At a recent cocktail party I had the opportunity to talk with a community banker about his company’s strategic focus and the fact that despite a well thought out plan, the company wasn’t seeing any significant improvement in results. During the course of our conversation, here is what I heard:
- “We don’t have the scale to compete on price; hence our plan is to compete on value.” “Everyone has the same products, and even if we offer something new and creative it can be rapidly duplicated by our competition.”
- “Because our products are not really different from those of our competitors, we chose to focus our strategy in training and empowering our employees around customer advocacy and experience.”
- “While our efforts seem to be recognized by our customers (our Net Promoter scores are on par with Apple and Amazon), our number of services per household isn’t growing. The end result is that the bank is treading water despite its best efforts to use customer advocacy and experience as a point of competitive advantage.”
We may focus upon mobile banking and customer engagement today, but soon we will focus upon augmented servicing that is proactive and predictive to encourage advocacy.
This is due to debits and credits taking place around us, behind the scenery, and therefore the need for informed service will be more critical than ever before.
Picture this scene in the near future: Chris is taking a journey into the city. He walks past the ticket office at the subway station, and says “travelcard”. The options appears in his eyewear and Chris chooses option 2 for all zones off-peak by saying “option two”.
If you don’t know who Joe Pine is, shame on you. He wrote two of the best management books ever published, Mass Customization and The Experience Economy.
Along with my praise, however, comes a little critique.
He recently published a white paper titled Beyond Products and Services in Banking, in which he writes:
“No industry has more commoditized itself over the past three decades than banking. Banks pushed people out of branches to use automatic teller machines in order to reduce personnel costs. They pushed them out of branches – the one physical space where they could actually control the experience provided to customers – to use telephone response systems, again in a bid to save money. They pushed them out of branches and onto the Internet to further reduce transaction costs. That’s no way to create a lasting relationship.”
We kicked off our customer experience interviews with the insights that real-time analytics and human relationships will drive the future of customer experience.
Now we’ll get the industry perspective from Rakesh Shetty, Head of Marketing for SAP Services Industries including Banking, Insurance, Telecommunications, Media and more.
How do you define a customer-focused company these days?
Customer-focused companies continue to deliver value to their clients enabled by innovative products and services that simplify their clients’ lives and day to day operations. This applies to clients across the spectrum covering individuals, households, small businesses and corporations. Customer-focused companies as a result of this strategy continue to raise their revenues sustainably, manage their costs and grow profitably in compliance with the regulatory Framework.
The need for banks to understand their customers better is often discussed – but what happens when customers don’t understand their bank?
The talk of the 360-degree view of the customer should not obscure the fact that customers need to understand banks – and banks have to help them.
When we talk about the future of banking, we often focus on the customer. Phrases like “the 360-degree view of the customer” or “holistic understanding of the customer” occur and recur. Understanding the customer is hugely important, but is only part of the equation. Banks need to understand customers, but customers also need to understand the bank.
According to a 2013 survey of retail banks by Bloomberg Businessweek Research Services (BBRS) – [find it here] – more than 70 per cent say customer centricity is very important to them. Leaving aside the question of what the other 30 per cent plan to do to keep their customers in the future, the question is: how can they build the customer-centric business they desire?
The blocker for many banks is that their aging internal systems can’t provide the basic insight needed to act. Only just over half of the respondents in the BBRS research say they have mature systems for analysing traditional customer activity such as deposits and payments in the branch. Fewer than half analyse online behaviour, a third can track how their customers interact on social media and only 29 per cent have “share of wallet” data.
Is your customer onboarding experience little more than a data dump — forms, brochures and legalese? If so, here are four tips to improve the process.
There is a pivotal moment when certain functions — previously unknown, underappreciated or misunderstood — rise to prominence and visibility among management ranks at financial institutions. For example, “Customer Relationship Management” (CRM) in the 90’s was an emerging practice with a fairly compelling idea — “Who are our customers, what do they have, and what do they want?” Today, CRM has become synonymous with technology offerings that trap and store that data rather than enabling companies to better customer needs. And, increasingly marketing and sales vie for control over their institution’s CRM systems.
Financial services organizations have the opportunity to boost revenues by at least 18% by improving their customer experience.
Today’s financial services organizations covet customer insight and understanding like never before. It represents the key to growth and profitability in an industry increasingly saddled with a more stringent regulatory environment, as well as diminished product differentiation and more limited fee-based revenue opportunities. Our current banking climate calls on financial institutions to adjust their customer service strategies to create a more profound and robust customer experience.
The answer: NOT the same as customer experience ‘improvement.’
Recently, Forrester Research, Inc.® interviewed Beyond the Arc and several other firms that specialize in customer experience management for its report on what it really takes to innovate the customer experience. Their findings state that the most important factors center on a two key objectives: having the right business model and a strong brand vision.
It’s no great mystery that consumers consider bank websites less appealing than others, but the reasons why might surprise you.
Banks and credit unions have it tough when trying to sell online. Consumers would generally prefer to be doing anything other than banking, particularly if they have a few minutes to spend on the web. So you’d think financial institutions would be doing everything possible to make banking more enjoyable online.