Discuss the dramatic changes that are occurring in financial services
and identify the key drivers of that change.
Understand the implications of a mindshift from branch centric to
customer centric.
Understand why Market Segmentation and Customer Experience
Management have become essential to competing in the financial
services arena.
Gain insight into the Parallel Transformation Strategy and how to use
it to find the balance between providing stability and promoting
change in an industry experiencing disruption.
Understand how to use the Parallel Transformation Strategy to
define the role of the branch and the role of electronic delivery going
forward.
Lance Kessler & Associates
Marketing Consulting and Training_____________________________________________________________
Transforming Your Bank to Customer Centric
Financial Services Industry:
Issues & Trends
1. For every Starbucks store in the United States, there are ______ bank branches.
a) 3 b) 6 c) 9 d) 12
2. According to an ABA survey, which one of the following banking methods ranked the highest and was preferred by 31% of customers?
a) Branches b) Mobile c) Internet d) ATM
4. Within just ten short years, we’ve gone from 50-60 percent of our day-to-day transactions being done over the counter at the branch to ______% of our day-to-day transactions now going through the Internet, mobile, call center, and ATM.
a) 65% b) 75% c) 85% d) 95%
5. In 2006, 70% of checking consumers said they would prefer to make deposits with a teller in the branch. In 2014, ______% of checking consumers prefer to make deposits with a teller in the branch. a) 65%
b) 54% c) 35% d) 25%
Lance Kessler & Associates
Marketing Consulting and Training_____________________________________________________________
Transforming Your Bank to Customer Centric
6. ______% of all banking products are sold in the branches. a) 30%
b) 40% c) 50% d) 60%
7. ______% of U.S. consumers prefer to talk to a person vs. purchasing a banking product online.
a) 43% b) 57% c) 66% d) 71%
8. ______% of U.S. consumers believe they will use their branch as often or more often in five years’ time.
a) 45% b) 52% c) 66% d) 78%
9. According to a McKinsey Study conducted in 2014, ______% of
consumers interact with financial institutions through multiple channels. a) 15%
b) 25% c) 55% d) 65%
10. ______% of small businesses are in the branch monthly. a) 60%
b) 70% c) 80% d) 90%
Lance Kessler & