Customer Experience: Hyperpersonalization – Data Personalization, Personalizing the Customer Journey

Lincoln Parks, Innovation Officer, Heritage Southeast Bank; Christina Riechers, Head of Product, Square Banking;

Transcription:

Miriam Cross: (00:07)

Hi, welcome to the customer's experience. Track our topic today is data personalization in personalizing the customer journey. Today, I'm gonna be speaking with Christina Riechers, the head of product at Square Banking and Lincoln Parks, the innovation officer at Heritage Southeast Bank.

Christina Riechers: (00:42)

Sorry, I chose wrong ones. No worries.

Miriam Cross: (00:43)

Thank you both so much for joining me.

Christina Riechers: (00:46)

Thanks for having us.

Miriam Cross: (00:47)

So I just introduced you by name and title, but can you, um, introduce yourselves, just talk a little bit about, um, what your role is at your respective institution and, um, and what kind of clients you serve. Uh, so Christina, I'll start with you. Sure.

Christina Riechers: (01:02)

Hi everyone. My name's Christina Riechers. I'm the Head of Product at Square Banking at square serve small business owners. So we'll serve millions of small business owners in the us alone and we're, in other countries internationally. And when you think about square story, we started about 13 years ago, focusing on how to help a small business owner, never miss a sale. So really starting with that, the payments at the heart of it, because beforehand you had to sign up for hardware, hope to get accepted and then start paying monthly fees and having heavy fixed contracts. So especially for people who were just starting out, that didn't work so well. And so square started by giving away free hardware and only charging variable transaction costs. So that was 13 years ago. And over the last five to 10 years, we've really been building off of that.

Christina Riechers: (01:51)

So saying, all right, we understand the pain point seller had around taking payments. What are some of these other adjacent areas that they have challenges with? And we've seen that there's a lot of things. And at the end of the day, these small business owners, they wear so many different hats. And so we found the more tools that we can help serve them with and really make sure those tools work together the better. And so that means things like offering payroll, helping with their inventory and the area of the business that I spend time on their business banking as well.

Lincoln Parks: (02:27)

All right, well guys, Lincoln Parks, I am the Innovation and Strategy Officer for Heritage Southeast Bank. We are on the in Atlanta, Georgia, just south of Atlanta. We have three different locations. We have our north location that's in Alpharetta. Then we have our south location that we have about seven branches. That's maybe 30 miles outside of Atlanta. And then up the coast from Jacksonville, we have about 16 branches there. I manage all of the innovation projects for the bank and really speaking from a community bank standpoint and looking at where some of the banks are today. We don't have all of the resources that a lot of the other banks have. So we have to be really creative where we're just now figuring out a lot of things around FinTech and where we want to go. So it's my role to really just look and see what's out there and then provide the resources depending on where the bank wants to go for us. So that's what I do.

Miriam Cross: (03:32)

Thank you. I feel like I've had a lot of conversations with banks in the last couple years about personalization, but it's also a very broad term. So how would you each define it in the context of what you do for your financial institution? How about you Lincoln? Yeah,

Lincoln Parks: (03:47)

I'd say for us when it comes to personalization we've been doing this all along. I mean a lot of people, a lot of you guys have been doing it all along when I initially started at the bank, I was in charge of marketing for the bank for an entire footprint. And really when you talk about personalization, it's all segmentation, right? So you're putting people in the buckets where they want, where they want to hear from when I initially, when I first came, really, they were sending out newsletters that were going out to everybody, right. And we were getting unsubscribed left and right. So we decided, look, we're just gonna, we're just gonna start personalizing each one of these experiences, if people are on our website and they're looking for a mortgage or they're on our website, and they're looking for to open an account, depending on what type of account they're looking for.

Lincoln Parks: (04:36)

If they're looking for a wealth management project product, now we put them in those specific buckets so that we can cater to them and build that relationship throughout a personalized experience. And we have a customer journey, a worksheet that we saw to work off and this, we call it our blueprint. And this blueprint allows us to talk to customers from awareness all the way through the customer journey to them being an advocate of the bank. So for each one of those touchpoints, we have specialized ways in how we interact with customers

Miriam Cross: (05:10)

And then like square, you have branches. So does the personalization strategy extend to your branches as well?

Lincoln Parks: (05:15)

Absolutely. Yeah. So for and each of our areas are really different. We are in some segments more, a small commercial bank but on the coast line is more a consumer. So we have to, for each one of those areas where we're personalizing the experience, we okay. On the coast, these consumers are looking more for mortgages. They're looking more for the car loans. And so, that's how we we're able to segment based on where they are.

