Banks: CXEvolution From a Customer Experience Perspective

Banks have been focusing on the customer experience for more than 20 years.  So, one has to ask “How far have banks come?”  One way to answer this question is to look through the lens of CXEvolution.  The CXEvolution framework gives bankers the ability to gauge how well their organization is delivering on the Customer Experience and what needs to be done to improve and move up the evolutionary scale.  Although each bank charts its own course, clear patterns have emerged over time that allow us tell an evolutionary story.

Banks began exploring and evaluating the customer experience in earnest in the early 1990’s when some forward-looking retail line of business executives realized customer satisfaction could be important to retaining customers.  This school of thought emerged as banks became deregulated and increasingly began to think of themselves as retailers.  Banks began placing more emphasis on marketing as competition for customers became more intense and management quickly realized that retaining customers and nurturing them to maturity was less expensive and more profitable than acquiring new customers.  Until then, banks pretty much relied on anecdotal feedback from branch employees and customer comment cards for the “voice of the customer.”  As reliable branch level measurement programs took hold and executives focused on scores, management began asking a host of logical questions.  Among them:

• What do these number mean? What is a “good” score?
• What actions should we take to improve satisfaction?
• How do we spread the word through the organization?
• Can we use this information to repair relationships and save customers?
• How do we compare to the competition?
• What is the impact of customer satisfaction on the bottom line?
• Is satisfaction enough, how do we create loyal customers?

These questions triggered a wide range of activity, from using advanced analytics to identify key satisfaction drivers and build loyalty models to the development of computerized reporting systems and the creation of teams focusing on various aspects of the customer experience.

How far have banks evolved and where do they stand now?  As shown on the CXEvolution Maturity Curve below, I believe most national/regional banks have reached the Respond level, with many achieving Standardize and some adopting characteristics of Solve level firms.

In reaching the Respond level, the banks have:

• Established a consistent, reliable CX measurement program characteristic of the Measure stage. These firms typically have a well-defined measurement program combining relationship-oriented and transaction studies designed to understand the experience holistically, with a specific focus on key touch points, products, and moments of truth.
• Implemented technology-based reporting systems to share customer experience information throughout the organization.
• Formed teams within the lines of business to: 1) create and document customer service processes; and 2) teach frontline employees to understand and use customer feedback to improve their customer service.
• Established “hot alert” case management systems enabling employees to reach out to customers who have experienced problems to resolve the problems and engender customer goodwill.
• Integrated customer satisfaction and loyalty metrics into employee performance goals.

Further, many banks have reached the Standardize level and are moving into the Solve stage by:

• Naming a “Chief Customer Officer” and/or creating a customer experience team charged with developing a coordinated, seamless customer experience.
• Integrating customer experience information from across the organization to enable management to understand customers holistically and identify root causes of customer experience challenges.
• Looking beyond customer experience scores and using advanced analytics to develop a broad array of metrics including Key Performance Indicators and incentives for reaching customer goals.
• Establishing cross-functional teams responsible for developing solutions to resolve root causes underlying customer experience issues and to overcome obstacles inhibiting the development of the customer experience.
• Linking customer experience measures and business outcomes to provide focus for allocating resources.

So, where do banks go next and how do they continue to evolve?  First of all, one critical element appears to be in place — bank executives are committed to the customer experience.  Banks are increasingly placing the customer at the center of their strategies even as they operate in the more challenging regulatory environment stemming from the financial crisis.  Meanwhile, customers are demanding more from their banks.  As they continue to adopt mobile technology, customers are seeking a consistent, seamless experience no matter how, when, or where they interact with their bank.  Therefore, it is becoming increasingly important that banks understand and manage the customer experience holistically.

Customer Experience software technology such as the MaritzCX platform brings customer information from a variety of sources into a single system, allowing employees to view customer experience performance results, manage “hot alert” cases, and develop action plans.  Text analytics generates insights from customer comments.  The continued application of advanced analytics allows banks to understand more about what drives customer satisfaction and loyalty, why customers behave as they do, how customers make decisions, and where customer experience improvement efforts should be focused.  By placing the customer at the center of their business and embracing new developments in customer experience technology and analytics, banks should continue to evolve and move forward on the CXEvolution Maturity Curve.