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Banking in a Digital Age
Customer Experience Management
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Research has shown that improving customer experience (CX) is now a key objective for financial Services (FS). CX has become the single most important way for an organisation to achieve success often becoming its key differentiator and competitive advantage.
Providing excellent customer experience management can have a number of potential benefits to the organisation these include: increased customer satisfaction as their needs are constantly being met or exceeded. Increased loyalty and advocacy, greater customer retention, increased opportunity to cross sell, reduction of costs more motivated staff, improved staff retention and accelerated acquisition.
In order to succeed in providing excellent customer experience, many companies follow the 6 pillar framework, which can be used to measure and benchmark customer experience performance. Through research a company called “KPMG Nun wood “found that organisations that excel in the 6 pillars ultimately create greater shareholder value, achieve economic success, greater brand loyalty and improved net promoter scores (NPS). The 6 pillars are; Personalisation, Integrity, Expectations, Time & Effort, Empathy and Resolution (PIETER).
In order to succeed at CX companies need to map their customer journeys and touch points to find ways to provide exceptional customer experience to always delight the customer. They also need to engage in measures to improve their I.T. systems including mobile channels and apps. Nevertheless there is no magic bullet. To ensure success there must be strong, internal commitment including financial resources. There must also be continuous, external engagement with customers to understand what is working, what isn’t and then implement these changes.
Customer Experience Management, its role in Financial Services and why it is important
Customer experience is defined as the sum of all the interactions a customer has with a company. It is also about the bigger picture of what happens before and after these service interactions from the quality of customer service, its reputation, management, marketing packaging, product and service features, ease of use and reliability. Together these interactions all add up to critical moments the touch points that create an organisations overall customer experience.
Customer experience is becoming an increasingly important factor in global financial services. According to Gartner by 2020, 90 % of Business will compete on CX rather than on product or price.
Gartner defines customer experience management (CEM), as the practice of designing and reacting to customer interactions to meet or exceed customer expectations. Customer Experience management looks at the overall experience customers have with an organisation and uses customer insights to develop a cross functional strategy that increases customer satisfaction, loyalty and advocacy. Customer Experience strategy requires change and looks at all elements across people, processes, and products that impact the customer experience.
CEM requires a robust framework incorporating four key elements: Appropriate governance to ensure ownership and accountability throughout the organisation; Regular communication and awareness of the customer insights; Measurement against relevant key performance indicators (KPIS, such as NPS Net easy complaints); Ongoing training and coaching to equip staff to deliver the desired customer experience.
The potential benefits of customer Experience in financial services. Excellent customer experience management has a number of potential benefits to the organisation these include: Increased customer satisfaction as their needs are constantly being met or exceeded. Increased loyalty and advocacy, your most satisfied customers become your most loyal customers and in turn promote you to others. Increased retention if customers are satisfied with their overall experience with the brand they are less likely to switch. Increased opportunity to cross sell, satisfied customers who have has a positive experience with an organisation are more open to taking new products and/ or do repeat business with the organisation. Reduction of costs – for example through incentivising customers to interact through digital or online channels. Motivated staff and improved staff retention – an effective customer experience programme must also focus on the experience of its staff to ensure that they are in a position to deliver remarkable CX moments. Research has shown that there is a clear link between customer satisfaction and employee satisfaction. Finally Accelerated acquisition – by making it easier for customers to do business with the company and having a right first time approach.
By optimising your customer experience at every touch point companies can ensure a more seamless customer journey. This can potentially increase revenue by up to 15% and lower customer services costs by 20%. However, it is not enough to just look at individual touch points the company need to understand the entire customer journey as a whole. This makes it easier to see the big picture and deliver unified and consistent customer services.
Analysis of customer Experience in financial services.
The Credit union provides the best CX in Ireland. This brand excels in demonstrating integrity and empathy. Evident in the time and expertise they spend consulting with customers and their personalised community approach. However, Ireland still lags behind the UK and the US, in giving great experience to its customers, indicating that many companies including FS are still over promising and under delivering.
Despite the importance of CX, some companies do not understand why they should worry about customer experience. The results of the survey of 362 companies by Bain and Company found that although 80% of the companies believed that they were providing a superior experience only 8 % of their customers believed that this was the case.
