Posts

Would changing the name from Customer Experience to Customer Memories make us better prepared?

We have Customer Service;  it’s what companies do to or for their customers.  We have Customer Experience;  you could say it’s what it’s really like to be on the receiving end of the service.  Done the right way though, understanding all that gives us powerful information.

Yet there is also a risk that our focus on the here-and-now can give us a distorted view of the very thing we’re trying to improve;  the likelihood of our best customers coming back, spending more and telling everyone else to do the same.

When we’re about to buy something, it’s basic human behaviour to recall what it was like last time and then to decide whether or not we go ahead or go somewhere else.  We dip into our memory bank to make the right decision, based on what happened back then and what we’ve heard and learnt since then.

But as far as organisations are concerned, I’ve seen that over the last few years the focus has been increasingly on the experience or service that is given to a customer today, more so than the impact that last experience has when it comes to the next purchase.  There are subtle, but important, differences.106

The point is, when we’re about to choose, use, buy or sign-up, it’s our memory that will determine whether we stay “loyal” or we try elsewhere.  Customer advocacy has its place, don’t get me wrong.  But while the wow factors were front of mind when I did that customer survey the day after I last had anything to do with the company, twelve months on I might have a stronger recall of the lacklustre service I’ve had since.

The term “Customer Experience” has served markets very well in raising the bar of how businesses treat their customers.  But internally, organisations have struggled and still do so today with what Customer Experience is.  Is it a new fluffy label from Marketing for what everyone knows as Customer Service?  Or a strategic way of thinking? Absent any real customer-based, cross-functional objectives “We do that already” is a common riposte, along with “It’s too expensive” and “Where’s the benefit?”.

Every organisation has a customer experience whether they know it or not and that may be one of the reasons why it doesn’t get the attention internally that it deserves.  Giving a jolt to the system and talking about influencing Customer Memories demands a different perspective; the future poking a stick at the past.  It’s like asking “What can we do that will increase the chances of you buying again?” instead of “What should we have done that would have prevented you from being really hacked off?”.  A story about horses, gates and bolting comes to mind.

Arguably, the higher the value of the purchase the less frequently we buy and therefore by definition, the time between one purchase and the next can be significant.  I’m no psychologist, but even if it’s a more regular or ad-hoc purchase I know our memories and perceptions change over time.  I might have had a hassle-free experience and at the time was a real fan, but if I’ve since heard other stories or there’s been a change in my circumstances, my attitude or needs may be completely different.  That customer feedback I gave last time is no longer relevant but unless the company asks me again just before I choose next time, they will be acting on the wrong information.

Whether we’re renewing an annual contract, buying a holiday, a car, clothes or using professional services, at that specific point in time the thing that determines what we do next is what our memory tells it was like last time;  not how likely we were to recommend the company to someone else one day after we last did the same thing.

In the name of Customer Experience, organisations understandably have an insatiable appetite to canvas opinions within days, minutes or even as it happens.  That information is used as a proxy for brand strength and to forecast the likelihood of repurchases.  But if that repurchase is weeks, months even years away, how accurate can it be?  It’s obviously easier to ask a customer how it was just after they’ve been in touch as there is a definitive trigger point for feedback.   Just because the timing of the next interaction is harder to predict though, that shouldn’t stop us seeking such valuable information.

It seems to make sense then that we should, in addition or as an alternative, track what a customer feels and thinks much closer to the point at which they make their next decision.  We would still keep the metric-obsessed folk happy with a quantitative score in answer to a question such as “Based on what you remember about last time, are you likely / not sure / unlikely to use us next time?”.

Importantly though, we would also still get the gilt-edged qualitative information about what can be reinforced at that pre-purchase point in time and not afterwards when it might be too late.  And it would still be the case that if we get the experience right, the metrics will look after themselves, not the other way around.