Miriam Cross: (05:46)

Okay. And how about you, Christina? How do you think about personalization at square?

Christina Riechers: (05:50)

Yeah, I think not dissimilar from Lincoln the personalization is a spectrum, right? So if you think about it in lending at one end of the spectrum would be you offer one loan size terms to every customer. Of course, no. Nobody does that. On the other end of the spectrum is you have a full picture of that customer, that small businesses needs, how they operate their repayment ability, and you offer them the exact right loan size and terms to match the risk profile that you're doing. I'd say we're somewhere in the middle like so many and trying to get closer to their precise needs. And so I think for us at square personalization really means how do you center both your products and your marketing on the needs of a, of a customer and trying to understand those sellers and their situations as well as possible in order to offer them that right product.

Miriam Cross: (06:52)

And Lincoln, you mentioned the blueprint, that's what you call your personalization system. Yeah. And is that the one you described to me before is old school?

Lincoln Parks: (06:59)

Yes. How so? Yeah, so I took some notes cause I know I'm gonna need notes and I wanted to make sure I shared this with each and everyone here. So, our journey worksheet starts with awareness. Like I said, how are customers finding us? Where are they coming from? What are, where are they doing? Then we move into the engagement stage how they're interacting with us. If there's something on our website, a white paper or what are we using from that point? Do they download that? Then the next point is to subscribe. They subscribe to one of our social media platforms. If they are again, interacting with us in a way where we can now convert them. And then from that stage, we move, we have to make sure that that next stage is the excitement stage.

Lincoln Parks: (07:48)

We call it the aha stage where something needs to happen. That's gonna be an aha moment, right. So what we typically do at that point is we may send our personalized written letter and this might be through our onboarding process. And then after that, we have there, this is where we break them into the segments with their personalized journeys and depending on what product that they're looking for, then from that point, we ask them for a review upsell 'em on different products. And then after we've already created that relationship with them, and this happens over the course of a year, this, it's not like it just happens immediately, but over the course of a year we're nurturing that relationship. And then takes them to the advocate stage where now they become raving fans of the bank.

Miriam Cross: (08:38)

And what does this look like on your end? Is it a bunch of spreadsheets? Is it,

Lincoln Parks: (08:42)

Yeah, we started out it was a spreadsheet. And in that spreadsheet like I said, we had each one of these areas and we wanted to find out, okay, how are we going to market to each one of these customers, depending on where they are in that journey. So, we just, we took that spreadsheet and turned that in, used that with our CRM product. So we started off with the spreadsheet, but then we ended up with using that in our CRM,

Miriam Cross: (09:12)

Christina, how does square market to different customers? You said you wanna get them to the exact

Christina Riechers: (09:16)

Right product. Yeah, I think the, the intent is really similar to what Lincoln describes and the process is, is a bit different. And so for us, it's a lot of our product marketing, our data science team are driving a lot of this. So throughout this stock, you'll hear me some talking about marketing, some talking about personalizations, it pertains to product. So this let's talk about the marketing piece for a minute. What they're really trying to do is first build an ideal customer profile. And there's two kind of categories that I think we put into that. So one are attributes. You can kind of think of these as firmographics of a processing volume of a seller. What industry are they in? Are they health and beauty or a restaurant, things like that. Then there's a second category which are behavioral. So do they have trends in the time of day or days of the week that they're taking payments?

Christina Riechers: (10:09)

Did they engage with a certain part of the app or part of our website that gives us clues to what they're trying to do? So all of that then gets fed into some of the machine learning models that we have and off of those, and we're building a model that helps us understand the propensity to convert based on that mix of attributes and then the behavior that they have. So that's kind of part one, you're developing your ideal customer profile for each product based on shared data that we have across square, then the second point is, okay, now, how do you actually use that information to identify when they might have a need for the product that's relevant? Right? So it's like getting them at the right time and using that information. So then you're really leaning heavily on some of the behavioral triggers.

Christina Riechers: (11:01)

So I I'll give you a concrete example of how we might do this. So again, we call them sellers. These are our small business owners who use square. Let's say that they are selling products and they want to attach sales tax to certain products that are sold. Right. Okay. Add 8% XYZ state tax to these items when they're sold. Well, we can take that data and maybe we know our ideal customer profile for square savings is somebody who uses sales tax a lot. And why might that be? We have a product called square savings, which allows sellers to take a percentage of their sales and automatically have that sent to different sale savings folders. So maybe you just have one, you say, I just want 5% of all of my sales to go into this general savings folder, or maybe you have four and you have 3% for your vacation fund, cuz you're a sole proprietor.

