

The company was also honoured with a British Insurance Award in e-business for its successful pilot of LivePerson’s Live Chat solution.



4.6 Mobile Mobile commerce is on the rise, through apps and smart-phone optimised websites. Mobile users are comfortable with text-based communications - ranging from SMS to tweets and Facebook updates - so Live Chat is an ideal channel for those who bank with handsets. Chat sessions can be triggered by customer activity on a website or banking/supplier app but sessions can also be opened by inviting users to scan QR codes in magazines or branches to find out more information on specific products.

Chat conversations on mobile tend to be very focused and shorter resulting in even more efficient and cost effective engagement. Engagement via mobile is convenient, reduces customer effort and is easy for customers to access. Customers are increasingly using mobile access to the Internet to get immediate answers to their questions whether in the High Street, in a cafe or on a train and brands need to be available. Live Chat with customer service in these environments is quiet and confidential and customers love it. Brands love it because chat creates a connection with customers and builds long term loyalty through highly satisfied users.

4.7 The Importance of DataThe effective use of intelligent engagement through Live Chat, Video Chat, telephone and proactively served content is dependent on good data. Without actionable information on the customer it is impossible to provide timely and relevant customer service. The LivePerson platform allows data to be leveraged from a number of sources, including:

• Real time behavioural analysis

• Transactional and account data owned by the financial institution

• Keyword data, revealing what the customer was searching for on a search engine prior to arriving at the site.

• Third party demographic data

4.8 Cost Effective Service For prospective and existing customers, intelligent engagement offers an additional service to the 24/7 access expected by Internet users. It is also a highly responsive channel through which the customer can expect instant contact with a customer services agent, rather than the sometimes frustrating process of queuing up to talk to someone by telephone.

For institutions it is a cost effective way to provide service that has a very high level of satisfaction. In the case of online chat, customer service agents can chat with several customers simultaneously. So by moving interaction from email and phone to chat, businesses can handle more conversations using fewer people. The result is better service without additional cost.

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4.9 A Tool for the Entire Customer Lifecycle The starting point for most Live Chat deployments is determining how to help customers who are showing purchase intent, to assist them to complete orders on the website. Customers will need help when buying new financial products or simply managing their accounts. Live engagement enhances service for these customers.

By the same token it also provides a back channel through which institutions can receive feedback from customers on the quality, ease of use and functionality of the website. By analysing customer data, whether in a chat transcript, email, call recording, CRM note, survey or on social media, financial services companies can hear the ‘Voice of the Customer’ (VOC) and understand whether their digital propositions are working. Companies can gain a deeper understanding of their customers’ perspectives on different products, service levels and position in the market.

Collect your chat transcripts along with a broad range of structured and unstructured data from both internal and external sources. All data can be transformed into a common language, allowing related data to be logically combined, thereby revealing truly meaningful and actionable insights that reflect a 360-degree view of the enterprise, and empower a wide range of management initiatives.

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5. Customer Case StudyOne of the largest issuers of credit cards in the US first introduced Live Chat on its website with the aim of increasing application completion rates and improving the visitor experience for new cardholders. Using LivePerson as the technology platform the company helps visitors choose the right card and provide assistance with the online application process.

The LivePerson deployment includes both reactive and proactive chat. Customer’s ‘react’ to buttons which are placed on screen allowing customers to call up a chat agent on demand. In the case of proactive chat, LivePerson serves invitations to customers based on their behaviour at key points on their customer journey on the website.

LivePerson monitors specific events, such as click-through paths, time on a page, previous visits and current cardholder. These are the clues that indicate a visitor’s propensity to apply for a card. Hot leads are invited to chat with advisors.

By engaging “hot” leads through proactive chat, the company drove 900 incremental card applications in a single month. The conversion rate for visitors who chat is 27.5%, almost double the site’s 16.4% rate for those who self-serve.

The success of this strategy has led to further innovations. Live Chat assistance was extended to cardholders who have difficulty logging into their online account. The company had two objectives. Firstly, to enable increased self-help usage and thus drive operational efficiency. For instance, customers who received password errors online (a key driver of service calls) would be proactively invited to chat, with the intention of deflecting customer service calls and emails to the more efficient chat channel. By shifting service requests from telephone and email to the highly-cost effective chat, the company reduced the average cost per interaction by nearly 50%. Additionally, with the ability to assist multiple visitors concurrently, chat agents are able to double the number of customers assisted per hour compared to phone agents, saving the company thousands per month in deflected calls and emails.

Secondly, careful monitoring of customer responses through chat exit surveys has allowed the company to better understand their customers’ online experiences. 66% of customers who engage in chat fill in the exit survey and this has provided a significant amount of intelligence, including whether a customer would have called support if chat were not offered, how many contacts were needed to resolve their issue and the visitors’ overall satisfaction with the chat experience. Customer feedback has been overwhelmingly positive, with a 93% customer satisfaction score.

The survey results demonstrate that customers are more than willing to embrace the chat concept, with more than half (56%) saying chat was their favoured communication channel. This compared to just 10% favouring email and 15% preferring the telephone. 90% said their problem had been solved by chat.

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Reduced support costs

Per-chat costs nearly 50% Lower than the

cost per call.

Increased first contact resolution rates

An average 90% first chat resolution rate

Increased application completions

27.5% chat-assisted conversion rate almost double the site’s

self-serve conversion rate.

Improved agent efficiency. On average, agents chat with 20 customers per hour (compared to 10 customers per hour assisted via the telephone).

Generated customer feedback

66% of visitor’s complete chat exit surveys.

Increased customer satisfaction

93% customer satisfaction score.

Results



As this case study illustrates live engagement is an effective medium to improve customer service, enhance loyalty and increase conversions while also driving down costs by moving interaction away from the telephone and email to a more efficient and responsive channel.

About LivePerson LivePerson, Inc. (NASDAQ: LPSN) offers a platform that enables businesses to proactively connect in real-time with their customers via chat, voice, and content delivery at the right time, through the right channel, including websites, social media, and mobile devices. This “intelligent engagement” is driven by real-time behavioural analytics, producing connections based on a true understanding of business objectives and customer needs.

More than 8,500 companies rely on LivePerson’s platform to increase conversions and improve customer experience, including Hewlett-Packard, IBM, Microsoft, Verizon, Sky, Walt Disney, PNC, QVC and Orbitz.

LivePerson has received the CODiE award for Best eCommerce Solution in 2011, has been listed as one of America’s 25 Fastest-Growing Tech Companies by Forbes in 2011, and has been named a Company of the Year by Frost & Sullivan in 2010. LivePerson is headquartered in New York City with offices in San Francisco, Tel Aviv, Atlanta, London and Melbourne.

Contact LivePerson (UK) Ltd. T: +44 (0) 333 666 5483 250 South Oak Way F: +44 (0) 870 130 6690 Green Park, Reading [email protected] RG2 6UB, UK www.liveperson.com

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