It’s great to see customer strategy and customer experience being discussed in the Board Room.  In the main however, there is still a focus on what customers say just after purchase or the “experience”.  By the time the customer is in a position to make a choice next time, the things that drive that new decision may be very different and are purely in the memory.

And I for one would give ten out of ten for tapping into that.

 

Whose role is it anyway? The organisational side of Customer Experience

The philosophy behind customer experience has been around since cavemen first traded a club for a spear.  It was simple then, as it is now.  If you didn’t like who you were buying from or you felt they were getting more out of it than you, you’d probably get your own back by inventing the wheel or going to see who’s in the next valley.

Maybe because we’re better at evolution than revolution, many organisations today are shoe-horning that basic concept of customer experience into an existing model.  And while there are companies who regularly get a mention for making us feel good about doing business with them, many more have reinvented that wheel only to have it spinning, making very slow – if any – progress.

There are generally three types of organisational approach to tackling customer experience;  add the responsibility to an existing team, create a new team or have a culture where everybody is accountable.   The benefits of customer experience are buried beneath a duvet of repeated platitudes so I won’t cover those here, but the unintended pitfalls of each are worth a quick look.

Add customer experience to an existing team

Done in the right way it can be highly motivating to be asked to take on more responsibility, especially if it’s to lead and manage something like the customer agenda.  A bigger challenge but a bigger profile too.  Usually, it will be complementary to the role that team already carries out – Marketing, Customer Service or Complaints for example.

But rarely will the existing responsibilities be pegged back and often the measures by which performance will be judged are an extension of what the objectives are already.  The consequence is that while the ambition is there, the reality is that the day-job still takes priority.  At best, the specific skills and way of thinking that are needed to run a customer experience programme evolve from what is there already.  At worst, the team gets a pasting in their performance review because what the CEO expected isn’t delivered.  Rather like their customers’ experiences.

Create a new customer experience team

Surely the watertight answer?  Not always.  For the individuals involved, being part of a new team is exciting in its own right.  Being part of an organisation that is putting its money where its mouth is, even better.  It’s a great opportunity and if – and that’s a big if – the top-level sponsorship is visible and solid, the opportunity to influence others to do the right thing is inspiring.

Yet teams can easily become a victim of their own success if they let it.  The creation of a bespoke go-to resource that is going to lead the customer experience charge carries an inherent danger that others think they are absolved of the responsibility.  That mind-set is exaggerated if performance measures across the organisation don’t change to be in sync either.

Without the right leadership and engagement of peers, the team quickly finds they are picking up everything and anything to do with “customer” on behalf of the business.  They get to handle complaints, they run customer service weeks, they monitor and report on compliance outcomes and they get drawn in to police programmes and projects.

Individuals who are given the customer experience roles from other parts of the business often remain task-oriented, keen to impress and be busy.  So will they have the inclination, confidence or authority to learn specific customer experience skills? To follow what is being said about them and their competitors in social media and to develop reciprocal relationships with internal and external partners based on mutual understandings?  Or will they settle for linear process maps rather customer journeys?  Report to their boss that the call-centre manager won’t carry out a quick survey at the end of calls because it adds to the average handling time metrics?

Strong governance, inclusive of every part of the business from reception desk to board table is the key.  Working to the same priorities that everyone else is, knowing what the latest brand campaign is all about, understanding each other’s challenges – it’s nothing new but its effective adoption by many ranks naively low on the corporate ‘to-do’ list.

Have the right culture

The good news is that whether they know it or not, every organisation already has a customer culture.   The bad news is that it’s not always the right one.  Even worse, some are unable to articulate which it is, good or bad.

In the same way that we shouldn’t need complaints departments, a well-led customer experience department should do itself out of a job.  It’s not a function, it’s a way of thinking and a strategic tool that makes the business more efficient;  driving out duplicated and superfluous costs and focusing resources of the things that matter most to the health of the company and repeat business from more of the most valuable customers.

Delivering on the strategic plan, whether it’s to stabilise, grow or transform a business takes much more than a poster on the wall that proclaims “We put customers at the heart of everything we do!”.

