building customer relationships - juntos...figure 1: customer relationship building is the center...

Building Customer Relationships at Scale in Digital Financial Services

juntosglobal.com

juntosglobal.com

About Juntos

Juntos builds and fosters trusting relationships at scale between consumers and their financial institutions. With an automated messaging platform delivered through mobile channels, Jun-tos proactively engages consumers in conversation to develop trust and confidence in financial products. Messaging is crafted through human-centered design principles and refined with randomized control trials to construct dialogue that creates strong relationships, which drive higher account usage. Deployed in fifteen countries across four continents, Juntos helps finan-cial institutions around the world transform their relationships with their customers.

For more information about Juntos, visit our website: www.juntosglobal.com

Authors and Contributors

Katie Macc, JuntosKate Johnson, Juntos

Edit and Design by Jack Parker, Juntos

This white paper was made possible with funding from the Bill & Melinda Gates Foundation. It was created in partnership with AccessBank in Tanzania, a microfinance and savings bank pione-ering digital banking in the region, and Zoona in Zambia, a market leader with services including over-the-counter money transfer, microloans, and a digital wallet.

Contents

The Financial Industry’s Core Challenge .................................................4

Human-Centered Design & Randomized Control Trials............................7

Case Studies: Applying the Juntos Method to Build Relationships with Customers ..............................................................12

How RCTs were Implemented to Achieve Outcomes ..............................14

The Case for Investing in Customer Relationship Building ....................17

Conclusion ...........................................................................................20

Addressing the Financial Industry’s Core ChallengeImran1, a chicken farmer in rural Uganda, signed up for a transactional account with a bank as a prerequisite to applying for a loan and investing in his business. In the same year, his region experienced a severe drought and his father passed away, events that were very disruptive for him emotionally and financially. He lives far from the bank’s branches and has not heard from the bank since he opened his account and applied for the business loan. Imran deposited a small amount of savings in that account when he opened it, but he quickly became inactive.

Sabrina1, a mobile money user in the Philippines, signed up for an account to start saving. She sets aside money from her small earnings every week. However, Sabrina has been saving in a jar in her home instead of in her mobile money account because she is nervous about network outages and is uncertain she will have access to her money in case of an emergency.

These scenarios illustrate the current, core challenge facing the financial industry: while many customers do have a felt need for formal financial services, they do not have the trusting, positive relationships with their financial institutions that form the foundations of active account usage. As financial services have digitized, millions of customers – particularly low-income ones – have access to formal banking for the first time. Despite concerted efforts to digitize marketing, leverage big data, and provide adequate customer call centers, customer-brand relationships remain weak.

The industry’s relationship problems have observable symptoms with stark business consequences including mass account inactivity and thin usage among the minority of customers who actually are active. Globally, 64% of registered customers are 90-day inactive on mobile money accounts2. Across all types of digital financial accounts in low-income countries, 30% of customers are one-year inactive3. Dormant accounts can be incredibly costly to institutions to maintain, particularly when added to the expense of the promotional

1 Name is illustrative, and not the actual name of a real user2 GSMA 2017 State of the Union Report3 World Bank Findex 2017

Type a message

11:50

JUNTOS Details

JUNTOS: Tell us why you haven’t been able to use your account. Maybe we can help.

CUSTOMER: What if I needed money for

emergency funding? How can you assure I

can withdraw without difficulty?

experiments run to gain small, temporary spikes in activity. As a result, banks and mobile money operators have invested millions of dollars in marketing and developing products for low-income customers over the past decade, but have struggled to achieve sustainable profitability. Without strong, trust-based relationships at the center of the business, even well-developed marketing, customer service, and social media strategies will fail to yield fruitful results.

Furthermore, as a result of disengagement, consumers do not benefit from gaining true access to financial services (such as receiving interest on a savings account, building credit, etc.) and institutions are dis-incentivized from continuing to develop products for the low-income consumer segment. The industry must address this challenge quickly in order to sustainably achieve targets of profitability, growth, and – most pressingly – financial inclusion.

FIGURE 1: Customer Relationship Building is the center gear in a well-working customer engagement model. Having open, trusting lines of two-way communication aimed at building relationships digitally with customers ensures that all other gears spin effectively. Powerful customer relationship building will multiply returns on all other interactions and leads to active customers with long term loyalty and high lifetime value.

