Customer Experience Strategy - a winning proposition for Retail Banking

With a dwindling Customer acquisition rate and a growing lack of confidence on the Financial Services industry in general, Retail Banks globally are not left with much choice but to focus back on boosting confidence in their existing customers and looking at Organic growth. And these can only be achieved by working on Customer advocacy as a key strategic focus. Enabling the creation of positive Customer Experience is a necessity for survival and growth for this Industry. Retail Banks globally which are the least impacted from the crisis have had the closest connections with their customer community and enabled the creation of the right experience for them.

Many surveys have proven that a positive Customer Experience improves the probability of the Customer to come back to the same Bank for the next purchase and reduces the probability of the customer to switch to competition. Moreover, a good customer experience benefits the stability and service brand promises of the Retail Bank.

If Customer Experience is the Mantra to succeed, then why is it so difficult to comprehend and implement? Simply because, Customer Experience is not in the control of the Bank. It is the experience of the Customer – something that is private and personal. However, Banks can influence this Experience to be positive by better understanding their customers’ needs & preferences individually and addressing those needs.

Personalization

Much of the Retail Banking infra-structure used till today has been developed on the Cookie-cutter model – “one offering for all” – with almost zero variance for customization to individual consumers. Fortunately, Retail Banking Industry is distancing itself from mass Banking to a more personalized form of Banking with the advancement in technology. The model has shifted from Service-Banking to varying shades of either Assisted-Banking or Self-service Banking. A primary driver for this shift has been the change in the consumer demographics. A large number of Baby Boomers (Age group: 52-62 years) are preparing to retire, while a larger number of Gen Y (Age group: 18-27 years) are entering the workforce. This shift in demographics from Digital-Adapters to Digital-Natives has had a profound effect on the Banking industry globally. Gen Y consumers are exposed to a large array of personalized service offerings, courtesy the Internet to a great extent, ranging from email, chat, social networking and streaming video. And all of this experience sets similar Personalization expectations in them from banking as well.

Today’s technology enables Banks to increasingly provide Personalization to their Customers. Banks need to be definitive in evaluating the personalization quotient of different products, platforms and tools before investing in them. From mass-offerings to personalized offerings is perhaps the singular critical success factor for Banks in the future.

Personalization can be continuously refined across multiple dimensions:

Channel convenience – how to make the access and service in each channel more personalized and consistent?

Best-fit choices – how to leverage analytics to provide the best-fit choices to help the customer at every decision juncture?

Intuitive User Interface – how to make the look and feel of every interaction channel more intuitive – You should recognize some channels (Branch, Internet, Mobile and Call Center) have the inherent ability to be more intuitive than others.

Analytics – Near real-time analytics and inference are the key to Personalization refinement. The more you analyze – Customer interactions, preferences, financial-needs etc. – the better you can leverage it to become more relevant to the Customer’s financial life. This builds up a virtuous cycle of trust and information sharing that can be further leveraged. Analytics tools have come a long way to help in this personalization process, but more advancement is still to happen in this area.

Service Excellence

While Personalization focuses on improving the Customer interaction every time, it cannot stand on its own till a Bank has a wide-array of Financial offerings (from which a customer’s sub-set of offerings can be personalized) and a great back-office operations.

In today’s competitive world, Banks need to acquire and build capability to add, modify or remove their customer offerings on the fly. Offerings should take cognizance of a variety of external factors (like competition offerings, macro economic conditions and policies, changing consumer needs & preferences) and a robust internal innovation factory that creates pioneering offerings continuously. The back-office factory (products and processes) has to continuously optimize and innovate to propel an aggressive personalization agenda. A trusted Technology and Operations partner can help in this journey.

Security

Not a day passes without some Financial Services Institution in some part of the globe being digitally attacked. Every attack maligns the Institution’s brand and value to its customers. A robust Information Security policy, a contemporary infra-structure and its flawless execution to tackle Security threats are key investments for Customer Experience enablement.

Organization culture

From the Bank or Financial Service Institution’s perspective, this is perhaps the biggest change that needs to be worked upon. A good part of the other three factors are based on Technology and its advancement. However, the Human factor overshadows both of these factors. Till such time the culture of the organization is not changed to be more sensitive to the needs and preferences of its customers, the other factors will have limited impact. Defining Customer experience as a strategic priority is a first step. An enterprise-wide CXO-level champion for the Customer Experience agenda is another must-have. A structured program to sensitize staff members continuously on Customer Experience enablement is vital.

Enablement of a positive and consistent Customer Experience can transform Banks and Financial Service Providers to being Trusted Advisors. Nowhere in history has this been more relevant and necessary than today – those Banks that embrace this opportunity will differentiate themselves from the others in attracting, retaining and growing their customer base and business substantially.

So, what is Experience?

Wikipedia's definition of Experience: Experience as a general concept comprises knowledge of or skill in or observation of some thing or some event gained through involvement in or exposure to that thing or event.

Webster's Dictionary meaning of Experience: An act of knowledge, one or more, by which single facts or general truths are ascertained; experimental or inductive knowledge; hence, implying skill, facility, or practical wisdom gained by personal knowledge, feeling or action; as, a king without experience of war.

