The Microdecision Mindset

When marketers consider how customers make buying decisions, their focus is usually on purchases, subscriptions or signed contracts. This makes perfect sense inasmuch as those are the decisions that generate revenue. But think for a minute about all the decisions that leads customers to their final decision, e.g., conducting a web search, visiting a web site, downloading – and reading – a case study, clicking a button to subscribe to emails. Without all of those the decisions, the customers’ final decisions may not have occurred.

So my point is: We can’t downgrade the significance of the final decision, but we should upgrade the significance of all the “microdecisions” that are made that came before that decision. By not giving each decision its due strategic weight, we risk missing key opportunities for optimizing conversions. Even referring to this string of decisions as a “customer journey” creates an impression of an adventurous Bilbo Baggins wondering off from the Shire, rather than appropriately understanding it to be more like the years-long endeavor of actor Martin Freeman and the meticulous planning of director Peter Jackson, each step is affected by what happened before.

According to a recent study by Noom (take this with a grain of salt), humans make 122 informed decisions every day. Focusing on only one seems like a lot of missed opportunities for marketers to influence prospective customer behavior.

Any time marketers approach their work, then, they should be examining the situation and driving for clarity about exactly what they want the audience to do in response to the key stimulus. Is it: Read the email, click on the one CTA or multiple CTAs? Watch at least part of the video in the social feed, the whole video or click through from the social post to a website? Each of these is a slightly different action that requires different thinking from the marketer about how to compel the desired action. Without this clarity, it becomes strikingly easy to lose sight of what’s most important and end up falling victim to the “can’t we just add this too?” trap.

Having a microdecision mindset is not only a more effective way to produce the desired action, it’s also a boon to marketers who constantly have to fight back the tide of “just add this.” It becomes a powerful lens through which to evaluate tactical changes: Will the changes facilitate or undermine the ability of the audience to make the ONE decision you want them to make? For example:

  • If you want them to register for your webcast, don’t also try to get them to click to read your article.
  • On the other hand, if you want them to click on something in your email vs. nothing, then go ahead and add the article link.
  • If you want your audience to both engage with the post and then watch a video on a social platform, don’t feature a strong CTA to click on.
  • But if you care less about the decision to watch and engage with the video than about driving a click through to your website, make the post more of a teaser to what they get when they click to the video.

By using the microdecision mindset to focus on users and your goals, marketers can achieve greater efficiency in their marketing efforts. The framework helps to instill creative decision-making discipline and offer better results.

5 Key Financial Education Trends in 3Q21

Numerous surveys continue to highlight financial literacy gaps among U.S. adults and children, illustrating the ongoing need for financial education programs (according to a Step survey, 97% of teens believe that financial literacy is important). Many financial firms and their partners have been at the forefront in developing and distributing innovative financial education programs. The following are noteworthy financial education trends in the 3rd quarter of 2021.

  1. Build engagement with younger segments through financial education programs and content. Firms are looking at a wide range of channels to reach younger demographics:
    • HSBC created a new world in Minecraft – Fintropolis – designed to improve financial literacy.
    • Bank of America launched a 7-part series on YouTube that aims to share financial know-how with both parents and students.
  2. Develop financial education partnerships with associations and advocacy groups.
    • OneMain Financial partnered with EverFi to launch the Money LaunchPad financial literacy program for students in grades 9 to 12.
    • BancorpSouth committed $1.5 million to Operation HOPE for financial literacy programs and announced six additional HOPE Inside locations.
  3. Target specific consumer segments with financial education programs and thought leadership tailored to their unique needs, including:
    • LGBTQ: Capital One published an article, “The Debt Free Guys: Financial Obstacles Facing LGBTQ+ People”, and Ally published an article on “Financial Considerations for LGBTQ+ Couples.”
    • Couples: Ally Bank launched a marketing campaign targeting couples’ fears over the “Money Talk”, and Morgan Stanley listed “6 Money Questions to Ask Your Partner Before You Commit.”
    • Widows and Widowers: MassMutual published “A financial checklist for widows and widowers.”
  4. Brand financial education programs to bring together various financial education initiatives as well as raise consumer awareness and engagement. Recent examples:
    • Charles Schwab launched MoneyWise America™ program for teens.
    • Regions introduced the Next Step podcast, the latest resources from the bank’s Next Step financial education program.
    • Capital One launched the Money & Life program, which builds on its former Money Coaching program.
  5. Position financial education as part of broader ESG and CSR initiatives. Financial education efforts are now more prominently featured in financial firms’ annual ESG and corporate social responsibility (CSR) reports.

Traditional Banks Prepare for the New Digital Reality by Expanding Digital Functionality

Banking customers’ growing preference for digital (online and mobile) channels – as well as the huge number of digital challengers looking to gain a share of the market (read our December 2020 blog on segmentation among new entrants) – has led established retail banks to ramp up their investment in digital channels.

Growing digital banking users continues to be a prerequisite in establishing strong customer engagement. The onset of the COVID-19 pandemic in early 2020 was the catalyst for many reluctant consumers to use digital (online and mobile) banking channels for the first time. Many of these have continued to use digital channels even through branch banking has returned.

The top three retail banks – Chase, Bank of America and Wells Fargo – all report steady growth in active digital users. Bank of America claimed that 70% of its Consumer Banking households now use its digital channels.

Many U.S. banks also publish metrics illustrating that customers are using digital channels to carry out an range of banking activities, such as:

  • Conducting banking transactions:
    • The digital channel accounted for 68% of Region Bank’s total customer transactions
    • Interactions using Bank of America’s Erica virtual financial assistant rose 153% y/y to 94.2 million
    • 18% of UMB Bank’s consumer deposits were made using its mobile app
  • Making person-to-person (P2P) transfers:
    • Regions reported a 75% y/y rise in Zelle transactions
  • Acquiring new products and services:
    • Truist reported that 44% of new checking accounts were opened digitally
    • The digital channel accounted for 65% of U.S. Bank’s total loan sales
    • Citizens Bank’s digital sales volume rose 61% y/y
    • Huntington Bank reported that the digital channel accounted for 12% of new business deposit account production (a significant change from 0% in 3Q20)
  • Scheduling appointments:
    • Bank of America booked 871,000 digital appointments, up 31% y/y, and reported that these appointments accounted for 31% of its total financial center traffic

Obviously, banks will want to continue to enhance their digital functionality to meet consumer needs and differentiate themselves from competitors. Here are a few tips for doing so effectively:

  • Identify the bank departments, product lines or customer segments where digital channels have significant scope for growth
  • Carry out regular assessments of customer behaviors, needs and perceptions to inform digital investments
  • Conduct ongoing competitive intelligence to understand what digital functionality is now common among many banks, distill best practices, and identify competitive gaps
  • Prepare ways to counter internal barriers (e.g., organizational inertia, legacy processes) to speedy development and rollout of new digital solutions
  • Ensure that new functionality enhances the customers’ digital experience
  • Develop closer integration between digital and human service and sales channels
  • Develop plans to leverage marketing and customer communications channels to promote new digital functionality