Banking’s Most Important Currency: Customer Trust

Banking’s Most Important Currency:
Customer Trust
April 1, 2014
COPYRIGHT ©.2014. ALL RIGHTS PROTECTED AND RESERVED.

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Today’s Speakers
COPYRIGHT ©.2014. ALL RIGHTS PROTECTED AND RESERVED
Elizabeth Glagowski
Editor-in-Chief
Customer Strategist Journal
Don Peppers
Founding Partner
Peppers & Rogers Group
Weston McDonald
Head of Financial Services
TeleTech

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Agenda
Disruption is the new reality
Why trust matters to
great customer experiences
5 key drivers of customer trust
in banking
Attendee Q&A

5

6

7

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The business model is being massively disrupted
• 60% of checking accounts likely to
become unprofitable soon
• 35% of customers already buy
significant services from a competitor
• Non-bank competitors and new
technologies make it easy to switch

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% of customers leaving their current bank to
do business with competitors…
Traditional Products
CDs, Money Market, etc.
34%

10
Credit Cards
53%

11
Automotive Loans
68%

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Brokerage Accounts
and products
82%

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Non-traditional new entrants are also stealing
share of customer
Online Only
Source: Forbes Banks could lose 35% share by 2020 report

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share of customer
Financial Management Hybrids

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share of customer
Payment Centric Technologies

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share of customer
Big Box Retail Entrants

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Disjointed interactions and product silos drive
customers away…
56% of all customer
journey episodes are
multitouch and
multichannel…
Personalized
treatment is
still maturing
Source: Ovum Business Trends 2013, J.D. Power and Associates 2012 U.S. Retail Banking Satisfaction Stud 24/7
…but 80% of
banking interactions
don’t retain the data
from the last
interaction!
71% of
channel cross-over
events
need information
that has already
been given
Customer
support is still
driven by
product silos

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…But good customer experiences do drive
growth
The likelihood that a customer will open new accounts and purchase
additional products/services…
A good web
experience increases
likelihood by
11 times
A good contact center
experience increases
likelihood by
14 times
Source: 2013 Gallup Bank Customer Engagement Study

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Why Trust Matters
to Great Customer Experiences

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What exactly is a “good” customer
experience?
In a word:

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Friction reduces loyalty and cross-selling
Customer loyalty is not highly correlated
with a superior customer experience…
…but customer dis-loyalty is highly
correlated with a poor customer
experience!

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Likelihood to tell friends about a good or bad
customer experience:
Product experience
Customer service
experience
Source: The Effortless Customer Experience, 2014
Bad news for financial services!

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Moore’s Law
Every 20 years, computers get a
thousand times faster and cheaper.

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Zuckerberg’s Law
Every 20 years, we interact a
thousand times more with others!

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The more we interact, the
more trust we demand
Trust makes interactions more efficient
Interaction generates transparency

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Extreme trust
In the e-social world it’s no longer enough simply to
refrain from cheating or deceiving customers
“Trustability”
Proactive trustworthiness

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Extreme trust
Extreme trust requires a company to
proactively watch out for its customers

Trust reduces friction…
…and customer engagement
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generates trust
Extreme trust

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Customer engagement leaders outperform
customer engagement laggards
Total Shareholder Return 2007-2012
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
S&P 500
Index
Leaders
outperform
laggards by
77%
Customer
Experience
Laggards
-34%
14.5%
+43%
Customer
Experience
Leaders

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Higher NPS scores drive higher revenue growth
-10.9%
-4.7%
0.0%
2.2%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
6.5%
7.9%
8.9%
10.7%
11.8%
16.0%
28.3% 28.8%
50
40
30
20
10
0
-10
-20
-15%
Net Promoter Score
2011-2012 Revenue Growth
Revenue Growth 2013 NPS Score Linear (2013 NPS Score)