Christina Riechers: (11:57)

And you're trying to put some funds aside. You got 10% in a tax bucket because quarterly, you're gonna have to pay taxes and you don't wanna have spent all of that money when it comes time to actually pay. So for us, if we see a seller has just set up sales tax that could be a good indicator that they actually are quite primed to set up a savings folder. And so if that information is all, so we'll use that information then to trigger an email that says, Hey, saw you set up sales. We're not gonna say it exactly like this, but because they set up sales taxes, do you know that square also offers square savings? And you can put a percentage of those funds aside, for example, kind of a folder that you call taxes so that you have those funds available when it's ready. So those are the types of things that we're looking to do, and it's all kinda machine learning model based in and automated messaging, be it through email or in app notifications to the sellers.

Miriam Cross: (13:01)

And how long did it take you to develop that system?

Christina Riechers: (13:03)

Oh gosh. This has been a stop start work in progress for years. Yeah, I know you're gonna kind of ask us, like, what's hard, I'd say this is really hard. Square has a lot of data scientists and very technically inclined to folks and it's been hard. I think the thing that's made it particularly challenging has been square has a strong culture of decentralization. So, I'm working on square banking. And so for my team, they're really thinking about these small business owners through the lens of what their cash flow problems are, what products, we might offer them, how we can test those out. What's great about that is it leads to really fast iterative product development and testing of things. But what it, so everyone's kind of running a little bit on their own. And so how do you provide the cohesion needed though, if you actually want to take advantage of shared data? And I think that's where it gets a little tricky of making sure folks are feeding the right data back into our customer data platform and tagging it, like literally categorizing the data in a way that a team unfamiliar with what that other team's really doing can make use of. So it's, it's been a challenge. I think this is a, but I think we're, we're finally getting there. I'd say,

Miriam Cross: (14:24)

Do you have a name for it? Like blueprint the way Lincoln does at heritage?

Christina Riechers: (14:28)

They call it customer data platform. I don't think that's CDP is the internal name. So, it's not as clever, I think maybe we should brand our internal tool a little better.

Miriam Cross: (14:39)

Another thing I was wondering about, which you just brought up was it seems like a lot of work and very difficult to take all these disparate data sets, find some way to organize them and crunch them and translate them into actual insights. And I guess, especially in your case, like if you want the bankers and the branch to figure out ways to like serve customers needs as well. So you talked a bit about it. Is there anything else like how have you overcome these challenges of kind of getting all this data and putting it in some sort of organized, cohesive fashion?

Christina Riechers: (15:10)

I think starting by showing teams the value that can come from when they, when they do do it, so start small, right. Start with some small areas that teams see the value and a little bit of mandating. I think that also happened. So there was some incentive set in place of here's the value you get when you put the information in these different areas or even just how you can scale across different products. I think that's, it took a combination of those two things.

Miriam Cross: (15:38)

And Lincoln. So Christina just was also saying how Square's a little sort of decentralized. What, how would you compare that to heritage?

Lincoln Parks: (15:45)

Yeah, so we have data all over the place. And that's been one of the challenges for us is to find a way to bring all that data together. So, through our CRM is one way that we've been able to do that. And, this is where we're able to, now we can determine, okay, if our customers have a important life event something happened in their life or there may be a marketing campaign that we run. And depending on the clicks on that campaign, or if an email was open how we can do that. But our data right now is something that we're, that's the project that we're currently working on, where we can pull all the data in from a community bank standpoint. And we're on a core with our core provider. We're kind of handcuffed in some areas. So we're having to look outside to see, okay, where can we go look at different data providers as a project that I have on the table right now to really look and see where we can centralize and house all of the data that's siloed. Yeah.

Miriam Cross: (16:53)

And how long has have your personalization efforts been in the works.

Lincoln Parks: (16:57)

Well, ever since I've been at the bank and that's about eight years. Okay, before I was there was no personalization that was happening anywhere. I think I spoke about before our digital account opening project. And that was something that we built in house again from a community bank perspective we don't have the budgets. It was a community, it was a department of one that was you. And that was me where our CEO was one of the questions that he always asked is Lincoln, how do we compete? How, are we able to compete? And one of those ways was through our personalization efforts. And, as I mentioned, when I came to the bank, it was one of the things that I wanted to do immediately on our website it was all static.