What does the right customer culture look like?  That is up to you, your brand and your leadership style.  But as they say, what’s on the inside gets reflected on the outside.

If your people have little understanding of what the business is doing and why, if they are applauded for following processes rather than doing what’s right for the customer and if they talk about their competitors more than their own brand, then maybe the time is right to step outside.

Join the others looking in, see what they see and do something about it – before they head off to the next valley.

B2B or B2C, it’s all P2P to me

In an age of big data and a seemingly endless capacity to produce and absorb information, one could be forgiven for believing that the end of the TLA, the three-letter acronym, is nigh.  It should be, particularly for the subject of this piece, but for different reasons.

Popping up everywhere in emails and presentations, these TLAs quench our thirst to save time and effort by cutting short the unnecessary detail.  And while they have a place, the complacency of their continued existence with no challenge as to what they are shorthand for, hides humbling messages for those leading customer agendas.

In following the well-trodden path of segmentation protocol, the terms B2C and B2B have been adopted to help define target audiences and brand positioning.  Fair enough.  You might want Mrs Angrave to renew her mobile phone contract with you or you might be providing the software to the mobile phone company to facilitate said renewal.

By definition though, segmentation is built on a specific set of needs and therefore must change too if the needs of that segment change.

Yet despite everyone saying the world is changing in front of our eyes, our beloved segmentation model of B2B and B2C is cast in reinforced concrete – and therefore, worryingly, so too can be our thinking.

The biggest of these changes is, ironically, simply the re-emergence of something we’ve known for years;  that people buy from people.  And while that has been the guiding light in the B2C world, the same should apply in the B2B sector.

Take but one classic B2B example.  A law firm pitching their services to an industrial giant might focus on having been in business for 100 years, having 200 highly qualified lawyers to call on and having the flexibility (depending on how you look at it) to bill by the hour.

The general counsel on the receiving end of that spiel though is a real person, having their own real-life experiences and interactions.  Their favourite restaurant makes them feel welcome, nothing is too much trouble.  Last week on the anniversary of moving house, they had a pleasant surprise when their estate agent sent a new battery for the smoke alarm.  And, using a tablet on the train into work today, they sorted out a problem with their online banking, wrote several emails and booked a table at that restaurant, again.

The point is, although they work for a huge business, they are nonetheless consumers themselves who live in the real world.  That is where their benchmarking will stem from. So going back to that law firm pitch, the number of years in business and the number of partners is largely irrelevant.  Would that turn a consumer’s head if it were the USP (there we go again) plastered on the window of a high street store?  I think not.

It’s about relevancy.  Imagine that when the GC got home last night, a local locksmith had to be called out to fix a jammed lock.  So today, why wouldn’t they expect a law firm to be at least as responsive.  The pitch is to a person, not the robotic facade of an organisation.

They are putting their personal reputation on the line by hiring us so they will want confidence that the right people are there to do the job, that whoever does the pitch remains the main contact and that the law firm will spend time (and not charge for it) to really understand them and their issues.  And the less we say about billable hours the better.

It’s important because they are the ones who need convincing we are going to do a great job for them.  If they are not fully on board, they are hardly going to be in a position to win-over the procurement team, let alone the CEO.

Sticking with a B2B mindset then, carries a potentially critical flaw.  I therefore suggest we all ditch the acronym B2B and replace it with P2P – people to people.

In fact, I’d strongly advocate we go one stage further.  It shouldn’t matter who the customer is, simply drop the acronyms and instead focus on building the right buyer experiences around what’s important to them and what’s important to your business.

Until next time, TTFN.

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…

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.

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.

_______

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.

Remove unintended barriers to the intended email Customer Experience.

It’s an inconvenient truth that in promoting the use of email as a contact method, it is surprisingly easy to leave the wrong message.

I’m not talking about the content here, there’s plenty of focus on that.  The issue is about the realities of the customer experience when there has been a lack of thought given to the subject heading and the email address itself.

