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This article was originally published in American Banker on June 25th, 2015
As an industry, banking does a poor job of connecting with customers. According to a recent Temkin Group report, consumers are more likely to recommend their fast food restaurants and airlines to a friend or colleague than their bank. Not good.
Banks can do any number of things in an effort to deliver for their customers — from offering the best interest rates to lowering fees. But before implementing these specific policies, they should take a step back to understand exactly what delivering for their customers means. In the end, perception is informed by the sum of a customer’s experiences. Service counts, of course, but it’s also about how a bank approaches its products, processes and customer interactions. Great customer experience means that customers accomplish all of their needs with minimal effort, with trust, and with a high degree of delight.
From our own studies, customers who had the best experiences were expected to stay with their providers six times longer than those who had the worst experiences. In separate research, Bain & Company found that “promoters” in retail banking have a lifetime value more than two times that of “detractors.”
So how is great customer experience delivered? In our work with more than 200 companies that exceed $1 billion in revenue, we have identified four practices that enable rapid, continuous improvement in customer experience. Together, we call these practices “operational customer experience management,” and we believe it describes a set of management practices that should be at least as central to banking as other operational initiatives such as lean management and Six Sigma.
First, banks need to truly understand how their customers see them. Second, customers’ voices should be wired into every decision, whether it is adjustments to frontline coaching or development of a better mobile app. Third, employees should be accountable for delivering great customer experiences and that service should be measured by customer feedback and other data. Finally, banks must continue to innovate as they get larger, leveraging their size along with customer feedback to experiment more and determine what works faster and better.
It’s easier said than done, because customer data is often siloed and not always accessible across teams. Each additional hurdle that customers encounter increases the risk that they abandon the bank. Everyone who interacts with the customer should have this broader view of what he or she is trying to accomplish.
One leading payments company monitors customer experiences across all of its service channels and transaction types, covering more than 40 million customer contacts per year in more than 20 languages. The feedback is delivered to each team member, rather than being filtered by a team leader. This feedback has led to more rapid improvement of products and call-center performance.
It’s crucial that such feedback is placed into the hands of employees so that they can engage customers. In a study of more than 200 customer experience programs across 11 industries, we found a significant positive relationship between the number of employees with access to feedback data and the customer experience score. An improvement in customer satisfaction directly impacts the bottom line. According to a Bain analysis, Apple found that every hour spent calling detractors generated more than $1,000 in revenue.
Feedback should be used to unearth pain points that require broader changes. The global operations team at one financial institution received feedback on things like product features, pricing and merchant relationship management. After devising potential solutions and then testing them, it identified 20 fixes that the front line could not implement itself. The institution credits an increase of several billion in payments volume to these fixes.
Not so long ago, the belief was that only a few companies with particularly inspiring leaders could deliver great customer experiences. We believe something different — that there are a common set of management practices, enabled by technology, that let any company with a committed leadership deliver experiences that create value for customers, colleagues and shareholders.