Five Key Drivers of
Customer Trust in Banking
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Every interaction should improve customer trust
• Knows the Customer
• Removes Friction
• Resolves Problems
…this creates
trust, which…
• Eliminates Surprises
• Protects the Customer
• Increases Asset Growth
• Captures More Share
of Wallet
• Grows Customer LTV
• Reduces Costs to Serve
• Breaks Down Product
and Service Silos
• Increases CSAT/NPS
When a bank:

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Five key drivers of customer trust in banking
Know the
Customer
Remove
Friction
 Not having to repeat information already given
 Knowing the banking relationships (family, businesses)
 Keeping information accurate
 Knowing channel preferences
 Knowing the customer “persona” – e.g., customer needs
 Keeping in touch with life events and customer episodes
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
Remove
Friction
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
Remove
Friction
 Intelligently connecting the customer to the right
answer or resource the first time
 Making contact and engagement easy
 Seamless communication and transition between
channels and product silos
 Eliminating waste from the value chain and
processes
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
Remove
Friction
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
 First Contact Resolution
 Technology to facilitate outcomes
 Associates empowered to take actions
 Segment-based associate training and insight
 Intelligent Web Self Help
 Connected and harmonized multichannel engagement
 Social knowledge management
 Problem feedback to drive continuous improvement
Eliminate
Surprises
Protect
the
Customer
Resolve
Problems
Remove
Friction

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Know the
Customer
Eliminate
Surprises
Protect
the
Customer
Resolve
Problems
Remove
Friction

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Know the
Customer
Remove
Friction
 Keeping promises and managing expectation
inflation
 Communicating difficult scenarios – fees, pricing,
regulatory changes
 Proactive outreach
 Triggering communications in key processes
 Card application, replacement
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
Remove
Friction
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
Remove
Friction
 Associates who are advisors and advocates – e.g.,
not selling the customer products they do not need
 Always acting in the customer’s best interest
 Professional treatment and recognition
 Communicating to the customer according to that
customer’s persona
 “Fair play” – proactively making things right
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Know the
Customer
Remove
Friction
Resolve
Problems
Eliminate
Surprises
Protect
the
Customer

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Poll question
Which of the 5 key drivers is the biggest opportunity
for improvement at your company?
1. Knowing the customer
2. Removing friction
3. Resolving problems
4. Eliminating surprises
5. Protecting the customer

Making Customer Trust
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a Reality

Building Breakthrough Customer Experience
Strategy
• Segment Treatment Plans
• Multichannel
• Segment Based Investment Allocation
• Predictive Modeling
• Acquisition
• Cross-Sell/Up-sell
• Churn
• Align Corporate and Customer Metrics
Business Design
Deployment
©2014 TeleTech Holdings, Inc. Confidential and Proprietary 45
Insights
• Customer Segmentation
• Customer Lifetime Value (Current and Potential)
• Needs and Wants
• NPS and Voice of the Customer
• Demographics
• Customer Metrics
1 2
3
6
5 4
• Business Process Redesign
• Contact Center Optimization
• Data Architecture
• Enabling Technology
• Multi-Channel Communication
• CRM & Social Knowledge
• Systems Integration
• Organizational Design
Measure & Refine
• On-going analytic model updates
• Enterprise Metrics
• Customer Metrics (e.g., NPS)
Manage
• Care Professionals
• Technical Support
• Multiple Geographies & Languages
• Licensed Associates
• Pilot Test
• Measurement and Iterative A/B Testing
• Refinement and Roll out

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We’re just getting started
Stay engaged with us:
• Download “Restoring Trust in Banking” PDF
• One-day trust assessment workshop
Email Liz at eglagowski@1to1.com for more
info
• Subscribe to the Customer Strategist Journal
http://bit.ly/CSjournal

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Q&A Session
Elizabeth Glagowski
Editor-in-Chief
Customer Strategist Journal
eglagowski@1to1.com
Don Peppers
Founding Partner
Peppers & Rogers Group
dpeppers@1to1.com
Weston McDonald
Head of Financial Services
TeleTech
westonmcdonald@teletech.com

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