We wouldn’t set out to create an intentional experience that deliberately stops customers from being able to get in touch with us.  Not least, we wouldn’t want to be the one having to explain it to the Board.  And worse, it’s an uncomfortable conversation to have to justify it to a customer who is trying to turn to us for help.

Surely that doesn’t happen in today’s hyper-competitive, customer-hugging commercial world?  But it does, very much so, and in the process undermines all the good work created by the brand investment, employee engagement programmes and those posters on the wall proclaiming “We put customers at the heart of everything we do” (whatever that means..).

Here are three examples of where it can go wrong.  To give them context, the first one has a customer’s perspective providing the commentary:

I’ve had an email from “DoNotReply” – how do I get in touch?

Bought my tickets online. It all went well, it was easy and the people were friendly. But in the confirmation email I had there were a couple of things that weren’t quite clear and so I wanted to check some of the details. Problem was, it was from [email protected]— so I wasn’t sure what to do. There was no other way of contacting them apart from links to “Subscribe to our newsletter”, “You might also be interested in these services” and so on.  I’ve never had a good experience with their call centre either.

I went back to the company website and looked for the “Contact Us” page but knew I’d have to explain all the information again. Turns out it wasn’t a freephone number so I sent a message using one of those forms. All I’ve had back is a note saying I’m a valued customer and they’ll get back to me in three working days. I’m still waiting.

If they can send me an email, why do they make it so hard to reply to it?

 

And the point is?

Stopping people replying to automated messages might seem like an operational efficiency but there’s going to be a greater cost in, at best, handling the additional enquiry or at worst, losing the business next time. To get an email from DoNotReply isn’t very friendly language. You’re effectively saying ‘Hey you. Don’t even think about replying. Ha. We’ve got your money so we’re off trying to seduce more new customers like you”.

Either put in place a mechanism for routing emails that do come in or provide an obvious and easy alternative. By their nature, automatically generated messages that fit a template are more likely to generate enquiries from customers whose lives are not governed by templates.

You get the drift. The second and third points follow in the same vein so I’ll rattle through them.

Dear “Info”, who are you, really?
When our customers or clients put the effort in and choose to go to our website, ideally we want them to get in touch. That’s why we have a Contact Us page. How many times have we read that we only have one chance to make a first impression; that it’s the first seven seconds where people make up their minds about us?

So it seems at odds with that if the first contact we offer them is a highly impersonal [email protected]— or [email protected]—. It can also be at odds with what the brand promises everywhere else on the site about being customer-focused. Whether your customers are buying a book or chartering a luxury business jet, it’s got to be reassuring for the customer to think they are sending a message to a real person. Simply changing “[email protected]” to, say, “[email protected]” makes it so much more engaging.

I know you’re here somewhere…
Linked to the two I’ve mentioned, this one’s about customers being able to find your emails later.

Chances are that during the life of your relationship a customer will want to get in touch. And if they’ve got an account number, membership reference, a password reminder or simply want your email address, it’s very likely they’ll look up an old email from you. We all do it, and the first thing we’re likely to do is to sort our inbox messages by sender.

However, the name of the company is often elusive. Instead, we have many messages from “Customer Services”, “Info”, “NoReply” to name but three very generic addresses. We want it to be easy for people to get in touch with us and we don’t want to give them a reason to give up searching or risk going elsewhere. It’s therefore well worth thinking about using an appropriate name that will appear in the customers inbox where they expect it to.

You may have all these and more covered, in which case that’s great. But if there’s any doubt, check it out. It won’t take long and if it starts a conversation between you and your colleagues about what needs fixing and how, that’s got to be better than the alternative “Please explain” conversation around the Board table.

Interested to hear your views, thank you.

Jerry

———
Jerry Angrave
Managing Director, Empathyce Customer Experience
www.empathyce.com | [email protected]
+44 (0) 7917 718 072