Customer experiences highlight the danger of businesses taking relationships for granted

The sage advice “Don’t bite the hand that feeds you” needs no introduction but it clearly infers that one party is more needy than the other.

It’s a sentiment that’s always been true in a commercial context since the earliest days of trading.  In today’s world though, while the business side is becoming increasingly reliant, the experience they present in search of short-term results can push their customers away rather than bringing them closer.  What’s worse, is that it’s especially magnified – not to say ironic – when the hand that’s doing the feeding has made a commitment, with the inevitable result that the business gets dropped and the customer turns away to move indifferently on.

The very mention of a “relationship” conjures up different meanings to different people yet it is a ubiquitous byword for underpinning success.  Our focus on customer experience, on what it’s really like to do business, is helping to explain why that potential misunderstanding can have serious consequences.Customer Experience vs Customer Service

Let’s be honest, it is really only the organisation that wants or even talks about the proverbial relationship.  The P&L and share price are much more dependent on their customer than the other way around.  At its core, it means that the client simply plays along until a better offer appears or they have reason to suspect a lack of value, trust or respect.

What is intended by one party as a commitment to be in it for the long-haul can be seen by the other as an opportunity to take advantage of, worrying about tomorrow, tomorrow.  Harsh?  Well, customer experience feedback is showing that even where – or because – a client does commit, they are made to feel that the business is a bit too needy, being greedy, embracing the relationship with the grace of a pick-pocketing bear-hug.

Whether necessitated by the economic environment, organisational complacency or driven by the personal short-term agendas of those in charge, there are signs emerging where such conditions serve only to increase the likelihood of a customer choosing an alternative next time, defeating the point of a business creating the relationship in the first place.

To illustrate the point let’s take two examples.

Firstly, legal services.  There are many law firms and other B2B companies who are exemplary at managing their client experiences and will do so for a long time.  There are some however, who, having worked hard to win a new contract, will try to extract as much revenue from that arrangement as quickly as possible because it might not be there in three years when it’s due to be renewed.

Patently, that short-term approach of ignoring what clients really value – things like charging hourly rates for what should be fixed-price work, showing a lack of understanding and having nasty surprises or a lack of information on invoices – is a self-fulfilling prophecy and will actually make sure the client will not renew in three years.  At best there won’t be a happy exchange of testimonials and worse, the client may pull the plug before the contract expires and explain why to all of their contacts.

Secondly, rail operators.  One would think that securing a fixed-term franchise is great news, and it should be.  A foot in the door for all those future contracts too.  But reading passenger reviews of one particular rail company in the UK reveals evidence that one person’s short-term is another’s long-term.  Investors rightly expect a return on their investment but those behind the franchise operators may have tipped the balance in extracting so much jam today that they now risk having no bread and butter tomorrow.

If their trains are filled with more people than there are seats, is it because their passenger experience is so good or because there’s a coach missing as a result of cheaper but longer maintenance schedules?  Or, that they don’t care about charging full price to stand for an hour in a draughty, noisy place?Mind the gap between Service and Experience

For some, the basic but unmet needs of reliability and cleanliness are still objectives and talking points for franchises rather than being the norm.  And, despite broadband wi-fi being available everywhere from my local café to an Airbus A380, we were told yesterday that rail companies in the UK should be able to offer wi-fi by 2019.  I know that’s more of a capital-intensive offering than getting staff to smile but still, 2019?

So, while some operators have fans rather than passengers, why is it that others are failing?  The word on the seats about this one major operator is that service has not improved noticeably since the franchise began – there are still broken doors on carriages and paid-for extras don’t materialise.  Even worried staff are saying everything’s on hold until (if) it is renewed, due in a year.  It’s easy to see how even just an ‘ok’ service then in turn breeds a shared cynicism;  it is also believed, rightly or wrongly, that a key metric in that renewal pitch is on-time arrivals – something that’s easy to achieve high scores on if you’re also in control of the timetable.

We know that with the right experiences, customers will choose to come back next time and it is that – the accumulation of many very short-term affirmations – which gives longevity to what businesses see as the elusive relationship.

So even where a contract, commitment or lack of choice exists, the company being fed would do well to act as if there is no long-term nature, no assumption about next time.

