(This post also appeared on Geezeo Nation on January 13, 2011)
A lot has been made regarding the customer experience in recent years…and rightly so. Study after study show that a customer is more likely to remain with, or make another purchase from a company that provides a great experience than one who does not. I would submit, however, that providing a great customer experience is only part of a successful business model – as the credit union industry shows.
Year after year credit unions (and community banks for that matter) score higher than major banks in customer satisfaction and customer service, yet organic growth is slow or stagnate for those in the long tail of the financial industry. The reason for this apparent disconnect is that a major piece is missing from most financial institution’s business model: an engagement strategy. It doesn’t matter what you sell, if you can not engage consumers at the right place in their purchase decision process you will not gain as much business as you could.
Take auto loans as a case in point. As consumers have adopted the Internet as a major resource in the vehicle purchase process, manufacturers and dealers have changed their revenue model to adapt to the increase in “savvy” consumers – making less on the car and more through loan origination fees and add-ons like warranties and GAP insurance. Third party aggregators, captive finance arms and major banks have adapted to this new environment and now own nearly 84% of the new auto loan market while credit unions have dropped to less than 10% of the market…despite offering very competitive rates and a better customer experience. It didn’t have to be this way.
Credit unions and community banks are smaller and have the potential to be more nimble than their larger competitors, but fail to meet consumers where they live in two substantial ways. First, they still view the world through “channels” instead of from through the eyes of a well defined consumer segment or segments. Second, CEOs of financial institutions create and maintain organizational silos that segregate channel offerings thereby forcing the customer to engage on the organization’s terms rather than the customer’s.
The channel is dead…long live the “Job”
Viewing the world through channels is great from an organizational management point of view, but it is a disaster from the consumer’s point of view. Having a manager over each channel provides for a clear reporting and accountability structure. However, the disconnect between channels is very clear to the consumer who gets a different answer to a question in the branch than they got on the phone or the website.
Instead of organizing to support channels, the focus should be on supporting “jobs” the customer wants to get done. PayPal was created to facilitate the purchase of items in an environment where trust was extremely low (online auctions). The company has since added the ability to facilitate payments between parties where trust is high (between friends or family members)…not because there weren’t other options (cash, check, IOU, trade, etc.), but because it saw a way to help the consumer get the job done faster and more easily. Within the banking context, transferring money between accounts is a job that your customers want to do, and do with some regularity. The key here is determine how you can make completing this “job” for your customer a great experience through every possible touch point, be it branch, phone, Internet (mobile or PC), SMS, Twitter, etc.
Phone banking is a great example of not changing with the times. It is very had to use a touch tone system with a mobile device in many situations (like driving a car). Offering a voice recognition option after authentication (PIN) would provide a much better experience for the mobile user…as would a location-aware app that provides money management functions as well as the closest ATMs or branches in case the customer prefers to use those touch points.
The Consumer(’)s Rule
That brings us to allowing the customer to engage you on their terms rather than yours. To the consumer you are one organization. You are not a branch channel, a call center channel, a web channel and a mobile channel. You are the organization they have engaged (if you were lucky enough to be in the right place at the right time) to provide a service. Today, the consumer you serve is more and more likely to expect you to provide your services through some or all of the touch points they have access to in order to accomplish a job. Some jobs are ongoing (a checking account to help purchase items on a day to day basis) and some are fairly contained (a loan to buy a car).
Have you ever examined how well you help customers complete financial “jobs” through all touch points? Not sure how to answer that question? Then look at how many touch points you mystery shop and what you “shop” for. If you are not shopping every single touch point a consumer can use than you do not have an engagement strategy. If you are not testing all your touch points for every “job” a consumer may want to do you do not have an engagement strategy
What’s more, to support an engagement strategy you can not silo your sales and marketing functions…nor should you silo your sales and marketing strategies. Your use of social media, television, print, internet, business development, branch, call center and direct mail should be based on being in the right place during the decision process for each financial “job” and should be linked to a fulfillment process that lets the consumer use the touch point that they prefer and even let them switch methods throughout the process.
Finally, an “engaged” financial institution will have fully linked ongoing service processes into the marketing and sales processes to be ready to engage their customers when the customer is ready for more – think event- and behavior-triggered offers or communications. In the past this has been referred to as a “pull” vs. “push” strategy, but I prefer to think of this as the foundation for an organization ready to combine mass customization, marketing automation, and touch point integration into an engagement strategy that will leave their competitors in the dust. Are you ready to ride?