AI Customer Service Bot

Marketing Automation

Promotions

Social Media Listening

Social Media Content

Big Data

A/B Testing

Customer Relationship

Building

Juntos is tackling this problem by creating and fostering relationships at scale between customers and their financial institutions with an automated messaging platform. Juntos proactively engages both Imran, the rural Ugandan farmer, and Sabrina, the Filipino mobile money user, in two-way conversation. Messaging is developed through human-centered design practices to ensure warmth, empathy, and proper context, prompting customers to respond to the system over many months. White labeled as our partner financial institutions, Juntos builds trusting relationships, which in turn cause behavior change: Imran starts to set aside small savings and access his bank digitally in his remote area, and Sabrina begins to save on her mobile wallet with confidence. In another example, Juntos proactively engaged a six-month inactive customer of AccessBank in Tanzania in conversation, which gave her the confidence and key information she needed to use her account.

Core to Juntos’ ability to achieve these outcomes is the belief that consumer preferences, usage patterns, and insights should drive the creation of the products and services they receive, including communication. Juntos constantly tests, iterates, and re-tests messaging content based on how consumers respond, both directly via messaging and in their financial transaction behavior. In a typical deployment, Juntos may test more than one hundred varieties of messaging content, timing, language, tone, and frequency. The high quantity of tests and speed of iteration enable Juntos to adapt to consumer needs, a process that can be applied much more broadly across communication and products in financial services.

In 2017, the Bill and Melinda Gates Foundation funded pilot partnerships between Juntos and two financial institutions in order to do just that – apply Juntos’ mass iterative testing methodology to create long-term relationships with customers and drive usage. These pilots revealed the benefits end users can receive from building stronger digital relationships with their Financial Services Providers (FSPs). Equally important, the pilots also substantiated the business case for financial institution investment in long-term relationships with low-income customers.

ACCESS: Thank you for joining our interactive messaging service to get important information. Send ANSWER to ask us a question.

CUSTOMER: How do I access my account through my mobile phone?

April 17, 2017

ACCESS: Please visit a branch to register for mobile banking first. Then you can transfer, send, and check your balance from your phone.

Applying Human-Centered Design & Randomized Control Trials to Address the ChallengeJuntos develops and optimizes its automated messaging using two distinct product development methods: human-centered design and randomized control trials (RCTs). Human-centered design entails building deep empathy with the people you are designing for, generating many ideas and building multiple prototypes before sharing the solution with the users. Randomized control trials enrich that process by testing the application of the solution created for some customers against a control group of customers who have not received that solution. Over time, any divergence in performance between the test and control groups can be attributed solely to the impact of messaging.

“I used to think that saving just any amount cannot be ‘savings.’ Now I’ve realized

that 1 shilling eventually becomes 1 million shillings,

but if you spend 1 shilling then you don’t have 1

million anymore.”

- Juntos Interviewee, Tanzania

Juntos’ human-centered design begins with in-depth ethnographic research meant to uncover the driving factors of certain end user action or inaction. This user research is distinct from marketing research in that it is meant to attain a deep understanding of a small subset of customers for the purpose of inspiring product development. Marketing research typically yields shallow, broadly representative information that is used to drive sales. With human-centered design, learnings synthesized from ethnographic interviews inform the messaging conversations that are created to be tested in the randomized control trials.

Messaging conversation tests are run in RCTs in order to reduce bias in outcomes and enable true isolation of the impact of developing relationships with customers. In a single deployment, Juntos may test 100 messaging experiences on randomly assigned users, matching them to control group customers with similar pre-experiment activity who do not receive the messaging service. Over time, comparison to the control group allows Juntos to accurately determine the incremental change in behavior that is caused by Juntos interactions.

Primary goal to create a user-friendly product experience

Focuses on people’s behaviour and needs

Seeking broad opportunities

Inspirational in nature

Primary goal to incite people to buy/use a product

Focuses on what products people will buy/use

Seeking specific product feature feedback

Representative

User Research Marketing Research

Average # of Transactions of Actives

Before Juntos Intervention Juntos Ramp-Up Juntos Fully Scaled

Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

Negative impact?

Juntos Group

The prior figure highlights the importance of RCTs. A very common method of measuring the efficacy of customer interventions is to compare user performance to historical account usage prior to the intervention. With that approach, the business would determine that this example Juntos intervention actually had a negative impact on account usage. That decline, though, could be caused by natural seasonal trends, macroeconomic performance, or other outside factors. Without a baseline of comparison, it is impossible to know what the true impact of the intervention was, independent of other variables.

With a control group, the impact of the Juntos intervention over time becomes clear. In this example, test and control customers had similar performance prior to Juntos outreach. During ramp-up and the fully scaled deployment, the control group (which didn’t receive Juntos messaging) had a sharper decline in transactions than customers that received Juntos messaging. Thus, Juntos treatments drove a positive impact on transactions. Unlike basic historical comparisons or A/B testing, RCTs can isolate the true incremental impact of each outreach strategy on customer behavior.

RCTs also enable Juntos to learn and iterate rapidly based on customer reactions (via messaging responses and financial behavior), which is core to the human-centered design process. As the same content is tested on different types of customers, Juntos refines customer segmentations and the characteristics that define them. Different content is also tested on similar customer pools to determine which content is most effective. These learnings are then leveraged to create the next round of messaging experience RCTs in an ongoing product development process driven by consumer preference.

Average # of Transactions of Actives

Before Juntos Intervention Juntos Ramp-Up Juntos Fully Scaled

Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

Control Group

Difference: Incremental

Impact Driven by Juntos

Juntos Group }

It is best to drive product iteration with both quantitative and qualitative data. Juntos leverages financial transaction data coupled with qualitative learnings from our digital conversations with users to develop and revise content for new RCTs. For example, messaging conversations with Zoona customers uncovered a deeper understanding of the obstacles to success for the savings product. Those insights were shared with Zoona and then used to develop content to help customers overcome the obstacles.

Consistent analysis of RCT results can reveal surprising use cases and illuminate product opportunities that institutions did not anticipate. Juntos learns about these opportunities through engagement with customers and leverages those learnings to change engagement with the product, even if the core product features remains the same. Juntos’ experience in twelve countries operating RCTs as a critical component of the human-centered design process has led to the development of best practices for running RCTs in the financial services industry, illustrated on the following page.

Example User Responses

USER: Can you send money from Sunga account to another person

without involving an agent?

USER: Why don’t you allow for someone else to deposit money?

What are the main reasons?

Juntos’ global experience using RCTs to optimize content and create relationships with customers demonstrates the opportunity that exists for financial institutions. Rigorous discovery and testing could be leveraged more broadly to develop products and communications for newly banked and underbanked users. This white paper outlines Juntos’ best practices of applying RCTs as a part of the human-centered design process through the case studies of two deployments funded by the Bill and Melinda Gates Foundation.

The Juntos RCT Process

1. INITIAL DATA ANALYSISAnalysis of data to determine significant segments

3. DESIGN RCTS

4. EXECUTE RCTS

5. ANALYZE RESULTS

2. SEGMENTS

Segment for messaging experience tests

Review test vs. control performance to identify best performing experiences and

segments, and apply learnings to refine segments and RCT design

Match similar user pairs and randomly assign test and control customers

Juntos group receives messaging content, control does not

Two Case Studies: Applying the Juntos Method to Build Relationships with CustomersProject Outcomes

Juntos partnered with two very different FSPs in Africa in order to demonstrate: 1) how human-centered design and randomized control trials can foster the development of digital relationships with customers, and 2) why developing long-term relationships with end users is worth the investment for financial institutions. Those two partners were AccessBank in Tanzania, a pioneer in digital banking that focuses on small and medium-sized enterprise financing, and Zoona in Zambia, a market leader with services including over-the-counter money transfer, microloans, and a digital wallet.

Applying the Juntos methodologies to develop relationships at scale with the institutions’ customers yielded the following results:

8% uplift vs. control


6-9% uplift vs. control


Transaction volume across activity segments

(Over 6 Months)

Transaction volume of responding consumers

(Over 6 Months)

Overall Balances (Current + Savings Accounts, Monthly)

Average Current Account Balances

(Monthly)

These results are similar to the impact Juntos has had with partners in other deployments focused on a range of customer financial behavior metrics. The outcomes exemplified in these portfolio results and in day-to-day customer interactions were driven by the development of warm, digital relationships between the financial institution partners and their customers.

