While as a banker, you might think that people have the same rational thought process as you when making decisions. However, this is too far from the truth. Often many consumers make in-the-moment decisions without weighing the pros and cons of each product or service. Thus, as a service provider, you need to understand how you can influence customer behavior. In this case, learn the psychology of banking to aid in customers’ decision making.
Technology has made it possible to offer personalized experiences that customers crave for using the power of analytics. It helps them feel like they are individuals that businesses care for. It gives an impression to the customer that we are striving for better services for the sake of their convenience. Above all, for the most part, this stands true.
However, to improve these experiences for a strong and lasting impression, financial institutions must first understand why people prefer personalization. This will ultimately enlist you among their trusted institutions.
You can employ tactics that help give you a competitive edge when it comes to promoting your bank’s product.
According to a 2017 Conversion Rate Optimization Report, around 93% of companies converted prospects into customers when they personalized their marketing. But what is it that makes personalization so effective? What tools do experts use to utilize the psychology of banking? How do they convert it to their advantage indefinitely?
1. The Power of Zero
The concept of free is a convincing one. Customers get highly motivated to buy something when they see the “free” label that comes with it. While that may be one of the add-ons for the service they’re buying, getting something for free in that package is enticing. This is the highest level of motivation a customer will reach when purchasing something.
Discounts fuel the excitement indeed. However, something being truly free always takes the cake. Provide customers with free bank statements, credit card reports, or cash-free online billing. It improves the customers’ opinion of the bank. In contrast, these services cannot indeed be for free. The cost is cut in some other manner or embedded elsewhere.
You can use this tactic on banks that run zero-closing costs loans. They can do so because with an increase in loan rate, a higher advance on the loan, or a hedging fee. This is an effective use of banking psychology to market your services and increase conversions on your online website.
2. Controlling Desires
According to a study conducted at the University of Texas, two factors drive a consumer’s desire to buy something personalized in online environments. These two factors are control and information overload.
New apps or updates have made it possible for people to control the content they get. They can manage what they don’t want to see and have a significant likelihood of seeing. This makes whatever they view overly customized to their needs. Some software emulates human behavior following a particular algorithm that allows them this opportunity.
As a result, consumers engage with content by controlling the trends through behavior and social sharing. When you offer information, products, or services to customers to their liking, they get something specified to their needs instead of something generic. Hence, they feel more in control, making your business easier.
The way consumers get personalized content is based on their previous activities, behaviors, or purchases. This history helps predict their future actions. In turn, your work becomes easy because it is enough information for a financial institution and helps customers feel special.
Personalized experience acts to give more control to the consumer and a smart way to avoid information overload. Above all, it allows you to remove irrelevant information promptly. Personalization leaves more room for engagement and organic traffic to online forums.
Suppose people know the content on a website displays the content according to their personalized needs or behaviors. In that case, they are likely to be more appreciative of it and engage more easily with it. When consumers realize someone else took the time to sort content for them, it helps them feel more relaxed and worry-free.
3. Influence of Emotional Arousal
Bankers often confuse people with making rational and sound decisions that are purely logical. However, often the case is the opposite. Emotional arousal is a vital variable in choice making.
You might not have to become a model or suddenly develop a charismatic personality to distinguish yourself on appearance, energy level, and character. You can do so by being well-dressed and exuding passion in what you do. This is a significant selling point in any business field, including banking.
The psychology of banking says if you mirror the customer’s formality, whole making a polished presentation, you are most likely to win the business. How you portray yourself impacts your brand and places it in a favorable or non-favorable position to impress potential customers.
You can get ahold of experts that can help build strong relationships with your clients through banking digital signage to promote your business.
4. Offering Choices
Despite people appreciating simplicity, and non-complicated website designs to follow, they are always looking for choices that can make them feel less restrained over a limited option. Albeit this goes against what we mentioned earlier in this article, but when you give people options, you need to create that balance where it isn’t too many that it is an overload or too little that they don’t appreciate it. If done well, choices can even enable control.
The power of selective attention can determine what impulses, information, or senses to pay attention to and focus on the most relevant information.
Personalized banking became a buzzword after Facebook, Amazon, and Google spurred customized interactions and created a space where data could be traded for a better experience. Thus, analyzing the psychology of banking became even more relevant. Targeting customer micro-segments and tailoring offers enables banks to build customer engagement and gain a competitive advantage.
Final Words: Psychology of Banking Branches
The biggest takeaway for banks is to stay ahead of the curve to improve their customer’s knowledge. Employing machine learning and data analytics can help deliver an omnichannel digital experience to your customers. Thus, personalization will require companies to work on their digital banking signage to create a strong and lasting impression on the customer.