Their customers don’t make rash assumptions or see it that way;  what they do see is that on the other end of the hand that is doing the feeding they also have a pair of legs, ready to run at the first sign of a bite to a more appreciative recipient…

Luxury or productivity? The question of value for Business Aviation’s customer experience.

FBOs and charter airlines are in a strong position to capitalise on the belt-tightening consequences of recent economic conditions.  That’s providing they are able to articulate their value in a meaningful way. 

Value, to paraphrase, is in the eye of the beholder. Understanding what that means in reality and then being organised to do something about it puts companies on track for that competitive edge and long-term growth and stability they need.

Focusing on customers is nothing new.  In designing and implement customer strategies, there’s no shortage of advice on why that’s a good thing.  But the piece that’s often missing is how to use it in a way that creates real business benefits.

Here are some tips that go some way to plugging the gaps.

Customer journey mapping

“We need a customer journey map for that” is a common call that’s heard in workshops aiming to lift the levels of customer service.  Unfortunately, what gets put on the table is just as often a linear process map, an operations manual or a sales checklist.  They give a starting point but little in the way of direction.

A good journey map is itself a means to an end.  It will give everyone a common version of what it’s really like to be a customer.   It points to where effort and resource needs to be focused and it provides others across the business with critical information about how best to achieve their own individual goals.  Most importantly though, it forms the platform of knowledge on which future decision-making is based.

It is therefore the output and what is done with it that counts. There’s no golden rule about what the map should look like, it must simply work for your organisation in a credible way that tells the story of what the opportunities are and why.  The tighter the scope the better.  For example, a forensic look at the tablet-based booking process for a high-value, regular customer or the welcome experience for a new-to-business-aviation client will yield more actionable and effective insight than a one-size-fits-all approach.

Understanding the customer’s perception of what happens every step of the way, set against what should happen and what drives value for the business, will flush out detailed commercial considerations.  What does good look like?  How do we compare? What does this customer (or customer type) really value and how well do we do it?  What are the unintended consequences? If we’re over-delivering in an area that the customer doesn’t see as a priority, can we save costs there?   And so on.

With robust leadership and governance, the journey map makes sure the right activity is prioritised, the right people are held to account and the right measurement programme is in place to perpetuate improvements.

Wanted: to know what our customers tell each other that they don’t tell us

Today’s customers will sit down to dinner tonight with family or colleagues and share a story or two about their flight(s).  It would be great to be a fly on the wall but with the journey mapping having created pre-meditated and dependable experiences, when the chairman asks if we know what they are saying not only can we answer “yes”, but we can also articulate how that is adding value to the business.

Commercial benefits

Business aviation is no different from many other markets in that standing out from the crowd is increasingly as difficult as it is necessary.  But for those who place a spotlight on getting things right, the commercial benefits are as much non-financial as they are financial.

Collecting first-hand evidence of what works for customers and their own internal stakeholders back at their office shapes strategic as well as tactical decisions.  It means the weaknesses and inflexibility of commercial aviation alternatives can be articulated to best effect. It helps recognise how much competitors might include video conferencing.  It flushes out how customers want to pay and reveals insights for lobbying airport owners and regulatory policy makers.  Such knowledge also ensures all activity across the company is working to the same priorities and that marketing investment isn’t wasted when something other than the brand promise is delivered.

While business aviation has to navigate around a plethora of political, regulatory and infrastructure issues, it also wrestles with the issue of perception.  For many clients, the economic climate has put cost management at the top of their agenda yet brands and communications targeting corporate accounts still ooze indulgence rather than productivity advantages.  That’s fine if the chosen target market is the luxury seeker, but a sceptical programme director overseeing an urgent M&A project will only let the team fly privately if the broader economic benefits for the business case are clear.  Therefore, getting to understand the customer and their own organisation is essential for business aviation companies who can then provide the right information that makes that business case uncontested.

Diverting finite resources for an even greater customer focus might take some persuading for metric-driven stakeholders.  The translation therefore of customer measurements such as the net promoter score (NPS) and of customers’ emotionally-driven behaviour into real money makes the case forcefully.

Medallia’s research into NPS – the popular measurement tool which asks customers how likely they are to recommend your business – shows that on average, those who are willing to be an advocate are worth 30% more than those who are not.  The Temkin Group also showed that promoters are five times more likely to repurchase than detractors.

