Bill Safran, CEO, Vizolution
In saturated markets such as financial services, products have become increasingly commoditised, with little perceived differentiation amongst consumers. With resulting price competition squeezing margins, financial services providers have looked to cost reduction to protect margins. Remote channels have offered a way to deliver services at a reduced cost, lessening the need for branches, face-to-face contact, and the high overheads associated with them.
Whilst this is no doubt good news for some customer service scenarios, where a personalised service is an overkill, for other types of customer service where the complexity is higher, there is also the chance that financial services providers are moving further away from their customers at the very time they should be keeping them close.
At a time when consumers see little differentiation in products, and margins offer little room for price competition, customer experience is offering a solution that allows organisations to break out of the cycle. Of course, this is not a revelation – Gartner discovered in 2014 that 89% of businesses were soon expected to compete mainly on customer experience. Three years on, what we now know is that organisations that have adopted a customer experience strategy as their point of differentiation have seen a positive impact on retention, cross sell and upsell – all factors essential to the health of any business. In fact, according to one survey, if provided with a good service, 68% of customers would be more loyal, 34% would use the company more frequently and 30% would spend more money.
So how do we decide where personalisation is relevant and worthwhile?
No cookie cutter CX
Of course, not all journeys have to be personalised– the quick request of checking a bank balance can be fulfilled in the same way for almost all customers. However, as a general rule, the more complex or emotional a customer journey is, the greater the level of personalisation needed. A mortgage application is a good example of a journey requiring personalisation. Here, customers are making one of the biggest purchases of their life, and the process is a complex one with lots of product options, compliance requirements and documentation. A one-size-fits-all approach would not reassure customers that the organisation has understood their individual needs and offered the best advice based on their circumstances.
The power of omni-channel
Gone are the days of banks creating processes and customer journeys around their legacy systems. Today’s customers want to choose the channel they deem most appropriate for their enquiry, and will resent being forced down the routes that serve the provider’s capabilities, preferences or legacy systems.
Crucially, Deloitte estimates that 60% of customer journeys today meander between multiple channels.This might be because customers have a question that cannot be answered in the first channel, because they have encountered a difficulty and need assistance, or perhaps even that the first interaction has generated a more complex inquiry, for example, a discrepancy in a bank statement. Customers need the flexibility to move channels if the journey demands it.
Enabling customers to not only choose their starting point, but to also switch channels in as frictionless a way as possible is crucial to the customer experience. This customer-driven approach that focuses on end-to-end customer’s journeys gives customers the ability to design their own journey.
Failed customer journeys
Digital transformation is understandably a focus for financial services providers. Many will have a 100% self-serve target, but there will always be exceptions in the journey where customers will fall through the gaps. In the case of credit checks in a loan application, most customers will be perfectly well catered for by self-service, but there will always be a percentage who don’t fit the typical customer mould and therefore left unable to proceed down the self-serve route. Without more personalised and high-touch support, these customers inevitably walk away from the transaction.
An organisation therefore has a choice – write off this percentage of failed customer journeys as lost customers, or actively put in place a selection of higher-touch personalised journeys that pull them back on track and ultimately convert them into customers.
By analysing customer journeys on a granular level, financial services providers can identify where they are failing, where gaps are appearing and give themselves the option of addressing them. By doing so, providers can begin to offer an increasingly flexible omni-channel strategy and a more personalised service to more customers, no matter how they may choose to interact with you.
Costs needn’t be costly
On the face of it, delivering a personalised service may seem like a costly exercise, but delve deeper into the metrics and a different and sometimes surprising picture emerges. Take the example of the failed loan application. By creating a digital loans journey, a provider can make considerable cost savings.However, if 20% of customers fail the digital journeys, then the cost of losing those 20% of customers may well surpass the cost saving. In other words, it is advisable to look at the cost of not doing something versus the cost of doing it.
The most frictionless journey will win
Operating in a commoditised market is difficult and driving down costs is an obvious way to deal with squeezed margins. The good news for businesses is that technology can make it possible to deliver a higher level of personalisation without the high costs normally associated with a one-to-one service.
Whether it is delivering real-time behavioural data on a particular customer, augmenting a remote customer interaction by showing and sharing documents on a screen, or implementing artificial intelligence, technology is constantly being used to deliver a superior customer service at a sustainable cost. Making the customer experience personal is more than possible, regardless of whether the product is similar or identical.
Crucially, providers must focus on servicing the customer’s journey preferences – predictable or otherwise – rather than insisting on their movement through a set of process that suits the providers’ infrastructure. This way, personalisation will be delivered quickly, experiences will improve, and the industry-wide churn will become something to only benefit from, rather than be victim to.