There’s a saying: People won’t remember what you said or did; they’ll remember how you made them feel. And banks are taking it to heart.
“I would say in the last three to four years the focus on customer experience has increased dramatically,” says Lance Kessler, president of Lance Kessler and Associates, a marketing consulting and training firm in Mechanicsburg, Pa.
It may be growing, but it is far from a new concept, especially for community banks looking to stand out.
“Community banks realized they can’t win the price game,” says Kessler. “The value that they truly create that’s unique in the marketplace is the experience that the customer has.”
Of course with the increased focus on customer experience, expectations have been raised.
“There’s a higher bar now than there’s ever been,” says Kevin Tynan, senior vice-president–marketing at $835 million-assets Liberty Bank for Savings in Chicago. “Today marketing requires us to not just engage, but to fulfill the needs of people and customers in more impactful ways than we’ve done before. We’ve got to listen better and give more than lip service.”
Better customer experience key for all
Customer experience isn’t a worry strictly of community banks, of course. Financial institutions of all sizes are focused on delivering on their promises to customers.
“The best way to combat commoditization is with a strong brand and a customer experience strategy that delivers on that brand, says Martie Woods, lead strategist, Thought Leadership, at Stone Mantel, a company specializing in brand and innovation insights and counseling, in an email.
“We refer to it as Promise Making and Promise Keeping,” says Woods. “Some banks do really strong brand work and a nice job of shaping the promises they make to the market. But those are short-lived and suspect without an experience strategy that ensures those promises are kept. Few banks are able to differentiate on product alone, in turn putting extra pressure on the need to know their customer base and deliver the right experience.”
Customer experience also gives banks better perspective when making decisions so they can invest in the right things.
“Banks that lack a clear strategic view of the experience they seek to deliver tend to over-invest in things that don’t matter enough and under invest in those that do,” says Woods.
Don’t expect too much too soon
In order to implement a successful customer experience strategy, a bank should start at the end—with what the customer wants. “We need to look at the world through the customer’s eyes, take research from the customer, and identify the key drivers or variables that they think are absolutely the most important,” says Kessler.
This not only helps banks visualize the experience they need to deliver on, it also helps to get all employees on the same page about what the customer experience should look like and how to deliver it.
However, Woods cautions that banks shouldn’t expect clear and easy results right away.
“The biggest issue we see in banking … is the desire to move as a herd. Or, perhaps better said—the fear to go alone,” she says. “When deciding to move forward with a customer experience focus, the team in charge has to accept the ambiguity and messiness ever-present in exploratory efforts that hold the power to deliver big results.”
Differing channel views
Aside from the challenge of spearheading a new strategy, Kessler says there are three other considerations when building a customer experience:
1. How do you create real value for the customer in that experience?
2. How do you make sure that the value you’re creating differentiates you in the marketplace?
3. How do you consistently deliver the experience no matter what touch point they interface with you on?
That last consideration reflects the difficulty any bank faces when rolling out a new product or strategy—how to reach customers across the many channels—digital and in-person—now available to interact with a bank.
Thinking is split on this issue.
One camp believes that an omnichannel approach, where a customer is able to seamlessly work and move from one channel to the next, is the ideal.
But others believe interacting and working with each individual customer in the preferred channel of their choice is enough.
Some banks, such as $24.6 billion-assets Commerce Bank in Kansas City, Mo., employ a common set of guidelines to provide a consistent experience across all channels.
“The elements of the experience may be conveyed a little bit differently in each channel, but the guidelines make sure that we’re all working to the same end, which is to provide an educational and engaging customer experience,” says Cindi Tetrault, senior vice-president and director of Omnichannel Delivery at Commerce Bank.
For example, in the branch, Tetrault says Commerce Bank would focus on the choreography of the way a customer moves through a branch and interacts. But with digital, they would focus on navigation through the site.
Movement of a customer is different through each channel and should be examined to be sure the customer experience is being met. To study this, Kessler “maps” out the customer experience by plotting all the touch points a bank has with a customer in a particular channel.
“We truly try to figure out at every touch point how can we create the end result [of a superior customer experience,” Kessler says. “We look at all the infrastructure that’s supporting it, we look at the support areas that are supporting them, and we make sure that all of that is working to create this end result.”
Fewer transactions, but more meaningful
While there are many strategies to deal with the various channels of delivery, banks seem to agree on one thing—the decline of branch transactions thanks to the rise of technology and digital channels has allowed bank employees to focus on creating more meaningful interactions in branches.
“As our customers have chosen to perform those simpler transactions on the electronic channels, that enables us to free up our bankers for those deeper conversations to make sure that they can focus on the right solutions for the customers that they’re talking to,” says Tetrault.
The fact that interactions in the branch are becoming fewer makes them meaningful—not only to the customer, but to the bank as well.
“It’s so important that customers are handled well when they come into the bank because so few of them are coming in these days,” says Tynan. “That is a way of really meeting their needs.”
4 measurement suggestions
But just how can a bank be sure it is providing a superior customer experience? By examining customer retention and acquisition figures as well as getting customer input and feedback. Mining other data—like transaction times (to evaluate wait times) and the amount of time spent on website pages—can be helpful too.
“It’s a matter of setting up benchmarks to identify points in the customer interaction that aren’t working or roadblocks in the customer’s journey,” says Tynan.
Kessler breaks down tactics for measuring customer experience into four key strategies:
1. Strategic improvement analysis. “We start by identifying variables based on the customer’s feedback and what the customer says is important and not important,” says Kessler.
These variables are narrowed down to five or six and annually measured to see if the bank is meeting all the variables and which ones they still need to work on.
2. Customer retention. Kessler says segmenting customers out into categories like existing customers, new customers, and high priority customers (those with the greatest revenue generation potential) can help a bank identify which customers they’re losing, why, and then allow them to develop action plans to get the retention rate back.
3. Mystery shopping. Designed to measure whether or not a desired experience is actually being delivered, an anonymous person goes into the bank to pose as a customer/prospective customer and then rates their experience.
4. Net Promoter Score. Customers are asked how likely they are to recommend a product/business on a scale from 0-10. Those who answer 0-6 are categorized as detractors; 7-8 as passive; and 9-10 as promoters. The percent that answered 9-10 minus the percent that answered 0-6 equals the net promoter score, which is a reflection of customer loyalty.
Both Liberty Bank and Commerce Bank cite surveying their customers—whether in person, online, or over the phone—after recent transactions as an effective measure. Commerce Bank also surveys customers about new products and solutions. They’re able to use the feedback to then tweak their offering accordingly.
No matter what measures a bank chooses to use, it’s important to allow a new customer experience strategy time to take hold before jumping to conclusions about measurements/metrics.
“Measurement should start immediately—even in the early rollout phases—but measurement structures should be dynamic and change over time. If early results are suspect or underwhelming, it is important to consider the possibility that the measurement structure—not the experience—could be the problem,” says Woods. “Too often we talk to bank executives that expect clarity and monetization of results too soon.
“Much of our work shows strong signs of success very quickly, but only in situations where we allow the work to define the path rather than directing work to preset demands.”
- The Fintech Capital: UK vs US
- Lessons Learned: What Other Countries Can Teach the U.S. About Open Banking
- What Bankers Can Learn From Voice Assistants
- Cybersecurity Start-Up Secures $23 Million in Funding Led by Intel Capital
- Banks and Other Financial Corporations Provide Double the Pension Contributions of Other Industries