A joint piece of research between Forrester and Watermark Consulting tracked the correlation between organisations that had a customer experience focus and their stock-market performance.  In that five-year period, the S&P 500 market index dropped by -1.5%; companies on the front foot with customer engagement increased by +22% while those dragging their feet fell by 46%.

Traits of successful FBOs and charter airlines

Somewhat unhelpfully, successful FBOs and charter airlines come in all shapes and sizes.  Some brands make a feature of being loud and brash while others go about their business quietly, but very effectively, keeping well under the radar.

The one thing they all have in common is good people.  Flat fee options, in-flight connectivity that replicates being in the office and a highly responsive service will count for nothing without the right people. They understand what the company is all about, they know what it needs to do day-in and day-out to succeed and they are energised to accomplish at least that on a daily basis.

Steve Jones, Managing Director, Marshall Aerospace said of their success: “In the last year it’s all been about accumulating a strong team and so far it has been more about building expertise than building things”

Thomas Flohr, Chairman of VistaJet which regularly has 20-25% revenue growth, bypasses the fractional model – “We tore up all the old conventions and designed a revolutionary business model focused entirely around our clients. What they wanted. What they needed. We’ve never looked back.”

And earlier this year, Rizon Jet said that its awards were due to a “Dedication to fantastic customer service….it’s not just the facility, but the people that make the difference”.

Organic business growth

Organic business growth

A further illustration of how customer service can trump price came in the AIN FBO survey – Americas 2013.  Customers were asked to cite the most important factors when choosing an FBO:  85% said good customer service, the top answer.  And the top reason for avoiding an FBO? 71% said poor customer service.

Another common factor of successful businesses is having the right customer feedback programme.  In X-Jet’s own words, “Truly we do live for that con­nection with the customers and we’re constantly seeking feedback on how we can do things better”

Lessons from other industries

Markets outside business aviation are also finding that the bar of expectation is rising all the time. As law firms are discovering to their cost, the world around them has changed and in their clients own lives they are interacting more and more effortlessly with a host of other organisations through an array of devices and channels.

Apple is a regular contender for exemplary customer service.  That’s not surprising with the focus it has on recruiting the right people for its brand, the focus it has on customer empathy rather than selling and on evoking the right emotions.

In March this year, Marriott headed the Temkin Group rankings once again for a hotel brand’s customer experience.  Like Amazon and NetFlix, they create relevant personalisation and make it easy to do business with.  They focus on the things their customer value, whether it’s helping the procurement team choose Marriott over a cheaper alternative down the street or tracking down lost luggage.

Many of these results stem from having (read: “allowing”) its people talk directly with customers.  These organisations also have strong leadership for a clear customer strategy that is shared and understood by every employee.

Conclusion

Companies in the business aviation market are not on their own in needing to articulate their real value to existing and new customers.  But for those who get it right, delivering what is valued most and what is seen as value for money, customers will reflect that they made the right decision, their organisation will benefit and they’ll tell everyone.  And that’s invaluable.

Customer Experience at the Board table: a voice, a vote or a veto?

Everyone seems agreed that, like the complaints department, in theory the real aim of an in-house customer experience team should be to do itself out of a role.

I say that because if every decision made by an organisation strikes the right balance between what its customers value and what drives the corporate value, then there is no need for anyone to champion its cause.  It’ll just happen.  It’ll just be the way things are done.

Until then however, those leading and managing the customer agenda need the skills and credibility to get people talking to each other, to demonstrate unequivocal proof that customer experience doesn’t leave money on the table and to be accountable for ensuring that the right things are being done in the right order.  Not only does that have to happen across the width of a multi-functional structure but from the very top down.

Recent corporate evolution has seen Boards grow more upright Evolution of Progressas they respond to what’s going on around them and the discovery of how interdependent the executive team is.  The finance chief, risk head and company secretary have pretty much always been at the top table; HR took its place when team-building and balanced scorecards came of age along with the decentralisation of its core services;  to keep up with Sales, the Operations and Marketing divisions then were invited in.  And more recently, general counsel – traditionally the gatekeepers at the end of the corridor – are being brought much closer in to the running of the business.

