The power of context

Ben Leonard

March 3, 2020


Ben Leonard is chief executive and co-founder of Life Moments

Why creating contextual customer propositions can help to avoid mis-selling whilst driving cross-selling.

You often hear people say ‘I don’t want a mortgage, I want a house’ and, whilst clearly obvious, this often seems to fall on deaf ears in financial services.

To deliver great service to their customers, firms need to keep reminding themselves why their potential customers need the products & services they are trying to sell them and what their wider motivations are.

In regulatory speak, this involves capturing “soft facts” to help firms better understand their customers and also to demonstrate suitability.

Soft Facts

Gaining access to these soft facts can be difficult, however I believe will become more necessary as the regulatory landscape evolves and we all conduct more of our affairs online.

“The best firms are capturing soft facts. They help tell the client’s story. From a regulatory perspective, they provide the evidence the advice is suitable” – Debbie Gupta at the FCA recently remarked.

Whilst the context here was financial advice, surely the same logic applies to a non-advised, guidance-based, customer journey if a provider is to demonstrate that it is treating its customers fairly.

Alongside product education – where, advised or non-advised, the customer should always be provided with the information on how the product works – product sales which have context must surely be better for the customer and the firm.

So, how do firms gain this contextual insight when they only engage with the customer at the point of purchase?

Back to Front Onboarding

In a typical product sale, the understanding of the customer occurs during the onboarding process. Driven by regulatory requirements for Know Your Customer (KYC) and Identity & Verification (ID&V) it forms the administrative part of the sales process.

Instead of just following this approach, a lot can be gained if customer motivations are understood at the start of the journey rather than at the end.

Everyone has a story – a life moment which drives their motivations and needs for certain products – and most people are happy to share it if they get something back. This could be help, or even coaching, to navigate the wider life goal.

This is both an opportunity for engagement and a business synergy – as information required later in the customer journey can be collected early on. It also has scope to reduce the regulatory risk a firm has by providing early evidence that a product is suitable.

Delivering Better Customer & Commercial Outcomes

I firmly believe that goal-based, contextual propositions centred around life moments can support better customer outcomes. They can also deliver rich data insights through which firms can become truly customer-centric in a way that is consistent with today’s data-driven world.

There are also real commercial benefits including the ability to build a marketplace offering, reduce advertising spend and create internal efficiencies on data collection.

A marketplace of internal and third-party products can also reduce customer dead-ends creating once again a better customer journey.

Going on a Journey

How can firms find time to do this when digital transformation and regulatory compliance consume much of their budget and bandwidth?

They must evolve their current practice – the website, onboarding, marketing and more – by taking small steps, finding partners to work with and jointly going on a journey. By bringing these existing processes together and experimenting with new contextual customer propositions firms will learn and evolve – much quicker than by attending another conference!

One such firm going on this journey is Principality Building Society. We are delighted to formally announce our partnership and celebrate the launch of their new First Home Steps App which is powered by our LifeHub platform.

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