The ability to improve the customer experience in financial organizations requires strong leadership, new metrics, new data analytic tools and, most importantly, breaking down the silos that have been a part of banking forever.
The Temkin Group studied the impact of improving overall experience, defined as increasing customer success, making it easier, and improving the emotional experience. The research found that a bank with $1 billion in revenue that improves their scores by 10% can expect to increase that revenue by $852.4 million over the next three years. That’s a 27.5% growth rate – just from improving your customer experience.
Companies with a poor customer experience churn through their customers. Reducing this churn, along with making additional sales from existing customers, are two of the largest benefits of an improved customer experience. Three others are customer willingness to try new products, sales through word of mouth, and customer willingness to forgive mistakes.
That’s the power of a superior customer experience. When a customer’s rational and emotional needs are met – and exceeded – that customer is significantly more likely to stay a customer, and to use your company for future needs. Banks and credit unions with poor customer experience must spend their time landing new customers just to maintain revenue.
Companies with loyal customers grow more profitably through their existing customer base. Consulting company Bain found that increasing customer loyalty by 5% leads to a profitability growth of 25-90% – no small reward!
But, before we can discuss creating customers for life, we need to stop chasing them away, which is the first risk for many brands. A particularly bad experience can end a relationship for good. Genesys found that after a poor experience, 71% of customers will end their relationship with you. Worse, 61% will go to a competitor after you mess up.
So with this, it was good to see that the banks and credit union in the Digital Banking Report’s Improving the Customer Experience in Banking survey, sponsored by Deluxe Corp., agreed to the importance of CX, with over 90% saying CX is a priority, and nearly three-quarters expecting to increase their investment this year
So, the intent is there. But is there the ability to deliver a better experience?
Unfortunately, over half the banks reported no formalized customer experience program, which makes it difficult to execute on a customer experience strategy. A clear leader – who has this as their top priority – is critical to driving success.
A visible C-Suite leader is important, because the biggest challenges banks will face is creating a seamless experience across channels. Within the bank, different leaders are tackling customer experience needs separately. Your website team doesn’t talk with the branches, who are disconnected from your customer service team, which never meets with those responsible for your app.
But your customers and members don’t care. They expect you to operate as one seamless organization. Policies or procedures that differ between channels drive them crazy.
Smashing Your Silos
Smashing your silos takes deliberate action. When asked for their most challenging customer experience projects, over one-quarter of survey respondents answered either “creating an integrated, multichannel customer view” or “multichannel customer experience.” This is probably because nearly half of respondents cited that their biggest obstacle is “siloed systems preventing easy sharing [of] information across all touch points.”
Creating a unified approach isn’t easy. But it’s the best way to stay ahead of your competition – or to pass them by.
So, how do you create a unified, multi-channel approach? Customer experience best practices provide a clear strategy: Map Your Customer Journey; Create a Compelling Vision; Implement Governance; Train your Teams; and Change your Metrics.
Map Your Customer Journey
Nearly half of the global respondents say they’re planning to map out the customer journey soon. That’s important – you can’t target your customers’ most important needs if you don’t know what they are. Unfortunately, mapping the customer journey is more difficult than it seems. According to our cross-industry study on customer journey mapping best practices, half of all journey mapping initiatives fail to drive change. The survey reveals three keys to success:
- Involve broad, cross-functional teams. You can’t drive change if those who need to change aren’t a part of your initiative. Too many times the mapping is done in customer experience or marketing, and the results are only shared after the fact. Failing to involve impacted teams in the process prevents them from buying into the results, so no action is taken.
- Involve customers. While this should be a no-brainer, too many organizations try to map out the customer journey in a conference room. If your customer isn’t involved, it isn’t a customer journey map – it’s just a hypothesis.
- Select the right journey. You can’t drive change if you don’t know what change you’re trying to drive. For many, an end-to-end journey will show when silos conflict.
Create a Compelling CX Journey
Where do you differentiate? Are you the relationship bank? The easiest credit union to do business with? The safest? A wishy-washy “Customers are our most important assets” vision doesn’t give a specific direction.
Is it any wonder why your silos take conflicting approaches to improve your customer experience? Give clear direction for where to prioritize your efforts, informed by your brand. Unfortunately, nearly 30% of survey respondents reported that one of their biggest CX obstacles was “Lack of a clear customer experience strategy or executive commitment.”
Use your vision to drive governance. Governance involves having your leadership regularly review your CX program, and make investment decisions on how to improve. It’s very difficult to drive a successful program without it.
Train Your Teams
Once you understand your customers’ journeys and have a compelling vision for the future, you need to communicate this to your teams. Nearly half of all respondents say that they are already providing ongoing training on customer experience to employees, and it was the third in the list of most-successful CX projects. What are the rest of you doing?
Change Your Metrics
Too many banks are using transactional survey results to measure their experience. Over half said that they use “Customer Satisfaction for [a] specific interaction” as the metric to track the success of a customer experience initiative. Yet, McKinsey estimates that, “Journeys are 30% more strongly correlated with business outcomes [than measuring individual touch points].”
It’s time to change your metrics to focus on what customers tell you is important. We strongly recommend using the journey mapping process to understand what your customers value – then changing your metrics to reflect this. The best metric for tracking customer experience success rarely comes from a survey. It comes from customer-based Key Performance Indicators (KPIs], such as customer churn, average products, or, better yet, Customer Lifetime Value. These metrics track the real value you’re providing your customers.
Smashing your silos is one of the most challenging customer experience initiatives you can face. But your competitors are starting down this journey – isn’t it time you joined them? It’s the only way to earn the 27.5% growth that comes from an improved customer experience.
Purchase the Report
The Improving the Customer Experience in Banking report, sponsored by Deluxe Corp., provides insight into the progress being made by financial institutions globally in the area of customer experience. Beyond a review of goals and investments, this report delves deeply into the strategies, effectiveness, challenges and measures around improving CX in the banking industry.
The report includes the results of a survey of more than 250 financial services organizations worldwide. The report has 85 pages of analysis and 52 charts/graphs. Most importantly, the cross-tabs by organization size and type allow a comparison of peers. There are also guest articles from Bank of America, Brian Solis and other experts on customer experience.
You can download an executive summary of this Digital Banking Report by clicking here. Subscribers to The Digital Banking Report and those wishing to purchase the complete report can access it immediately by clicking here.