As a result, for a customer experience leader there is intense competition around the Board table for attention, time and resources.  But it is essential for that person to be able to go toe-to-toe with everyone in the senior team; not because they want to win their argument and look important but because they will genuinely have customer insights that will make the decision-making process more effective.  Of course, there will be personal agendas all around the table as individuals try to be seen exerting their influence on cash-flow.  However, predicting the commercial impact of customer behaviour based on what the corporate strategy needs can align and prioritise decisions as well as take out costs that are duplicated or that are not valued.  Absent that guidance and customer strategy, the risks and unintended consequences quickly turn into unnecessary but costly issues.

Having a voice that is heard and listened to is a great start and a large number of companies are heading down that path.  Going a step further is having a vote, helping to ensure that things are done for the right reasons and that at the very least, the real-world customer impact has been given due consideration.

But better still, is for those in charge of ‘customer experience’, whatever the size of team, to have the right of veto on decisions that affect customers directly or indirectly – for the organisation’s own long-term good.  There are few people who work right across every function and who also have the opportunity to be the one who gets them all in the same place.  Even fewer know what shutterstock_87641005it’s really like to be one of their own customers and how that affects what they do next time.  That knowledge needs to be used to its full competitive advantage.

Having a unilateral right of veto might seem a bit extreme but if we are all agreed that in an ideal world a customer experience team would not be needed, that is effectively what the organisation would evolve to do, naturally and instinctively.

The Omni-Channel Experience, shaken or stirred: right concept, wrong name?

Any time, any place anywhere – it’s the right one.  Who knew that the now decades-old yet iconic Martini ad campaign was forming the basis of what is now tagged as the Omni-channel experience.

The concept is exercising many brains right now.  We know that in an ideal world we need to give an easy, reliable and considered experience however, whenever and wherever our customers and clients demand it, whatever device they are using.  But from the people I’ve spoken to recently about the subject, the bigger question is “How?”.  It will be hard to find anyone who resists the fundamental theory behind an Omni-channel experience, but in practice how do we get the people leading divisional teams within an organisation to talk with each other and to establish practices that benefit each other, the customer and company P&L?

It may be semantics, but the label “Omni-channel” therefore seems to simply exacerbate the current problems and internal challenges rather than help overcome them.  It implies that channels can still function in the way they always have but they simply need to be joined up more effectively.

Legacy systems, behaviours and organisational structures won’t get changed overnight but for me, ticking the “Omni-channel” box is a false ending.  In part it’s because, in determining what our Omni-channel strategy should be, the use of the word “channel” still suggests that the focus is on what an organisation can do with its front-line structure and resources rather than be led by how customers want to do business.  If the latter is the starting point, working back to today’s capability will surely bring about better outcomes than the inside-out approach.

To have an effective Omni-channel strategy needs a clarity of purpose that extends beyond the channels themselves.  Customers deal with a brand as a whole and that therefore needs all the parts of an organisation, whether customer-facing or not, to function as one.

That takes strong leadership and it needs people with the right skills to influence sceptical stakeholders and adapt metric-driven scorecards. But the effort is worth it – there is a good reason why the Martini principles have endured for so long.  They are the right ones.

Jerry

 

 

The Customer Experience message; a victim of its own success?

Over 23 million variations on a theme.  At least, that’s how many links you’ve access to if you put “Definition of customer experience” into Google.   There are only 3 million more links to “Definition of humanity”.

So it’s not surprising that to engage the corporate leadership team or those of a sceptical, short-term disposition in the importance of customer experience, it needs the clarity of a flawless diamond and the long-term vision to match.  Anything less will not secure the ongoing resource and mindset needed.

I’ve seen many in-house customer experience teams who, despite best endeavours, focus nearly all their efforts on internal priorities that could, and realistically probably should, be dealt with by other teams  – ‘customer care’, ‘customer service’, ‘compliance’ and so on.  But at least they can say “We do customer experience” .Customer Experience

Much has been said about how reliant customer experience programmes are on managing emotions.  Yet influencing a room full of cross-functional  executives to change their own objectives to be based around how they make customers feel will at best be daunting, at worst a very short session.  Nonetheless, making sure that root causes of complaints are stamped out and that the commitment to service standards are being maintained are certainly the minimum any enlightened organisation should strive for.  But that’s not customer experience, that’s running a business efficiently.