I define Experience as:

Experience provides a means to acquire or enhance one's sensory knowledge through Observation, Action and Reflection. Experience has been long associated and bears a close conceptual alignment with Trial, as a test of Experiment.

Experience is very intimate to oneself. We can share our experiences with others, but cannot necessarily make them live that experience. Let this not be mistaken as being less influential though. Many of our experience expectations are set by the experience tales that others have shared with us. After all, each of us do not need to meet with a road accident to experience fatality or serious injury - we can opt to realize it by observing such incidents on TV and reflecting on the irreversible damage those create.

In most cases, the Experiential cycle starts off much earlier to the actual incident. Think of an adventure ride, a Roller coaster ride. Much before we go to an amusement park, we have an expectation of the thrills that a Roller coaster ride would bring upon us. When we actually go thru the ups and downs of the ride, those expectations are either met, exceeded or unmet. When we get off the ride, we are left with some residual thoughts of the ride and later on, when we reflect on the overall experience, a more coherent and comprehensive experience imprint is formed in our brain.

Lets dwell a little deeper on this. If we met a friend enroute to the amusement park, we would convey the postive expectations of the roller-coaster ride to that person. If that friend was to accompany you to the ride and be seated next to you on the ride, the experience that you would jointly have will be completely different. And if you met that friend post the ride on your way back from the amusement park, the relay of your experience could be quite different from what you would have relayed to the same person enroute to the amusement park. Think about it - it is one experience, but depending on when you had to narrate about it to somebody else, the contents and the emotions associated with it could vary. This is what makes comprehension of Experience not just a science but a mixture of art, human behaviour and science...

Experience has both an absolute dimension and a relative dimension. Let me explain these with examples. Absolute experience is savouring a chocolate for its taste, texture and ingredients. Relative experience is savouring the chocolate, and then stacking this experience with a previous similar experience.

We go thru both these experiences at different points in time. When we go thru a first-of-its-kind-experience, we make the initial impression of that experience and an Experience Imprint is created in our brain. Later on, as we go thru similar experiences, that imprint gets strengthened, diluted, retained or replaced.

Every change to the Experience Imprint leads to a change in perception of the source of that experience as well.

1. In the Chocolate savouring example, if savouring the second chocolate strengthened the Experience imprint of the first savouring, then the second chocolate will probably replace the first chocolate as a favourite.


2. If the second experience diluted the Experience imprint of the first experience, you will knock it off your consideration list.


3. If the second experience was so different that it gave a new meaning to chocolate savouring, then the original Experience imprint will be replaced with a new one.


4. If the second experience was similar to the first one, there would be no change to the Experience imprint and therefore you would be indifferent in choosing one amongst the two chocolates as well.

Corporates and business houses must ensure that their Customers go thru a positive and progressive experience in their business interactions - this is both a hygience and motivation factor for the survival and growth of the business!

Experience is very personal

Experience is yet unfathomable. With so many decades of research, we have scantily understood the capacity and capability of the human brain. Emotions are even more complex to understand. Experience comprehension requires a great understanding of both intellect and emotions.

If two people encounter the same situation, their experience would, in all probability, be quite different. The variable in such a case would be oneself - all those tangible and intangible attributes that each of us are characterized by. Infact, if we encounter the same situation twice at different times, our experience is quite likely to be different.

To attempt a comprehension of Experience, intimate knowledge of the person is vital. Knowledge about the person's upbringing, behaviour, skills, talents, experience, observations, exposure, philosophical leanings etc. to name a few provide facets of a person thru which we can make an attempt to draw a person's Experience map.

Let us talk about some real-life examples. Take any service - for example, a Retail Bank. Are you aware of any Bank that states that they will not let you wait for a Call Center Executive for more than 30 seconds? Are you aware of any Bank that lets you personalize your Internet Banking site? After all 80% of the times, we log on to a Bank site to do repetitive transactions only and each of us are most productive when the layout of the site matches our intuition...

Let us go into something more simple - a Restaurant. You go to a reputed restaurant for dinner with your friends. Your experience with the restaurant's menu spread, service, its ambience and quality of food can easily be shattered by an unclean washroom. So much so that you may swear never to go back to that restaurant again. The restaurant's core value proposition of great food will not be able to change this decision.

Prospective Vehicle owners' choose not to buy a great automobile based on trusted information about the service quality being poor or the dealers' not being very sincere and empathetic to the buyer's needs.

Each of us hold and expect some Experience values - Sincerity, Straightforwardness, Empathy etc. These values have an overbearing effect on the benefits of the product or service that we are contemplating to buy.

A good experience may not necessarily lead to a very loyal customer for a business. But, a bad experience will definitely help you lose the customer for good. While it is important to focus on all aspects of the product or service in question, a business has to equally focus on the customer's experience through different touchpoints, and ensure that the latter augment's the product's or service's value proposition, not bring it down!

Experience was not as high a challenge earlier, when most interactions were between people to people. With the advent and advancement of technology, a lot of our interactions (like this one) has become impersonal. We interact more with our computers than with people. How many times have you not felt that sending-an-email is better than picking-the-phone? Given these changes, understanding of people has become that much more important to help them live a positive experience.

I would like this blog to be a platform for exchanging views on Customer Experience - I firmly believe Customer Experience will become the key differentiator for businesses in the days to come...