Experience Banker

In last year’s post on the Customer Experience Maturity Model, we introduced the stages of maturity in delivering customer experience. Now, in 2011 the need for customer focussed change has never been more apparent than in banking. Recently one of the UK’s biggest banks, RBS, was fined for failing to deal with customer’s routine complaints.

How does a huge organisation fail to deliver on a basic customer need like handling a complaint?

We believe there are three common organisational barriers to positive customer experiences in business: no customer experience strategy, lack of employee empowerment and insufficient mechanism to transform customer feedback into action.

Or put another way, businesses must develop capabilities across three “pillars”: Insight, Customer Culture and Experience Design. We call these the three pillars of customer experience.

Pillar 1. Insight
Does a business have an accurate, data driven, picture about its customers, their needs and behaviour?

Pillar 2. Culture
Does the whole business care about giving value and service to their customers and colleagues?

Pillar 3. Experience Design
Does the business actively design a differentiated experience at all touchpoints?

If we combine the pillars of customer experience with the stages of maturity, a picture emerges that helps to pinpoint specific capabilities that businesses must demonstrate in order to claim a certain level of maturity in the CXMM.

ExB has identified a set of capabilities and activities, that can guide a business from an inward looking organisation to one that joins business strategy and customer experience.

What does a company need to do at each level and in each pillar to deliver that stage customer experience maturity? Let’s break down each stage and pillar in detail.

CXMM Stage 5 – Passionate
At stage 5 a business is an undisputed leader in customer experience. Customers are passionate evangelists. They feel privileged and share their positive experiences with others. Examples include Singapore Airlines, Mandarin Oriental, Harley Davidson, Ritz Carlton.

Stage 5 Insight
A stage 5 business tracks and reports on ALL interactions with customers and predicts the effect of future interactions. Businesses at this level have invested in systems that augment CRM data with real-time feedback and track individual customer’s activities when not interacting with the business e.g. on social networking sites.

The line between “CRM” and “business intelligence” is blurred, all customer insight like satisfaction scores and demographics is shared with all employees and will alert decision makers when interactions are outside of established metrics. Businesses use this rich customer picture not only to offer the right products to customers but use this intelligence to drive new product design.

Stage 5 Culture
A business with passionate customers routinely involves them in setting the direction of the company and in the development of new products and services. A great example is Richard Teerlink, the former CEO of Harley Davidson, who regularly went riding with bike owners on weekends and subsequently insisted that his senior executives spend at least 15 days per year riding with customers, a process he dubbed “super-engagement”.

A stage 5 business will operate a customer-centric organisational model. This means that the business has structured itself around key customer segments (rather than products or processes) in order to deliver optimum value propositions. Read Booz Allen Hamilton’s paper on customer-centric operating models for a thorough treatise on placing customers at the heart of operating models.

Stage 5 Experience Design
Business have unprecedented behavioural data about individual customers that lets services and products to be tailored to individuals not just segments. The value of tailored offering is measured not only on sales benefits but also on the long-term value of the customer experience.

And a stage 5 businesses knows that passionate customers can be developed when things go wrong. These businesses have identified potential failings in a customer process and put in place pro-active actions for predicted experience problems. Ideally these measures are triggered before customers are even aware of the problem or complain. Techniques include engineering methods such as Failure mode and effects analysis (FMEA) and rapid response plans to deal with critical experience failures.

CXMM Stage 4 – Engaged
Stage 4 businesses have a comprehensive, actionable picture of customers, and a culture of accountability. Customers are willing to pay more for increased value and feel rewarded for loyalty. Examples include Apple and Virgin.

Stage 4 Insight
A stage 4 business quantifies and measures the value of customer experience. Business priorities are driven by what the business understands about customers. All major change initiatives follow a customer-focused design process and include customer insight reporting as a major indicator of success. Change prioritisation includes weighted customer metrics related to value (a point that management consultancies methodologies mostly fail to realise).

Stage 4 CXMM means that customers can provide immediate feedback about their experiences through any touchpoint. And feedback is immediately available to executives and responsible managers through a dashboard. The goal is to provide real-time actionable customer intelligence to all decision makers.

Stage 4 Culture
At stage 4, all employees fully understand how their role impacts customers and are empowered to deliver a positive customer experience. Employees are measured on customer metrics as part of performance rating. A successful example comes from Barclay’s Commercial Bank, winner of UK employer of the year in 2007. Barclays introduced “credo cards”. These single-sided cards outline Barclay’s services in action orientated sentences like “take ownership, avoid handoffs, and escort the customer”.