For example, an AccessBank customer engaged with Juntos responded via SMS:

A user from Zambia also expressed appreciation for the messages after receiving savings reminders:

13:18

Thank you for this account and your information. I will save for the benefit of my future. I love AccessBank.

15:07

Please you are really inspiring me, I need more and more, need more messages please.

How RCTs were Implemented to Achieve OutcomesThe substantial impact on savings and money transfer volume was achieved through the implementation of human-centered design and randomized control trials adapted specifically for each partner’s context.

For AccessBank, Juntos focused on building relationships with customers to increase their account balances and to educate customers about the new mobile banking product. Juntos communicated with approximately 140,000 AccessBank customers, ranging from small business owners in Dar es Salaam to farmers in rural areas who, due to a severe drought season, were struggling financially.

Partnered with Zoona, Juntos also deployed the interactive messaging service to 180,000 customers located across Zambia. This deployment was focused on creating relationships to increase over-the-counter money transfers and introduce Zoona customers to new product offerings: the Sunga savings product and Boost, a micro-loan product.

In both partnerships, the high iterative testing period lasted approximately four months, during which Juntos sent one hundred and twenty-five different message tests to optimize content and experience before scaling the service for six months. Examples of early iterative test elements are shown on the following page.

USER: My business is selling groceries.

USER: I am a farmer. USER: I sell spices. USER: I don’t have any business right now but am hoping you can help me to start a business.

AccessBank Deployment Example Tests

Messaging Element Test 1 Test 18 Test 24 Test 47 Test 60

Content Topic Planting Planning for

Farmers

Saving for Small Business

Expenses

Registering for Mobile Banking

Trust in Agents and Banking Institutions

Establishing Savings

Habits at the Completion of a Loan

Frequency of Messaging

Weekly Twice Weekly Twice Weekly Weekly Once Weekly

Language Swahili Swahili High Literacy, Average

Literacy, Low Literacy

Swahili High Literacy, Average

Literacy, Low Literacy

Swahili Swahili

Zoona Deployment Example Tests

Messaging Element Test 3 Test 12 Test 28 Test 45 Test 52

Content Topic Education Family Finances Location Services

Agent Ratings and Business

Coaching

Savings Reminders

Frequency of Messaging

Sporadic Twice Weekly Once Weekly Twice Weekly Once Weekly

Language Language Option: English

/ Bemba / Nyanja

English English English and Lozi

English and Lozi

Messaging test plans were then transformed into multi-month messaging experiences, which included messaging excerpts such as:

Juntos deployed these messaging experiences to test groups that were representative of the larger customer pool, and selected control customers that had highly similar prior transaction behavior to exclude from outreach. The monthly average savings for AccessBank illustrate the importance of a control group in contextualizing results of relationship-building over time:

Apr

Apr

May

May

Jun

Jun

Jul

Jul

Aug

Aug

Sep

Sep

The Juntos group maintained relatively steady balances with

minimum variability.

The control group of otherwise-identical customers dropped dramatically over the period. Juntos, therefore, was very

effective at causing customers to maintain higher balances

versus the control group.

60,000

60,000

65,000

65,000

70,000

70,000

75,000

75,000

80,000

80,000

85,000

AccessBank Average BalancesJuntos Treatment Group

AccessBank Average BalancesControl Group vs. Juntos Treatment Group

Average Balances

(Shillings)

Average Balances

(Shillings)

Control Group

Juntos Group

Juntos Group

9:58

ZOONA: We want to help you be more secure in 5 years than you are today. Our free guide to financial planning can help. Send 1 to start.

13:15

ZOONA: A Sunga will help you fulfill your commitment to have more money. It is more difficult to spend the money right away in your Sunga, so you keep more.

11:44

ZOONA: There is no fee to add and no maximum on how much you can add! Get started in five minutes. Open at any Zoona with your NRC.

The Case for Investing in Customer Relationship BuildingThe financial industry has made great strides in increasing access to its products for unbanked, rural, and low-income customers. The next step has to be creating deeper relationships with these millions of marginalized customers in order to foster meaningful usage of the services. The projects outlined previously demonstrated how user-centered design and RCTs can combine to create those deeper relationships by delivering more effective communication and product relevancy for customers at scale. It’s important to evaluate the business viability when considering sophisticated interventions like Juntos. Do the financial benefits and new customer insights justify the investment?