Lincoln Parks: (17:47)

There was no dynamic aspect to the website we wanted to make sure, okay, if a customer fills out a form, what happens next? Where do they go from here? If a customer clicks here, what do they do? What's the next step? If they fill out a mortgage, how is that now? Do they go in that specific bucket and what happens after that? So these are things that we have to implement over time. It's been a challenge. It's been just having to reach out and figure out, come to conferences like this, talk to folks and discover, okay, what's the best option for our bank. I don't want everybody to think that you hear all the buzz words, you hear hyperpersonalization, you hear, putting your data and data warehouses, but there are some community banks and there are a lot of people right now, that I've talked to at other banks, some of my peers that they're just embarking on this and they're just getting started. So a lot of us are behind the eight ball, so to speak, but we're moving forward to really catch up in that area.

Miriam Cross: (18:50)

And you were saying just now that you see personalization as one way, you can compete, especially on like constraint within constraints. Do you look to other banks for inspiration about what they're doing? And if so, is it like community banks your size, or is it larger institutions?

Lincoln Parks: (19:04)

Absolutely. So I have relationships in all sectors from the large banks, large to community banks and mid-size banks, all the banks that are in our geographical area. We have a peer group that we meet regularly. And we just talk about what what's happening. I'm a part of FinTech, Atlanta, a part of the ATDC with Georgia tech. And those are areas that I go to really just sit down with some of the other bankers that are there and some of the fintechs and put my problems on the table and just try to figure out, what's the best solution for our bank because not every solution is good for a bank, our size our bank is about 1.3 billion in assets and continuing to grow. And we just want to figure out the best world forward.

Miriam Cross: (19:50)

And on your end, Christina, have you looked to other financial institutions for inspiration about what they do and if so, what types?

Christina Riechers: (19:58)

Yeah, we are a little bit, but I would say we probably do less than others because the way we've ended up focusing is just is on the seller. So we take a pretty strong product focus. And so what that means to me, is taking our teams out to meet our sellers sitting with them in their business, trying to look over their shoulders when they can, which is, I think, tricky when it comes to their financials. Like those people don't want you looking at their QuickBooks or their bank statements. But doing that to the extent possible and using that to understand where the opportunities are, where are they spending hours at night? Where are the things that weren't top of mind for you, but are actually like the little things that great on them and that cause a lot of pain. And so we end up spending much more and more time focused there then kind of looking at the competition or other institutions. Yeah.

Miriam Cross: (20:52)

And so what's your approach to building this in house, turning to a vendor or a combination of both? Like what have you done at square?

Christina Riechers: (21:01)

Yeah. Square ends up doing more in-house in general. And one of the key reasons here is because one area that we think we conserve small business owners better is that cohesion across tools. And it's really hard to have cohesion when you have disparate kind of underlying platforms. And so I guess an example of something we've done in house, I would say is square loans. So square loans, we do, we're using then machine learning to run daily underwriting models looking at a seller's processing. So just looking at your sales, seeing how you're doing, seeing what the trends are, and running models to determine your eligibility for a loan. And the way we do repayment is repayment is then also fully done through your sales. So, let's say you and I guess maybe I'll make concrete.

Christina Riechers: (21:59)

So, Bob's bagels has been processing for months. We are doing daily sort of model refreshes to understand sales across all of our sellers. And when Bob hits a certain threshold, we'll say, okay, Bob's eligible for a $10,000 loan. Maybe it's $5,000. Our average loan size is 7,000 just to give a sense of the scale of this. They're quite small by industry standards. So maybe one day Bob gets a loan offer of $10,000. We proactively then surface that to Bob say, Hey, Bob's bagels is eligible for a $10,000 loan. If you're interested, kind of come here to the offer page, he'll click in and then have the opportunity to kind of customize that further. So saying, okay, all right. The terms here are a $10,000 loan with repayment as 12% of my sales until it's paid off.

Christina Riechers: (22:57)

Actually I need something more like $6,000. Let me kind of toggle that down to 6,000 and that'll have a eight or 9% hold rate afterwards clicks accept. And then we send those funds to his bank account or immediately into a square checking account if he has those. So I think that's one thing that we've built entirely in house and we've done. So because we wanted those really, we wanted to be able to run, use all our internal data, build all our own models. And then one thing that's at the heart of what score does is moving money. So it's pretty easy for us to do all that money movement. So that's an example of something we've done in house. An example of where we've partnered has been on square checking, we partner with Sutton bank.

Christina Riechers: (23:42)

And so if you look at the square debit card on the back, it'll say issued by Sutton bank. And so square plays the role of for most of our sellers, they think about square as being their banking partner. If they have an issue, they call square customer support, they do everything on our app, all of our branding, we're doing the risk controls and such. But on the kind of back end is Sutton bank. And so that's really been a nice benefit to square to be able to get going faster. And I think it's only works when you're able to do that without degrading the customer experience because of maybe added complexities or different requirements with you and the partner.