In order to deliver a more consistent customer experience, many companies are focusing on mapping of customer experience journeys. This involves stepping back and identifying the nature of the journeys customers take from the customer’s point of view, understanding how customers navigate across the touchpoints as they move through the journey. Anticipate the customer’s needs, expectations and desires during each part of the journey, building an understanding of what is working and what is not ,making changes to the most important gaps and opportunities to improve the journeys, getting to grips with fixing issues and redesigning the journey for a better end to end experience.
Example of a particular customer and their journey within my organisation
The Customer Persona.
The customer is Jim, aged 60 and he lives in Dundalk. Jim is a retired guard he has a good pension and is financially secure. He has 2 adult children both living in abroad. He wants to apply for a Credit Card to start shopping online and for going on holidays abroad. Jim is a Silver Surfer and although he has a long standing relationship with his bank, he is very sceptical about financial services industry in general particularly in light of the recent financial crises. During this process Jim will have a range of emotions and concerns. He feels happy and excited getting the Credit Card and about going on holiday. However, he also feel stressed and overwhelmed by the thought of the application process.
Steps involved in the Customer Journey
There are three steps in the Customer journey; Application, Approval and Resolution. The Application Stage, where Jim will begin his customer journey and apply for the product offering (credit card). He will apply either online. This involves providing the required personal information as requested by the financial provider and may include the customer having to provide documentation such as Identification or statements.
Next is the Approval Stage which involves the company internal approval process thereby reviewing the customer’s financials to determine if they are eligible for the product. This stage may involve the customer providing supporting documentation, a credit check is normally carried out and at the end of this stage this will lead to an approval or decline for the customer. Where the customer is approved they will receive their product or service (credit card), along with the terms and conditions of the product within a few days of approval.
Finally at Resolution Stage here any customer queries, delays, issues, or problems are resolved or progressed to conclusion for the customer. Examples here include if documentation goes missing, or a card is lost or stolen.
Needs, wants, concerns and expectations of the customer at each stage of the customer journey.
At the Application Stage Jim will expect to be made feel welcomed and valued by the organisation from the outset. He expect to be able to engage with the organisation through their preferred customer channel of choice (online, phone or branch). The customer will expect their needs to be established (Debit/Credit Card) from the outset. Jim will want to obtain clear product information, product types, eligibility criteria, repayments and the steps involved in the application process and how long the process will take. Jim will assume that the information they require on the Credit Card will be provided in an easily understood format, not too lengthy and not involve too much jargon and not too technical otherwise he will get confused or lose interest in the process. He will also expect that the financial organisation will treat them honesty and with integrity in particular with customer expectations around service (accept/decline). He will expect that a full and consistent message is given with no surprises for example being asked for additional information or documentation at an advanced stage in the process that was never mentioned from the outset.
During the Approval Stage Jim will also have a number of needs, wants, concerns and expectations? These include an acknowledgment that the application is received. Jim will assume that the bank will be appreciative of their Business. He will want to get a personalised follow up through either direct contact or through their channel of choice. Jim will anticipate feedback regarding next steps to let him know how the application is going or if there are any delays in the process or if further information required.
The customer will want to have their expectations managed in term of their eligibility and they will need to know realistically how long the process will take, where the approval process goes off plan then then realistic timelines must be set. At all times the customer will expect a clear understanding of the process involved and once approved they will want to receive the product as soon as possible. Jim will want to deal with one bank official where practical and to be fully informed on how the process works i.e. card will be issued in the UK so may take longer to be received.
Resolution Stage .During the customer Journey there are also a number of potential pitfalls or issues that may occur which might impact the overall customer experience. If the customer experiences poor service, delays, and a decline or if their card is lost or stolen then the customer assumes that they will be treated with respect and integrity by their bank. They will expect that the bank will be transparent and that they will be regularly updated at each step so that they are fully aware of where the application is at and the steps being taken to resolve the problem. At a minimum the customer will expect a clear and concise explanation of how the issue occurred and quick resolution where practical. He will expect to be shown empathy and for the bank to demonstrate understanding of the customers position. Jim will want to be given reassurance if the card is lost or stolen that their security is not compromised. The Customer will want to know that they can access an out of hours help line service for assistance. He will expect at a minimum that the bank will apologise and take personal ownership and accountability for any delays or errors in the process.
