Three Pillars of Customer Experience: Insight, Culture, and Design
February 23, 2011
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.
Consumers don’t trust Facebook for recommendations
July 27, 2010
A recent report from ForSee results may undermine corporate efforts to engage with customers through social media. As reported in FastCompany, “consumers don’t use Facebook or other media sites for product recommendation purposes and generally don’t purchase things as a result of posts on these sites. That news will be a slap in the face for the many companies that interact with their clients through Facebook fan pages or Twitter conversations.”http://www.fastcompany.com/1672161/facebook-customer-satisfaction-survey-low-score
Under-do the Competition
June 9, 2010
Banks are a competitive bunch. We have sportsmen on our adverts, we want to be bigger, most innovative, most admired, have more skills, more capabilities, more products. We want to beat the competition. We want to win.
Often this is how we approach our projects. We equate advantage to more features on a system or product. We believe business benefits come from more flexibility and infinite customization. “More” wins.
But is this culture of “winning” a mistake?
In their recent book “ReWork” , Jason Fried and David Heinemeir Hansson challenge wisdom of winning. The authors compare the one-upmanship of business to a cold war; a never-ending battle that costs money and time, and forces companies on the defensive who consequently can’t think ahead.
The authors advocate another approach, to “under-do” competition through simplicity. At Experience Banker we agree that the most popular products have the least features and best products are the simplest.
Take the camcorder The Flip.
The Flip has taken significant market share in a short time. But it has:
No big screen
No photo taking ability
No discs
No menus
No settings
No video light
No viewfinder
No headphone jack
No special effects
No zoom
No memory card
No headphone jack
The Flip is popular because it does a few things ands it does them well. It doesn’t compete on features and consequently is easy, useful and fun.
According to Accenture, 95% of all electronics which are returned by consumers have nothing wrong with them – consumers simply can’t figure them out. And compare the Apple TV controller (6 buttons) to a regular TV remote (35 buttons) Which is easier to use? which has less buttons?
Experience Principles # 2. Account Statements
April 8, 2010
If you’re involved in web design you’ll be familiar with Jakob Nielsen’s heuristics for the usability of websites. Nielsen’s heuristics or, if you prefer, rules of thumb are design principles for websites based on ergonomics and good information design.
Often the most complex information that banks present to customers is not online, but as paper based account statements. This can be a major source of dissatisfaction. Customers complain of too much paper, missing information, inconsistencies between print and web statements, or ugly and confusing design.
Improving this basic but critical part of the banking experience has a real business benefit. Cap Gemini’s 2008 Wealth Report identifies the trend of investing in customer reports and statements as a way to improve the experience and deepen bank-customer relationships. But Cap Gemini stresses that the business benefits are dependent on effective execution.
Unlike for web design, there isn’t much in the way of accessible literature about how to design information for bank statements and wealth reports. This is why ExB have proposed a “starter pack” of 5 principles that can be used to assess and guide the design of account statement and reports. Our principles are derived from web heuristics and print design good practice
The ExB Account Statement Principles are:
1. Relevance
2. Legibility
3. Clarity
4. Consistency
5. Simplicity
Ask a private banking customer (of any bank, in any country) what they value about their private bank, the answer is invariably “My Advisor”. Private banking is personal, professional service, so you could be forgiven for thinking that the web plays no role in a business that relies upon face to face contact.
“You must speak to my advisor”
The reality is that many private banks and wealth managers don’t understand how prospective customers use the web to make decisions. In turn, banks may squander the chance to bring prospects closer to becoming customers through the web.
It’s true the most common way that wealthy customers are introduced to a bank is by a personal referral. Typically the referral is not to the institution but to a specific advisor. A prospect is more likely to hear a friend or colleague say “You must speak to Brian, my advisor” rather than “You must speak to Bank X”.
It’s the next step in a prospect’s decision making where the web plays a critical role. Customers will use the website to validate the referral. They want to feel that the bank is right for them. They want to find out about the fees, maybe get the phone number; but most importantly prospects need to find out more about the people.
Promote your advisors online.
A vital way of bringing prospects closer to becoming clients is to present real profiles of advisors on a bank’s website, brochures and advertising. Focusing on the human elements of private banking encourages acquisition by strengthening the relationship at an early stage.
Clients value the human aspect of private banking above all others. A successful private banking relationship needs a personality “fit” with the advisor who is expected be a trusted, long term, single point of contact.
Who’s doing this?
A few private banks are taking the initiative here, the German private bank Quirinbank has a section on their website dedicated to in-depth profiles of their advisors, likewise Switzerland’s Reichmuth and Co bank. The website Switzerbank.ch goes a step further and lets customers find and contact advisors online.
In choosing a private bank, customers will use the web – whether it is to validate a referral, get contact information or to find out about services and fees before a meeting. Private banks have the opportunity to improve acquisition of wealthy clients by converging the most exclusive part of private banking – the advisor, with the most accessible information channel – the web.
What will the iPad mean for banking?
March 21, 2010
The Apple iPad looks and feels like a big iPhone. The larger screen size and touch interface are great for watching movies and reading books. But what does the iPad have in store for banks and their customers?
An obvious application is online banking. The multi-touch screen means that simple tasks, like moving money between accounts by pointing and swiping your finger will be an intuitive, tactile experience. All very cool but, the real opportunity is for wealth management.
Wealth Advisors often use paper reports as a relationship management tool in face-to-face meetings. This feels exclusive and works well, but limits scope for spontaneity. The iPad could allow immediate scenario modelling based on the conservation with the client; or to do on the spot transactions. Some banks are already investing in Microsoft surface technology for similar uses in branches, but the portability of the iPad means it has the potential to further personalise and heighten the exclusivity of the service away from the branch.
Private banks might even want to give iPads to wealthy clients in order to replace volumes of paper that are currently sent out. Customers complain that their bank sends them too much useless paper and the advisor may spend valuable time manually configuring reports to be relevant and concise for clients. Since the iPad is designed as a medium to read books, it would make a great medium for accessing, explaining and storing the vast array of documentation that banks spew into clients’ lives.
Although a word of caution – don’t let the iPad’s capability result in “feature-creep”. The simplicity of the iPhone is driven by the size of the interface. iPhone App designers are made to focus on what’s important in order to fit the screen size. This has the effect of keeping it easy to use. I fear that banks will see the opportunity of a bigger screen to add more stuff: more features, cross selling, upselling and so on.
Whether it’s an investment product, an account opening document or a website Banks already have tendency to add features and functions without considering the customers’ real needs, usually because the competitors are doing it.
For banks to succeed in designing banking services for iPads they need to focus on what’s important to the customer and leave out everything else.
For a demo of the iPad take a look at New York Time’s video discussion.
1. What Does the New Apple iPad Mean for Banking www.netbanker.com/2010/01/what_does_the_new_apple_ipad_mean_for_banking.html
2. iPad Banking www.yardassociates.com/press/ipad-banking
3. Thou shalt bank on an iPad www.bankingreview.com.au/2010/01/thou-shalt-bank-on-an-ipad.html
4. Mobile application sales to reach ‘$17.5bn by 2012′ http://news.bbc.co.uk/2/hi/technology/8571210.stm
