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What’s the problem?
Many financial services companies are worried about why their
CRM programme is not delivering what they think it should. Most invested millions
of pounds in systems and processes to enable them to know when to contact customers,
why, and through which channel. Most focused mainly on integrating technology
tools. While most software solutions mostly do “what they say on the tin”, they
do not deliver what consumers want.
These solutions are mainly product-driven - they identify
that it is the right time to talk to a customer about a particular product or
service. This approach usually fails because:
By the time the opportunity is identified, customer data is
out of date, so the offer may be inappropriate.
The technology focuses only on basic customer data and product
holdings, rather than transactional and other data that suggests what customers
are doing with their products or what they need now.
This leads to customers not being treated as individuals and
organisations being driven by process rather than value, or as we put it, to companies
focusing on making a relationship deliver what they want rather than an experience
which leads to customers getting what they need. So, this paper investigates the
difference between Customer Relationship Management and Customer Experience Management
and the damage that divergence between the two can cause.
Despite the problems many companies have encountered with
their CRM programmes, many financial services companies now have the infrastructure
to manage the “closed loop marketing” that is essential for managing the customer
experience.
A customer driven solution cannot be so product driven
CRM uses the principle of developing relationships - understanding
customers and making offers that are relevant both in terms of product suitability
and timing. Yet most CRM solutions are based on gathering data about the customer
and matching their probable needs against products or services that have already
been developed and are profitable for the organisation. Whilst this way of marketing
can be effective it will only ever suit a small percentage of clients.
Few companies can examine deeply at what the customer is doing
with their products or services. These products and services are a means to an
end and affect customers’ lives and lifestyles. That’s what’s important to them,
not the products.
When did you last hear a customer say “I want some life assurance!”
They do not want it. They realise they need it because it protects their families’
lifestyle. Is the life assurance product the important value or what they are
protecting?
Listening to customers by using technology enables us to track
behaviour, in turn allowing us to develop products for a known market. For example,
if a customer takes out a loan to buy a vehicle over three years, we must understand
what the loan is for. The amount they borrow may not provide any insight - it
could be 5% to 80% of the vehicle’s value! What provides insight is that this
customer is buying something that has a value to them – it is not just a depreciating
asset. A vehicle has a purpose. It is a means to an end. So it is likely that
the customer will replace it after three years, or sooner. This means the loan
provider can begin to market this customer for a new loan months before the end
of the original term. They could also provide an offer which locks the customer
into a new deal with them instead of risking the customer deserting them for a
low cost offer from the vehicle manufacturer.
Consumers do not want a relationship, they want to feel
valued
Most people do not want a relationship with product providers.
They do not have time for this in their busy lives. They just want to buy the
goods or services they need in a timely and efficient manner. A relationship can
be complicated. Financial Services companies have tried to change their business
model towards a CRM strategy, so that they can develop a more cost-effective way
of doing business, through up-selling and cross selling. Unfortunately, they rarely
deserve the right to a relationship with a customer because they do not deliver
anything close to what the customer expects. They claim you can access their services
at any time because of the channels that they provide. But what do customers experience?
Queues in branches, ATMs out of cash, Web Channels down, and call centres that
do not answer calls or put customers through a maze of options before they get
what they want. Customers simply want banks and insurers to do what they say they
do, nothing more. If they did that, customers would begin to feel that the services
provided are OK and might turn to them for additional products. Most consumers
are quite lethargic - they rarely quit even if dissatisfied with service
levels.
Can large financial services companies achieve close relationships
with customers? Staff are rarely interested in the long term future of the organisation.
Customer-facing staff have high attrition rates. Attention to customer requirements
may be neglected and the result is low standard service. Staff – even local managers
- have little autonomy. Managers are merely process supervisors. They have little
flexibility in decisions - they must stick to company policy at all times. Rules,
processes and policies are important, as without them there would be no control
and profit would soon diminish. However, a manager should be able to manage and
not merely pass on information. A customer with a simple enquiry deserves a response
that is quick and accurate without being pushed from pillar to post.
One of the authors went into his local bank. During a normal
transaction at the counter, he asked about the maximum amount he could transfer
into an account of another company in the same banking group using the internet.
The cashier, who had worked at the branch for over 20 years, did not know, so
she asked the cashiers on each side of her. They had even less of an idea! She
then asked the customer to ask his “Personal Banker”, but she was quickly advised
that the customer could never get hold of him! She continued by pursuing the branch
manager and when he was finally tracked down, he did not know either. She had
to ring head office to get the answer and the whole process took over 12 minutes.