KPMG Nun wood 6 pillar framework,
In order to succeed in providing excellent customer experience, many companies follow the 6 pillar framework, which can be used to measure and benchmark customer experience performance. The 6 pillars are all psychological drivers of emotion. Through research a company called “KPMG Nun wood “found that organisations that excel in the 6 pillars ultimately create greater shareholder value, achieve economic success, greater brand loyalty and improved net promoter scores (NPS). These pillars are now widely used in several countries including ROI, UK, USA and Australia.
The 6 pillars are; Personalisation, Integrity, Expectations, Time & Effort, Empathy and Resolution (PIETER). These pillars interlink.
Personalisation-This pillar involves using individualised attention to drive an emotional connection with the customer. This shows that the company knows the customer. FS companies already hold a lot of data on the customer’s financial transactions so they already know a huge amount about them. This data can be used to leverage this and will greatly improve the customer experience. It needs to start with the way that staff interact, by asking the right questions, listening hard and getting to know the person. This will establish their needs and wants. Thereby creating a caring culture and making the customer feel valued and appreciated.
Examples Customer Champions in this pillar are: Amazon referred to as the king of personalisation First Direct who recruit staff from the caring profession and National Building Society who have heavily invested in technology to help them remember customers and their preferences.
Recommendation as to how the organisation can meet and/or exceed the customers’ expectations Personalisation can mean simple solutions such using making the customer feel welcome. IP geo recognition should consider the customers age and demographics and things like their preference for the best time to be contacted.
Integrity –This is the single most important pillar for the FS industry. It involves being trustworthy and creating trust. Trust is essential and without it you cannot succeed in CX. When it comes to integrity, the banking sector has a lot of work to do in order to instil trust in customers. Trust is built solely over time, interaction by interaction and can disappear in an instant.
Examples Customer Champions in this pillar are: USAA who actively practice down selling, ensuring the customer only gets exactly what they need. Santander Bank realise just how important trust is and give new customers to their 123 account what they call the red carpet welcome creating a good impression from the outset and rapidly accumulating trust in the process.
Recommendations as to how the organisation can meet and/or exceed the customers’ expectations.
Demonstrating to customers that FS are acting in their best interest, showing that they care and value customers by actively listening, asking the right questions and demonstrating understanding.
Trust is built upon going what you say you are going to do. Keeping promises to customers, meeting deadlines and following up is vital. Language is also very important in trust building. If the customer does not understand the products and services they will not trust them.
Expectations- Managing, meeting and exceeding customer expectations is key to customer satisfaction, delight and loyalty. CX is measured on expectations. Within Banking expectations are low due to trust issues so there is a tremendous opportunity to manage and exceed customer expectations. It is critical for organisations to try to find out in advance what their customers’ expectations are, because failure to meet or exceed those expectations could lead to dissatisfaction & defection.
Examples Customer Champions in this pillar are: Zappos who invest in customer experience rather than advertising and First Direct as their customers know exactly what they’re going to get and are consistently delighted those expectations are often exceeded.
Recommendation as to how the organisation can meet and/or exceed the customers’ expectations. Expectations should be set accurately, be very clear on timings and what the customer needs to do. There may be times when you cannot meet an overt promise. This is the time when the bank needs to over deliver. Under promising and over delivering key here. Setting realistic times and agreeing a clear coms process during the application and approval stages are required. For example innovations such as online trackers could be used. During the resolution stage giving clear and concise information on how the problem occurred and providing the customer with a quick resolution will meet/exceed the customer’s experience.
Time ; Effort- Minimising customer effort ; creating smooth processes. Banks in particular are making big improvements in this area by investing heavily in easy to use mobile and online customer channels. However, compliance and processes can make other areas of service and therefore the experience, particularly difficult when it comes to time and effort.
