Guest blog from Xand Griffin of PeopleMetrics:
We banking customers hate fees. Many of us feel our banks are cheating us, unfairly profiting from our business through hidden and unnecessary charges. Hey, I switched my bank because of the fees they were charging (and have lived happily ever after with my new bank- read about that here).
Enter the Most Engaging Customer Experiences Study
At PeopleMetrics we are passionate about helping companies earn customer love. So, late last year we asked a lot of customers as well as banking executives about how the banking industry could be more loveable – that is, how could banks create more positive, memorable experiences that would make their customers loyal for a lifetime? This was the basis of the Most Engaging Customer Experiences study.
The first thing we found was that bank executives have an inflated opinion of the experience they are delivering. 78% of executives believe the customer experience has improved over the past 12 months – but only 28% of customers believe the same thing. Why? Because executives are not focusing on the areas that really matter to customers.
Misalignment of Priorities
Specifically, we gave customers a chance to rank their priorities. We asked customers how they would allocate priority points if they were advising the CEO of their primary banking institution to improve the customer experience. The top three items that mattered most to customers were:
1. Products and fees
2. Putting customers first
3. Finding and keeping talented employees
Among the 70 bank executives interviewed, however, products and fees was ranked in 7th place. And putting customers first was in 5th place. Actually, the only thing customers and executives agree on is finding and keeping talented employees, both placing this as the 3rd place priority.
So, we have a fundamental clash. Banking executives know that their businesses run on the products they offer and the fees they charge. Why then would these items factor high on their list of priorities?
Learning from the Most Engaging Customer Experiences Study
What can the banking industry learn from this? Essentially, customers don’t see the value in the fees that are being levied because the experience they are receiving simply isn’t worth it. Yet, executives are blissfully unaware of this – believing that the work they have been doing to improve the customer experience is working. Not so.
To make customers less hateful of bank fees, bank executives should focus on the customer’s second priority: putting customers first. If banks build products and services that add value to the customer – where they are in life – charging for that value becomes a non-issue. In order to make those fees that are out of bank’s control worth it to customers, they need to create a customer experience that puts the customer first.
It’s easy to say “Make the customer experience better” – but here are 3 ways to walk the walk.
Listen, Act and Learn from Customers
What better way to put your customers needs first than to ask them? Many banks are investing in Voice of the Customer software that allows them to capture customer feedback at critical touch points and moments of truth and use this feedback to forge a conversation and a stronger bond with that invidivual customer.
Over time, this data can be aggregated to identify the big issues for particular customer segments, thus driving a customer-centric product and channel strategy. Inventing products and services, and associated charges, in a vacuum will only lead to more customer dislike and churn.
Finding out what they want, how they perceive you and how you can improve – and showing them you are committed to doing so by closing the loop on customer feedback – will change their experience. By doing this you will make them feel that you really are putting them first.
Continue to Focus on Awesome Talent
Customers agree with the existing focus on finding and keeping talented employees –remember it was 3rd place for both customers and executives. No customer experience strategy is going to work without a clear focus on how to engage talent and how to build a culture that supports customer focus. If you are not currently measuring employee engagement, rewarding employees for their customer focus and deliberately managing your customer-centric culture then you will fail at this highly critical priority.
Take the Long View
The people that are getting hit with fees the most are the customers that aren’t worth a lot to banks - today.
Banks need to shift from a transactional mindset into thinking about lifetime value. Some customers may not be worth much right now, but tomorrow they could be high value. Snubbing them now means they’ll never grow to love you, and will likely leave.
What Have We Learned?
So the three things banks should do today:
• Listen, act and learn from customers
• Deliberately manage employee engagement and your organizational culture
• Take a long-term view of customer value
Why do fees suck? Fees suck because we don’t believe the customer experience is good enough to warrant paying for it. Banks, let’s change that by changing how you treat your customers.
Want to understand more about the retail banking industry? Download the retail banking paper here.