So this dilution of what customer experience really means and the ability of its champions to articulate that clearly puts it – and therefore the advantages it brings – at risk of becoming a victim of its own success.   The concept of Customer Experience is nothing new, so absent an absolute recognition of how it can help individuals, teams, departments and the organisation overall, there will still be dismissive conversation barriers such as “We’ve done all right so far”, “Yeah, heard of that, everyone’s doing it” and “C’mon, it’s just a fancy name for customer service”.

If Customer Experience is to demonstrate its true value and contribution to the bottom line it needs to keep up the momentum and avoid an unconscious drift into complacency.  Those leading the charge need – more than ever – to talk the language of other business divisions, debunk myths and make it matter to every person.

For those championing the virtues and outcomes of a disciplined approach to customer experience, the challenge is to engage in a way that makes it clear that what the business does collectively today will determine what its individual customers, clients, passengers or patients will do tomorrow.   It has to be about the right experiences, the ones that work in tandem to create the best, balanced outcomes for the business and the people who buy what it sells.

Customer Experience has proved to be a great discipline and catalyst for many companies to improve their commercial performance.  But the label risks being over-used, misunderstood and not telling the full story.  It’s not about the customer experience per se – it’s about how the right experiences will make customers want to choose us again and spend more next time.

As for the search for a definitive platitude about what customer experience is, I think that misses the point.

In the same way that corporate objectives and recruitment policies are individual to an organisation, so too is Customer Experience.  It’s not a department.  It’s cultural and therefore key to what it means for them and their customer strategy.

It’s only my opinion, but without continued effort behind landing the right messages to the right people, without a clarity of purpose matched by strong leadership, the tentacles of metric-driven, short-term objectives will creep back up the pecking order and we’ll wonder why we have to search so hard for good customer experiences again.

The Circular Economy and the Customer Experience

The world is full of great ideas the size of a planet but unfortunately, that’s how most of them stay – just ideas.

For some time now though the Circular Economy has been proving itself as an exception to the rule.  This inspirational initiative is changing the future of the way manufacturers make and service companies sell.  But for their customers and clients, it also means a different way of doing business, something that history tells us must not be overlooked.  In explaining the nature of the new consumer generation, Micha Kaufman at Forbes summarised it neatly by saying “The product itself is not important, only the experience that they contain”.

The creation of the Circular Economy 100 is the latest testimony to the vision and effort that has secured the support and imagination of governments, business leaders and innovators around the world.

Led by the genuinely inspiring Dame Ellen MacArthur and her foundation team, the principles of the Circular Economy have already been adopted.  Moving beyond ‘simply’ cutting carbon emissions and recycling glass into aggregate, some notable and diverse organisations such as wear2 and Maersk Line are effectively starting from scratch; building new processes so that what they make is made to be made again;  the Cradle-to-Cradle approach.  And what are seen as product-oriented companies are looking at how they move to a service / relationship orientation by selling the benefit rather than the product – washing machines for example, where consumers pay by the cycle while the manufacturer takes responsibility for the machine’s upkeep and replacement.

To have brought an idea on this scale from conception to execution is nothing short of phenomenal.  It takes enlightened people, enlightened organisations to change the rules of thinking in a way that will generate significant commercial benefits as well as reducing the enormous and shameful waste that plagues our planet.

Inevitably however, the success or otherwise of the Circular Economy is dependent on an acceptance by clients and consumers that they too must change the way they interact.  And so at this early stage of maturity, organisations have a unique opportunity to ensure, right from the start, that what they build and how they deliver it creates intended, consistent and profitable customer experiences.

The lessons of history teach us that one of the reasons why there is so much focus on customer experience today is because organisations are trying to force-fit new demands on top of old-style business models.  Markets are littered with examples of operational processes that were built for efficiency but that lack the flexibility and personalisation their customers expect.

So much time and effort is being spent investigating root causes of complaints, customer contacts that go under the spreadsheet heading of “failure demand” and simply the need to get the basics right.  And for others, it’s worse.  The focus is way out on the horizon to the extent that the rocks under their feet go unnoticed.  I’d much rather an airline communicate with me when there’s a delay than spend time and money developing an app that just tells me my bags are on the same flight.

