The consumerization of IT and the explosion of mobile devices have created significant expectations in the consumer’s mind. For instance, Strangeloop Networks reports that if a Web page takes longer than three seconds to load, 57 percent of mobile customers will leave the page. And according to MoPowered, 30 percent of customers abandon a transaction if the experience is not mobile-optimized.
Statistics such as these are ignored to a company’s peril. For better or worse, customers are in the driver’s seat. This realization is especially important for companies in the financial services industry because customer experience is, without a doubt, their greatest customer acquisition and retention tool. The new focus on customer experience and building loyalty is even causing a revolution among the financial institution governing bodies, as was the case with the recent Current Account Switch Service (CASS) campaign in the UK.
The UK Payments Council implemented new rules in an effort to support the entry of new banks, increase competition between banks and give customers a wider variety of options. One of the biggest changes they applied was the minimization of the wait time for customers who switched banks. Instead of waiting an inconvenient 30 days for the switching process to complete, they now could move from one bank to another in a hassle-free seven days. This new standard not only increased the efficiency that services companies set for themselves, but it forced institutions to review the way they treated both new and existing customers.
Launch results revealed impressive statistics that clearly showed banking customers’ desire to go where great customer experience is. There have been over 1.1 million customer switches (a 19 percent increase compared with the same time period one year before). Additionally, 70 percent of the public are now aware of the new service, and 61 percent of the public are confident about what the new service offers and how it works.
Clearly, positive experiences are the key to gaining new customers and engendering loyalty among current ones. If you’re a high-performing financial services company, you’ve probably already started to act on this knowledge. You are part of the minority who are outperforming your competition by having a fully integrated digital/physical strategy to aid your customer experience programs. If you’re not, then you are part of the larger percentage who is struggling to apply these customer-focused practices to your business.
A best practice for exceptional customer experience is to be proactively engaged with your customers rather than waiting to react to their needs and opinions. That is, don’t wait for your customers to ring alarm bells before you decide to give them the services they want. Understand their customer journey and how they interact with your brand. Find out what they want before they start complaining on social network sites about your company. Most importantly, realize that your goal is to keep your customers loyal, not to only win new customers.
Data compiled by marketing expert Brandon Gaille demonstrates that 12 to 15 percent of consumers are faithful to a single brand, but they account for between 55 and 70 percent of sales. This clearly shows the value of loyalty. Strangely, 68 percent of consumers take their business elsewhere for little or no reason. That’s particularly bad news, since it cost five to seven times more to acquire a new customer than to retain one.
Loss of customers equals loss of revenue, but reducing customer loss by five percent can increase profits up to 75 percent. That’s a staggering statistic and drives home the point that creating loyal customers must be a business priority. One action that companies can take to capitalize on the above fact is to create a reactivation program to woo “lost customers” back. Currently, only three percent of companies have such a program.
The reality of the customer-focused business is that you can’t solely focus on customer acquisition. Data clearly shows that a customer acquisition plan costs more and yields less revenue. Customer loyalty and retention must take center stage, and a Customer Experience Management (CEM) program is the way to not only manage customer expectations but deliver great experiences that keep them coming back for more. Action steps to implement a successful CEM program include:
- Recognize the financial benefits and competitive advantage of customer retention.
- With buy-in from key stakeholders, deploy a fully integrated digital and physical customer experience strategy that “listens” across all channels for feedback
- Use this feedback to understand how customers engage with your brand and what they expect from it.
- Distribute these insights from your CEM program in a timely manner to sales managers and customer-facing employees.
- Then, proactively interact with customers based on those insights. Surprise and delight them by meeting and even anticipating their needs.
Customers have become accustomed to instant gratification, and they readily go elsewhere to competitors if they don’t get it. Today’s businesses must learn to proactively listen to and engage with customers and act on their input in order to keep them. Customers may be in the driver’s seat, but a body of consistently delivered great customer experiences is the engine that drives business today.