Stage 4 Experience Design
The stage 4 business has a clear strategy on the kind of customer experience they must deliver to identified segments in order to successfully compete in the market. The quality of customer experience delivery is fully under control, with consistent, positive experiences delivered each time. Owners are established and held accountable for customer touch-points and customer processes.

Using communication tools like customer promises or “bill-of-rights” the business has communicated to customers what they should expect to receive – and customers believe it. An example comes from RBS, who’s customer charter defines what customer should expect in terms of service quality. But a charter is not enough if the business is not geared to deliver and measure on it.

CXMM Stage 3 – Understood
Stage 3 businesses understand their customers’ needs and behaviours. Deep insight programmes are in place that track and drive customer service and ensure a consistent experience. Customers feel that their needs are mostly addressed by the products and services offered. Examples include Marks and Spencer and Egg Bank.

Stage 3 – Insight
At stage 3, core, met and unmet customer needs are understood in a way that helps identify new business opportunities. Customer needs are uncovered by sustained qualitative customer research programmes that focus on drivers of behaviours not only retrospective satisfaction measures.

Business at this stage use data about customer behaviour to trigger a business response. For example a private bank may consider a customer’s reduced contact with relation managers as a signal that a customer may reduce assets under management so triggering proactive contact.

Stage 3 Culture
A prevailing “internal customer” service culture typifies stage 3 businesses. Employees treat each other as customers, striving to provide superior service internally.

Business performance is measured on customer satisfaction and behaviour. One or more customer metrics, such as NPS or satisfaction, are on the management scorecard. Information about the customer base, including satisfaction, needs and trends, is shared among all employees and easy to understand. Techniques include distribution of customer profiles or personas.

Stage 3 Experience Design
At stage 3 the key drivers of positive experiences actively managed. The most important moments in the customer experience, those things that are critical to quality for customers, have specific performance objectives and are actively tracked.

For example, in retail banking a common abandonment point during account opening is when customers need to post back a form to complete the process. Having identified a vulnerable point in the customer process, business can actively manage that part of the experience using the mobile, web and telephone contact to encourage fulfilment.

CXMM Stage 2 – Heard
Stage 2 business have broad understanding of who customers are and how they feel about the business. Customers feel that the business is interested in learning from them, but they don’t have much attachment. Examples include Credit Suisse, RBS and HSBC – in fact, many banks are at this stage.

Stage 2 Insight
A stage 2 business uses customer research to segment their customer base. Customer satisfaction and its drivers are understood, but only in the context of the industry. Businesses at this stage will acquire and manages data on satisfaction through warehousing and regular market research including benchmarking, mystery shopping and satisfaction surveys.

Stage 2 Culture
Management understands available customer insights although at stage 2 it is rarely shared throughout the business. Bosses may communicate both externally and internally on the importance of customers experience to the success of the business.

Stage 2 Experience Design
The stage 2 customer experience is formed through systematic, ongoing improvements such as usability testing and use of channel metrics. At this stage a business will likely conduct competitive benchmarking and may have multiple channel improvement programmes, but these are unlikely to be joined up under a cohesive customer experience strategy.

CXMM Stage 1 – Ignored
Stage 1 business are inward looking. Customers often feel that the business does not understand or care about them. Customer experience is inconsistent and often unpleasant, indeed the business strategy may deliberately trade off customer service to reduce prices. Examples include RBS, Cablecom and Ryanair.

Stage 1 Insight
At stage 1 customer insight is employed at the most basic level and does not drive change. Businesses at this stage are capable of receiving and processing customer complaints but do not act on the root causes of complaints. Stage 1 businesses may track competitive positioning of customer satisfaction through 3rd party research

Stage 1 Culture
Some executives have gone through the customer experience and have a clear, accurate picture of processes and interfaces that customers use. But the organisational culture does not facilitate a top down influence on customer experience.

Stage 1 Experience Design
A stage 1 business tolerates bad experiences. The most critical experience failures are addressed reactively, but not in a systematic way.

CXMM – A framework for change
Creating customer focussed change is a long term goal for a business. Establishing activities that create positive customer experiences and achieve the necessary accountability among employees is a multi-year initiative that requires ongoing management to maintain, the value generated by improved loyalty and new customers makes it a sound investment.

In future articles we will describe how Experience Banker’s CXMM can be leveraged to audit the customer experience maturity of a business, drive strategy realise value.

If you want to know more about how CXMM can be used within your business send us an email on robert.ballantine@gmail.com.