Examples Customer Champions in this pillar are: TSB who offer a strong degree of flexibility in order to make the banking process as possible. USAA who have a real time app for initiating motor insurance claims.
Recommendation as to how the organisation can meet and/or exceed the customers’ expectations. During all three stages customers should not have to wait more for more than two minutes to talk to someone. By listening to customers and understanding their circumstances and needs can really help when addressing time and effort. Ensuring that all instructions are clear and the process is easy to follow will also help. Companies need to stay one step ahead of the customers and anticipate any negative situations before they develop. Endeavouring to deliver first point of resolution, customers expect the person they are talking with to have all the right information to hand and to know more than them. Great Support services including live on line support works well to humanise this experience as much as possible.
Empathy- Achieving an understanding of the customers circumstances to drive deep rapport. Another important pillar and one that banks are highly disconnected from. Within this pillar there is a need to recognise that all customers are different and this is where the company needs to literally walk in their customers shoes. Nothing achieves greater customer loyalty than empathy.
Examples Customer Champions in this pillar are: First Direct employees are good at taking ownership. They listen carefully, probe gently, then take ownership to resolve the issue. USAA has built its entire customer strategy around empathy. Every aspect of their business is geared to seeing the world from their customer’s perspective and reacting in exactly the right way for their customer.
Recommendation as to how the organisation can meet and/or exceed the customers’ expectations.
At all stages in the process the company must actively listen to the customer and choose the right emotional response to a situation and the right tone of voice. This may be sympathy, reassurance, immediate action depending on the issue. Emotional intelligence in staff is key to delivering this. Encouraging relevant conversation with customers, showing interest, being friendly and showing that they are valued establishes an emotional connection.
This pillar is also fundamental during the resolution stage. For example by demonstrating to the customer that you are going to own their issue. Customers want to know that someone in the company is taking personal responsibility for helping them. Showing that you care by giving special attention going out of your way to help them or giving them something extra they might not expect.
Resolution – Turning a poor experience into a great one. Resolution is a very powerful tool in CX. When it comes to CX excellence, it is not the problem that bothers the customer, it’s how you address it. Resolution can be seen as a huge opportunity to turn a customer complaining about a problem into a customer telling all they know about an amazing experience they had.
Examples Customer Champions in this pillar are: Nationwide Building Society who actively encourage customers to share problems and issues which enables root cause analysis and resolution planning Tesco Online Delivery empower their drivers to deal with any issues customers may have immediately for example breakages.
Recommendations as to how the organisation can meet and/or exceed the customers’ expectations. Resolution at first point of contact and first contact ownerships have all driven dramatic improvements. Don’t assume the customer is guilty. Making sure that resolution process is designed for the 99% genuine customers rather than the 1% who are not.
Apologies should be sincere and show empathy for the customer and the situation they are in. Responding with speed and keeping the customer up to date with progress. Identifying opportunities to surprise and delight a customer with how you fix the problem Encourage staff to demonstrate how important the issue is to them and help them to go the extra mile. Where possible, give the customer resolution options to see which one suits them best.
CX has become the single most important way for an organisation to achieve success often becoming its key differentiator and competitive advantage.
In order to succeed at CX companies need to map their customer journeys and touch points to find ways to provide exceptional customer experience. They also need to engage in measures to improve their I.T. systems including mobile channels and apps. To ensure success there must be strong, internal commitment including financial resources. There must also be continuous, external engagement with customers to understand what is working, what isn’t and then implement these changes. For companies who master this, the reward is higher customer and employee satisfaction, revenue and cost improvements, and a lasting competitive advantage.
CXi.ie (2015). Ireland Customer Experience Report 2015. Ireland Customer Experience Report. online The CX Company. Available at: http://thecxcompany.com/cxi-reports/ Accessed 13 Apr. 2018.
CXi.ie (2016). Ireland Customer Experience Report 2016. Ireland Customer Experience Report. online The CX Company, pp. 18-20. Available at: http://thecxcompany.com/cxi-reports/ Accessed 13 Apr. 2018.
Meyer C and Schwager A, (2007 ) Understanding Customer Experience Harvard Business Review
Alabed, I (2017),The Importance of Customer Experience Aptean.
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