Lincoln Parks: (24:22)

Just the piggyback off of that real quick from our perspective in that vibe versus build kind of area we've built stuff in house. And, I know that we've done that from, I said the digital account opening process to our PPP lending that we have to get up in about 48 hours. And we did that in house. And we learned from that we, the main thing was our customer experience. We wanted that customer experience to be great. So on the front end for our customers, it was seamless, but on the back end, we still had a lot of manual processes that we had to do on the back end. So what we're learning from those experiences and moving on, and again, we, like I said, I didn't have a 10 million budget. It was just Lincoln, get this done, figure out how to get this done.

Lincoln Parks: (25:12)

So just using tools that were in-house to be able to do that, like something like the Smartsheet or something like that, where we can program and sort of build that backend into it. So right now, since we've learned a lot from where we were now, we want to engage those FinTech partnerships that can layer on top of our core, where it has an open API approach that we can layer those things on now. So from a lending perspective to an account opening business account, opening perspective, we're able to now take advantage of a lot of those opportunities that we see.

Miriam Cross: (25:49)

And is that something you're doing in the realm of personalization as well? Absolutely.

Lincoln Parks: (25:52)

Yeah, that is by far one of the biggest projects right now that we're doing is right now, the product that we had in house for our digital account opening that we built customers are going through that, at about 10 50 in minutes, it's still too long right now. So, we're bringing on a partner. That's gonna help us to get that down to about five minutes and make that experience that much better for our customers which I want to personally see. I want that experience to be where our customers can get through that. Some customers for us, they're still coming into the bank. We have some folks that they want to come into the bank and we want to do that. We want to continue to offer that with our universal bankers and our ITMs. But at the same time we want options. So we want those customers that want to be able to open an account in five minutes, get that funded and they're on their way. And using online banking, we want to give them those options to be able to do that.

Miriam Cross: (26:51)

And you mentioned Smartsheets before, as one of the products you use, are you able to name any other products you've pieced together?

Lincoln Parks: (26:57)

Yeah, so really it's been a lot of custom programming PHP. We have Smartsheets that we've used on the back. We've used Zapier to automate processes, because again, we don't have like a developer to develop in house. So these are things that we have to do on our own. So those are some of the tools that we just sort of piece together, out from a community bank standpoint. Sometimes you just have to roll your sleeves up and jump in there and get it done again, the thing is customer experience. Our customers didn't know that on the back end, this is what, how we had to make this happen. So it's all been a journey for us. It's been exciting for us to be able to now partner with a lot of FinTech companies that are coming along to make it a little bit more easier for us.

Miriam Cross: (27:42)

And we have a couple minutes left. So final question. So you both described how, if I understand correctly, you're sort of like midway through the journeys, but there's still places you wanna go. But so far right now with personalization, what results have you seen, like more loyal customers? Have you been able to retain customers, attract customers, link it on your end?

Lincoln Parks: (28:01)

Yeah. For us, it's been just implementing just all of the personalization pieces that we have on through our website. We've seen, and this was during COVID, which really drove all of this because our customers weren't coming into the bank we definitely see an increase in account opens. We've seen an increase through our PPP process. There are other relationships, of course, one person doesn't have one relationship with one bank. They have relationships with many banks. But we were able to pull some of those in, because now we were able to focus on them specifically and some of the products that they were looking for. And we've seen an increase there as well.

Miriam Cross: (28:40)

Cool. How about you, Christina? Yeah,

Christina Riechers: (28:42)

I think it's around stickier customers. So, the more you can give them control and even allow them to further personalize their experience, the more people identify with it and feel heard. So for example, the square debit card that you get on when you're going through signing up for checking, we allow you to sign your name on it, right? It's like you sign your name, you can add emojis if you want. And so the front of your card all of a sudden now has your name, your business name on it. And we find, especially with some of the smaller ones they feel a lot of pride in that. All of a sudden they're like, wow, like I've done this. I actually have a business. This is mine. And so when they're out buying supplies and handing over their card with their name and their business name over it they feel more seen for the identity they've taken on here as a small business owner.

Christina Riechers: (29:31)

And the more ways we can allow people to feel like we understand them in some sense the better and we'll always have challenges. Like, I think one of the things that Lincoln does that we can't offer is this in person experience is the community connections element. Right? And so, places like square are always going to struggle with that. And how do we find more ways to allow people to feel seen and heard? And like we understand their needs is constantly what we're gonna be striving for. Thank you both so much. This has been great. Thanks for having us. All right.