When you decide to take your bank or business down the customer experience or engagement path you are at the same time making an explicit choice to do so. In bank speak – you may be making a choice to shift from more of a transaction model (Target) to a more relationship oriented service delivery model. It’s important to understand there are some transactional models that customers love – ING Direct and many online lenders. However, in the spectrum from transactional (highly retail oriented models) through high relationship models (boutique financial advisers) some level of understanding the customer needs in your target segment and how to embed those in your model are critical to both your success and competitive position.
I happened to pick up two articles today as I was musing on this point. The first was a UK survey of financial services professionals:
Leading specialist marketing consultancy and Finance Group partner, Strand Financial, together with business coaching practice, Harvey Coaching, surveyed a random sample of 102 financial services professionals. The findings indicate that for the industry to recover, Boards have to, finally, uphold the maxim that the ‘Customer Is King’.
The findings asked for views on a range of issues relating to leadership, governance and strategy within financial services firms in the UK. The results display some alarming perceptions from within the industry:
- 29% believe good governance is only adopted where there is no impact on profits
- 38% cite an emphasis in looking after new customers, as opposed to existing ones
- 51% perceive Boards as delegating the leading of firms’ brand values to middle management
- 53% assert that firms put profit ahead of customer interests
- 35% consider there is a large risk that objectives such as profit, income and growth are set to the detriment of customers
- 38% maintain that financial services firms are largely undifferentiated.
I’m not sure how much this holds for North American banks, but I’ll speculate that perhaps the UK story is directionally correct for our side of the pond. The question then becomes on of are we paying enough attention to the right level of relationship (Customer Experience or CX) versus transaction in the bank models we are currently running?
I then ran across a Financial Times article about Siegmund Warburg, considered the father of relationship banking. His client first approach was founded on a few simple elements:
- Moral Standing (Trust and Integrity)
- Reputation for efficiency and high quality brain work
- Connections
- Capital Funds
- Personnel and Organization
So taking these two together, here is my point of view:
Before you move on to building out the best social media customer engagement engine in the known universe, perhaps it’s worthwhile to step back and ask do we (1) have the right internal alignment about the customer and (2) embed that in a set of core values and business approach?
Customers listen to your promises, whether you call them that or not. In the world of near real time social media coalition building (or mob customer terrorism) it’s important to make the really tough choices of what is core.
Then you’re ready to go from good to great in CX.
Just my point of view. What’s yours?
Cheers!
{ 2 comments… read them below or add one }
I’ve been slowly digesting the processes and ideas described in a link you posted a while back from “Marketing Transformation Leadership Forum”. There are so many tools and methods to create change, but the CX starts with a C, as you’ve indicated here.
As in software development, perhaps a more “agile” approach would work best. Simply stated, massive corporate culture change in banks will not be simple. As such, taking smaller bites at the apple makes a great deal more sense – but all eyes have to be focused on the Customer in each tool/method. Big goal with smaller incremental phases.
Do you agree? Or do you think you have to swing hard for the fence?
I’m surprised at how many companies jump in wanting to execute the massive change without starting the cultural conditioning and really narrowing down via change management. I’m with you on this one Scott. My recommendation would be to “test the waters” with the leadership and organization via agile pilots using scrum or sprints (depending on which agile version you are familiar with). After establishing the scrum beachheads and understanding the broader change management (and/or cultural resistance) then a CX team will be in better shape. Said differently, taking the football player and asking them to hit a home run doesn’t sound like a formula for success.
Great question!