Organisations would normally relish the chance to start with a relatively blank piece of paper and design around the customer but they may not have the resources or (yet) the appetite.   In the search for commercial sustainability and market differentiation however, the advent of the Circular Economy is a fantastic opportunity for those businesses who can, to think beyond the implications for its own processes and to genuinely build around what it will be like to be a customer. How will what they do make their clients feel and behave next time? What will their customers say to their family and friends over dinner tonight about what it’s been like to do business with them? And how can they use those experiences to generate more, high value customers?

The circular economy is about the huge economic, commercial and environmental benefits from making things now that can be remade later. But while the focus is understandably about innovation and operational processes, that effort will risk being wasted without the understanding and then the execution of the right customer experiences as an integral element of the design process.

It’s an exciting future but it also has to pay attention to the detail of the end-user experience, lest we go round in circles again.

Customer Experience surveys, metrics and a question of confidence

Far too often we see that organisations have a heavy, sometimes over-reliance on metric-based surveys.  In a way it’s understandable;  partly it’s about feeding the target-driven performance culture and partly it’s to have as much information as we can at our fingertips because that, in theory, makes strategic decision-making more robust.

So it was intriguing to read the latest headline about the rising confidence levels of UK businesses.  The UK Business Confidence Monitor index “stands at +16.7, up from +12.8 in Q1 2013, suggesting GDP will grow by 0.6% in Q2 2013”.

I wish to take nothing away from its credibility, accuracy and the expertise of those who know much more about economics than I, but it means, er, what exactly? Well, delve a bit deeper and the trend is confidently portrayed as being a proxy for future economic growth, of higher levels of borrowing and investment.   I’m no Smith, Keynes or Friedman but on the face of it that sounds like good news despite the fact that we may also conclude that the appetite to take on more debt is weak and fragile customer demand is still a problem.

Armed with just that though, if I was to present to the Board of UK plc, I’d fully expect them to say “And just what is it that you want us to do next?”.

It’s often the same when it comes to finding out what it’s really like to be a customer or client.  In the Business Confidence Monitor, the question that respondents are answering is “Overall, how would you describe your confidence in the economic prospects facing your business over the next 12 months, compared to the previous 12 months?”.   In consumer and employee surveys the equivalent questions might be “How likely are you to recommend us?”, “How do you rate our service” and “How satisfied are you?”.

All good questions in their own right, and also trying to predict future behaviour.  But while metrics will show a trend, on their own they don’t show why the trend is what it is, and therefore what it is likely to be in the coming weeks, months and years.  What’s more, depending on sample sizes and other mechanics of the survey, the reliability of the numbers comes with its own confidence factor of plus or minus x%.

Absent clear comments as to why respondents gave the reasons they did, there is a vacuum of context.  That means, as with so many metric-based surveys, that translating the information into knowledge upon which valuable decisions can be made still remains elusive.

I’ve always said that if organisations get the experience right first, the metrics will look after themselves.  Base analyses and decisions on the numbers alone and without any context, trends will simply continue to happen whether they’re known to be the right ones or not.

In that, I have every confidence.

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Thank you for your interest and for your time reading this blog.  I’m Jerry Angrave and I provide Customer Experience research and advisory services, most recently to the aviation, transport and legal services sectors.  If you’ve any comments or questions, do let me know, either through the blog, by email to [email protected] or feel free to call me on +44 (0) 7917 718 072.  There’s also more information at www.empathyce.com.

Do we, and banks themselves, have the appetite to change current accounts?

The Post Office announced today that it is to launch a current account into the UK market, supplied by Bank of Ireland.  It will therefore go some way to allaying the Office of Fair Trading’s fears that because 75% of the market is sewn up by just four banks – Lloyds, RBS, Barclays and HSBC – the restricted choice is not good for competition.  post office atmBut, what will customers make of it?

Current accounts are notoriously sticky, perpetuated by the perceptions of how difficult it is to change and lack of differentiation.  Research by JD Power says that switching is more likely to be triggered by a change in a customer’s circumstances such as a new job, marriage or moving home, than by the attraction of special fees or by suffering bad service.  So it’s no surprise that, according to MoneySupermarket, eight out of ten people have no plans to change in the next 12 months.