Standard practice, particularly in mobile money, is to measure the efficacy of promotions or one-time communication campaigns against historical transaction data. This means that outcomes are impacted by cyclical transaction behavior (commonly holiday, agricultural cycle, or income payment related). As a result, business decisions are potentially being made based on inaccurate measurements. By contrast, RCTs isolate the incremental impact of interventions.

Consequently, the business case for certain interventions becomes clear, as outlined in the following example business case for Juntos, which was determined by the application of RCTs.

Example Business Case for Juntos Deployment

Each Juntos engagement focuses on building trust-based relationships to drive high-priority KPIs for its partners. Generally, these success metrics fall into two categories: conversational insights and transactional KPIs. This example business case, built in collaboration with a partner financial institution, details the clear benefits an FSP can receive from a Juntos deployment.

1.2MM

$600K+

This example partner FSP was focused on driving customer feedback KPIs to inform product design and customer experience across channels. Conversational insights are critical to the Juntos business case. Here, the Juntos deployment would generate 1.2MM inbound customer responses. Traditional digital marketing channels typically charge at least $0.50 per click generated, and clicks alone rarely carry direct customer feedback. Under conservative assumptions that value each response to be worth $0.50 to the financial institution, Juntos could drive $600K in value from conversational engagement alone. This breadth of feedback allows a powerful voice of the customer to emerge, providing invaluable perspective into consumer expectations, challenges, and preferences. If harnessed effectively, these conversational insights could help inform product features, mobile app functionality, and more.

Value from Customer Responses $600,000

Incremental Revenue from Lift to Transactions $390,000

Cost Savings from Channel Migration $330,000

Total Engagement Value $1.3MM+

Conversational Insight KPIs

Providing Direct Insight Into:

• Consumer experiences with mobile app

• Branch / ATM feedback

• Product features

• Common barries to account usage

• Effective messaging strategies

customer responses,

generating in value

Total Value Potential from Juntos Engagement

Transactional KPIs

Transactions - Across 6 Month Engagement

Transactions/Customer 30

Juntos-Driven Lift 10%

Incremental Transactions/Customer 3.0

Revenue / Transaction $0.13

Number of Customers 1,000,000

Juntos-Driven Incremental Revenue $390,000

Channel Migration - Across 6 Month Engagement

Non-Digital Channel Servicing Cost/Customer* $3.26

Juntos-Driven Lift from Channel Migration 10%

Cost Savings/Customer $0.33

Number of Customers 1,000,000

Juntos-Driven Cost Savings $330,000

* Includes Branch, Call Center, and Physical Mail

The example FSP partner was focused on driving transactions and migrating customers to mobile and online channels to save costs. Juntos conversations are designed to build consumer trust and encourage behavior that aligns with its partner’s goals. RCTs enable Juntos to isolate the true incremental impact of interventions on financial metrics; by driving a 10% lift in transactions and mobile account usage, Juntos could deliver over $700,000 in profit improvement to the FSP in just six months. Combined with the conversational insights benefits, the business case for a Juntos deployment is clear.

ConclusionA thriving mass market financial services industry in the future will have strong digital customer relationships at the center. The value of those relationships to financial institutions will be evident in customer loyalty, usage, and lifetime value. Customers will begin to see their FSPs as partners in life, decisions, and planning. When customer relationships sit at the center of a strategy, all other customer interactions benefit – making marketing, social media and customer support more efficient and profitable.

RCTs have enabled Juntos to create better, mutually beneficial relationships between consumers and financial institutions. Imran, the farmer in Uganda, received messaging content that was the outcome of iteration after many RCTs. His message about his experience with the Juntos content speaks to the value of investing in building relationships with customers:

The financial services industry has made great strides in increasing access for low-income consumers. The next step to make that access profitable for institutions and impactful for users is to build trusting relationships with those end users. RCTs, implemented as a part of the human-centered design process, can enable institutions to develop those relationships and achieve meaningful financial inclusion at scale.

8:35

Thanks for the friendship you have continued to show me. Ever since I joined your service, I can now afford a smile on my face. I did not know that there could be a [financial service] that would help a low income earner like me.

juntosglobal.com

building customer relationships - juntos...figure 1: customer relationship building is the center...

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