For many years financial institutions and other organisations have focused their customer relationship management (CRM) efforts on obtaining a “single view of the customer” and improving customer communications channels.
By obtaining that “single view”, institutions believe that they can better understand what the customer’s wants and needs, which will improve their ability to retain and grow the customer – ie sell him and her additional products.
In effect, despite claims to being ‘client centric’, CRM generally has been largely product and technology focused.
Now, according to Rogan Davies, head of Financial Services at The IQ Business Group, organisations are beginning to realize that knowing what the customer wants and needs won’t necessarily translate into a sale – nor will it automatically improve their ability to retain that customer.
Davies says it’s the experience a customer has with an organisation that is the primary influencer of future behaviour.
“The best way to engender customer loyalty is to ensure that the customer’s experience when dealing with the organisation is consistently enjoyable,” he says.
Customers who experience poor service from a provider – be it a bank, insurance company, cellular network operator or retailer – will be reluctant to utilise more of their products and services. They certainly won’t recommend the company to their friends, family and acquaintances and they could well take their custom elsewhere based on world-of-mouth recommendations of the organisation’s competitors.
“That’s why CRM needs to be supported by Customer Experience Management (CEM),” Davies explains. “A customer’s experience across all channels and customer touch points needs to be consistent and aligned with expectations.
“A major deficiency of many CRM initiatives is that they focus on only one channel or touch point – such as the contact centre. While it is certainly important that a customer’s calls are answered quickly and efficiently, the fact is that the call centre is merely the front-end to a host of concurrent and interdependent decisions, departments and processes that support, or undermine, each customer experience.”
Organisations are therefore starting to measure and map the pleasantness (or otherwise) of each customer experience so that they can identify those areas in a process – such as obtaining a cellphone contract, purchasing furniture or applying for a credit card – that deliver a less than pleasant experience.
They can then map these to the back-end process that support this transaction and then focus their efforts on fixing poor client experience areas.
Take the experience a customer could go through to obtain a bank credit card as an example: Thanks to its efficient CRM system, a bank is aware that an existing or potential customer does not have a credit card. The customer is invited to apply for one. The experience of applying for the card – a conversation with an efficient, friendly call centre-based sales agent – is highly enjoyable and the customer’s expectations are raised.
However the length of time taken for application to be approved annoys the customer who grumbles that because that the bank approached him, the delay is unwarranted.
Eventually, the customer is slightly mollified when informed that his application has been approved. His expectation for a speedy and pleasant resolution to the transaction is raised.
But, again, there’s a delay in actually delivering the card to the customer and this infuriates him. By the time he receives it, the customer is wondering whether he should have bothered to apply for the card at all. After all, his friend received his credit card from a competitive bank in a fraction of the time.
“While this transaction could be labelled successful from a traditional CRM perspective – a product was sold to a customer – it did not engender customer loyalty,” Davies says.
He points out that the unpleasant experience endured by the customer in this example – which is based on a real CEM project undertaken by IQ – had little to do with what are traditionally regarded as customer touch points.
“A complete customer experience is influenced by many factors and great customer experiences don't happen by accident. They require a keen attention to detail, the identification of every customer impact point and the underlying processes and departments that support these.
“These processes should be analysed from the customer perspective, enabling the organisation to prioritise and correct those processes that require the most urgent attention first,” he adds.