The example of what firms such as Amazon are doing came up in the recent round-table discussion, which was videoed and featured industry figures and the editor of this publication.

The editors of this news don’t necessarily endorse all views of guest contributors and invite readers to respond. Email tom.burroughes@wealthbriefing.com

Amazon chief executive Jeff Bezos has a very simple concept for his business, which he calls the Amazon Flywheel. The tech giant has always been focused on maintaining a strong growth outlook, and the starting point for that growth is delivering an unmatched customer experience. The retailer’s superb customer experience drives constant traffic through returning customers and word-of-mouth. That traffic then allows Amazon to attract more sellers to the site. The more sellers there are, the better and more diverse the selection of goods to the end customer. This in-turn improves the customer experience, thus setting in motion the flywheel to drive growth.

This growth in turn spreads any fixed costs across a higher number of transactions, which allows Amazon to have a much lower cost structure. That structure delivers lower prices which improves the customer experience. So, if you can find what you’re looking for at the lowest possible price and have a frictionless customer experience, why would you go anywhere else to do your shopping?

Amazon’s growth has been truly spectacular, growing revenues faster than Google in the last eight years. So how else do they keep their place at the top of the pile? Aside from Amazon’s revolutionary, yet simple, model; there are three practical lessons that today’s retail banks can learn from Bezos’ model:

Understand that different customers look for different experiences

Sales experiences are different for each customer. Amazon invested in “One-Click” – the ability for its customers to store payment and delivery details for reuse, enabling a purchase at the click of a mouse. One-Click was so revolutionary that Amazon got a patent for this concept, and Apple now pays a royalty to Amazon every time a one-click purchase is made through iTunes. But Amazon recognise that One-Click isn’t for everyone. While it’s perfect for one-off product replacement purchases like chargers or headphones, the traditional and more familiar shopping basket may be a better option for large, multiple item purchases. Having both options readily available allows customers to create the experience which is most convenient and comfortable for them.

Similarly, in the world of consumer banking, there are many different paths to purchase. Some customers want a high-touch experience from their bank. They want the traditional guidance, complete with a needs analysis, product recommendations and guidance through the application process. Other customers just want a quick and easy ‘checkout’, they have done their research and know exactly what they need. Banks need to treat their customers as individuals, catering for all scenarios.

Just because someone doesn’t complete a purchase doesn’t mean they’re not interested

The premise is simple but is rarely acted on effectively by banks. It is vital that banks get better at generating and nurturing leads. If a shopper put something in their Amazon cart, but does not complete the purchase, Amazon almost immediately generates reminder emails as well as targeted advertisements with the ‘abandoned’ product, which remind the shopper. Applying for financial products takes time, and everyone is busy. So, if a customer takes the time to begin an application and goes to the trouble of filling out their name, email address and phone number, recognise that they are interested. If they don’t complete the application, you should still consider them a lead and follow up.

Avoka’s proprietary data shows significant success for banks that have followed up on applications that were abandoned or saved and never completed. One bank that followed up abandoned Personal Loan applications achieved a 40 per cent conversion rate. In follow-up conversations one parent explained that their child was sick whilst they were completing the loan application, so they abandoned the process. Life gets in the way; an uncompleted application doesn’t necessarily mean that the customer was not interested.

Adapt or die – have a real-time strategy for improving the customer experience  

Amazon has software and processes dedicated solely to continuously improving their customer experience through every channel that their platform can be accessed on. These processes are completely separate from any back-office technicalities, allowing for rapid and agile changes to the customer experience. The site is constantly evolving, and they continually tweak little things like the shape, colour, text, icons and fonts on the Add to Cart / Buy Now button. All of these experiments are designed to make it easier for people to complete a transaction.

It's vital that banks take note of this approach and start to put customers at the centre of their website and app architecture, particularly when it comes to their digital onboarding processes. In today’s fast-moving world, banks don’t need to wait until they’ve saved up stores of data to make major improvements to the digital customer experience. Instead, they should focus on making real-time, incremental changes to each step in the user journey.

Analyse metadata to see where people abandon. Or to see where potential customers get stuck for too long and where they use auto-fills. Use this feedback loop to look for trends and see if you can work out what’s happening and why.

Considering these three strategies, it’s easy to see the secret of Amazon’s success. By creating an individual and convenient customer experience, banks will put themselves way ahead of competitors. Your customer’s lives are complicated enough, so do something radical and help them out!