Lack of knowledge was not the problem. It was simply that
no-one knew where to get the information required. Most consumers do not expect
customer-facing staff to have all the answers in their heads, but they do expect
a quick, accurate response. Giving an answer is one thing. Giving the wrong information
can be infuriating and may cause the customer to look elsewhere. This can be overcome
by using “knowledge base” technology to empower staff. An added benefit of this
type of support is to raise employee satisfaction, as they feel more in control.
Knowledge allows staff to speak with confidence to customers. This in turn raises
customer satisfaction. Say it once, say it right. Customers remember good service
like this.
Customers want to feel valued. Their experience whilst dealing
with the organisation is important. Products and services rarely change quickly,
but how you distribute them changes quickly. How you distribute them builds the
relationship with customers, ideally based on your good value, their good experience
and their trust that you will do what you say you will do.
Customer satisfaction is the real driver to wallet share
and sales increments
A very satisfied customer is more likely to recommend your
organisation to others and to buy more from you. So, a customer who is satisfied
is worth far more to you financially. So you need to ensure that customers are
managed effectively to ensure that they are kept satisfied.
How do you keep most customers satisfied most of the time?
It is unrealistic to aim to keep all your customers happy
all the time -you are dealing with real people and their emotions. You can never
predict what state these will be in when they or you interact. However you can
ensure delivery of the basic attributes of Customer experience Management by following
these simple rules.
- Provide knowledge of the organisation (staff empowerment)
- Do what you say you are going to do (expectation management)
- Keep the customer informed (communication)
These rules sound easy but most organisations cannot consistently
deliver on them. Often the issue is that customer service staff do not tell customers
what to expect or do not know what to tell the client at all!
A colleague had a motor insurance claim involving an accident
with another driver who had no motor insurance. When submitting his claim over
the phone he enquired how he stood. The agent replied that they did not know as
they had never dealt with that before! Imagine how comforting that was for the
customer!
How can Customer Experience Management connect with a Customer
Relationship Solution?
If poor expectation management, poor communication and lack
of knowledge are issues for you, you need to understand how to avoid them. How
do you enable good staff to work better with customers?
To manage expectations you need to know what customers expect
to know - product terms and conditions, processes, regulations, company policies
and anything else that affects customers. You can give them the knowledge they
need through intuitive tools and applications, whether automatically through web
channels and ATMs, where notes or pop-ups provide the detail, or where there is
human intervention, on request from databases and knowledge stores. By providing
the right information at the right time, you start to manage customers’ expectations.
If this is done in a positive and friendly way, customers begin to feel valued
and get a different experience of doing business with you.
Setting an expectation like this is just one part of the customer
journey. Confirming the expectation by positive communication throughout the journey
is all important. Consumers are cynical. When they are told something they often
do not believe it. To confirm what has been said by letter, email, SMS or other
mediums is as important as the original message. It inspires confidence that you
will do what you said you would do. It confirms what stage of a process they are
in. If anything does go wrong, you can quickly establish what was expected and
get the situation under control again. Customers understand that things can go
wrong. Dealing with problems quickly and effectively is a great way to inspire
confidence.
One of the authors told an insurance company about a vehicle
breakdown covered under his policy. He was advised what would happen, which organisation
would assist him, the engineer’s name, and when they should arrive. As the customer,
who was going through the annoying period and frustration that my car had broken
down, he failed to write any of this down. He was therefore very pleased that
two minutes later he received a SMS message on his cellphone stating exactly what
they had just said. More importantly, the engineer arrived at the right time and
fixed the vehicle. A great experience, born out of a bad situation.
This could have been achieved, irrespective of agent quality,
without supervision or extensive training, with the right tools and application
to support the process. More importantly, they could create a good customer experience
which makes the customer happy. This would then give them the right to build a
relationship with me. If they followed the customer journey through to a satisfaction
questionnaire (which the insurer did), the customer would be more likely to give
them feedback and probably answer some other questions about my hopes, wants,
aspirations and lifestyle that would help them promote other products and services.
Such situations are when the CRM processes come into their
own. By creating a good customer experience you encourage customer loyalty, reduced
customer churn and, most importantly, you begin a relationship based on trust
that allows you to establish what it is that is important to your customer and
how you can develop products and solutions that are likely to be valuable to them
and your organisation.
Is Customer Experience Management the real CRM?
No. It is the mechanism that fuels it. Without the right capabilities
you can’t feed relevant data into your CRM system and create the relationship
you want.
About the Authors:
Andrew McQuade, Managing Consultant - IBM Business
Consulting Services
and
Professor Merlin Stone, Business Research Leader -
IBM Business Consulting Services, IBM Professor of Relationship Marketing - Bristol
Business School, Director - The Database Group Ltd, Digital Data Analysis Ltd,
The Halo Works Ltd, Nowell Stone Ltd and QCi Ltd.
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