So is another current account the answer?  Is the reason why there’s so little switching because it’s the “Same old same-old” rather than a different new?

To paraphrase Bill Gates, we don’t need banks or even bank accounts.  Rather, we need an easy, efficient way of allowing us to exchange money for goods.  Earlier this year, the Payments Council reported that over 90% of our transactions are for a value of under £25, making the adoption of contactless payment technology ever more attractive.

With a branch footprint that is larger than all other banks combined, the Post Office sees that as an opportunity to go back to more personalised, community banking.  But time will tell whether it’s a reliable point of differentiation in today’s channel-agnostic world.

A quick look at a recent survey by Which? on how bank accounts are rated shows that three of the top four – First Direct, Smile and the One Account – do not have a high street presence.  Tellingly, the fourth, the Co-Operative Bank, is not one of the ‘big four’ either.

At the other end of the scale, reaffirming that price is not the be-all and end-all, Santander scored the lowest despite having the highest interest rate on credit balances.  So the challenge, for customers to decide if they should switch and for providers to offer the right value, is not insignificant.

But that may be changing.  Choice is growing and with it the opportunity for new entrants to clear away the complexities of fee charging structures, to start with new technology that gets the basics right every time and to position themselves to take full advantage of the more stringent switching mandates coming into effect later this year.  The energetic Metro Bank is opening new branches and getting good reviews from its customers and – literally – their dogs too.  The purchase by the Co-Operative Bank from Lloyds Banking Group of a ready-to-go operation made up of customers, accounts, staff and branches is also drifting to a conclusion.

And two others to watch.  In the background, the shy but highly effective Handelsbanken.  With 150 locally-focused branches, a decentralised decision-making philosophy and a belief that banking is about customers and not products, the Swedish bank has quietly created greater, genuine loyalty among its customers, a stronger reputation in the markets and a higher average profitability than its competitors.

In the United States, Simple has created an invitation-only banking proposition that is making a few C-Suite Executives sit up and take notice.  Being purely technology-based doesn’t create lasting differentiation but its attitude is hard to replicate by established banks.  There are no fees, the revenue is generated by the spread between asset and liability pricing.  Their call centres are very light on scripting, encouraging conversations rather than transactions – humanising the experience again.  Their debit cards arrive presented as a gift, not tucked inside an A4 tri-fold covered in barcodes.

Meanwhile, back in the UK, current account providers are seeing the revenue generated from an active account reducing.  The OFT calculates a fall from £152 per account in 2008 to £139 in 2012.  So what’s the appeal for those wanting to play?  The real opportunity lies in the ability to use the account as a foundation for deepening the relationship, otherwise known as “selling more products”.

That’s where the likes of the Post Office may be able to grab an advantage;  to make the most of their face-to-face interactions, building trust and empathy that do lead to additional sales and revenue, just in a less adversarial way.  One of the biggest gripes about banks is that every time we are in touch with them, it seems they are always in a rush trying to sell us something.  It’s probably not without reason either.  Highly complex algorithms have been trawling through vast data warehouses as they carry out their propensity modelling.  In a thirst to meet balanced scorecard objectives, they generate more sales leads than the front-line can handle.

Current Accounts - how will they evolve?

The writing on the wall for current accounts: how, will they evolve?

What that looks like to a customer is, hopefully, what the new entrants can avoid.  It’s ok to get what’s labelled as a customer service call saying “I’m just ringing to check that everything’s ok?”.  But when it’s followed by “Ah, sorry to hear the kids are playing up right now, but would a personal loan be useful so you can all go on holiday?” that’s not very helpful.  What’s worse, is when I say “Actually, yes, I want to talk about that duplicated direct debit last month, which no-one has contacted me about” and I’m told I have to call someone else about that.

Evidence suggests that most providers are still heavily reliant on looking to transactional current accounts in order to create relationships.  More of the same isn’t really a sharp enough stick with which to poke ambivalent and inert customers into switching.  But for some, innovation based on having an absolute understanding of what it’s really like to be a customer and what they are looking for will see them evolve from same-old to different-new before their competitors.

And when banks change their current account, that is when we’ll change our current account too.