Now that the economy is starting to recover, enhancing the customer experience is becoming a necessity for banks, brokerage houses and other financial services institutions that want to win back and retain customers, according to a financial services executive at business consultancy, BearingPoint Inc.
A BearingPoint survey of leading financial institutions, conducted by the Economist Intelligence Unit (EIU), found that a customer's unfavourable experience is the root cause of many of the customer relationship problems currently plaguing the financial services industry.
"The key to improving customer relationship management (CRM) is to identify events that customers perceive as 'high value', or key moments with their institutions, and enhance those interactions so that the customer's experience is very positive," explained Mindy Propper, vice president of financial services for BearingPoint. "Companies should not spend as much on things that customers see as 'low-value'."
"Choosing to redesign customer interaction from the customer's perspective allows for a more focused effort that translates into mutual value for your institution and your customer," Propper added.
Advocacy very low
The survey found that less than 22% of financial services executives believe their customers would actively promote their company to family and friends, despite the billions of dollars spent on CRM applications. But, according to BearingPoint, it is almost presumptuous of such institutions to think they know how to manage the relationship with their clients, when in fact legislation such as the 'Do Not Call' list have effectively empowered the customer to determine the type of service they should receive from those companies.
Consequently, BearingPoint now offers a new Customer Experience Management mapping solution to help financial services companies identify ways in which they can create the optimal customer experience and realise the true potential of their current and future CRM tools and systems. The BearingPoint offering shows financial services companies how to implement three steps in winning back customers:
- Understand the customer by identifying the customer's desired experience when interacting with financial institutions, from functionality to privacy provisions;
- Design the systems architecture for future customer experience by realigning and/or expanding existing capabilities, from enhanced segmentation to modality management;
- Optimise the process by identifying activities that enhance customer experience and value, and by eliminating those that detract from them.
The 'Wake-up call to financial institutions' survey's other findings included:
- Nearly all (92%) financial services executives surveyed acknowledge that there is a significant opportunity to enhance customer loyalty by improving the quality of their customers' experience.
- More than one-third (35%) said the improvement in loyalty would be "dramatic".
- Half (50%) of the financial services institutions surveyed invest less than US$1 million annually in developing the customer experience. Despite huge investments in CRM, to date, very little has been focused on enhancing the customer experience.
- Two out of five (42%) of financial services institutions surveyed still interact with their customers within product silos.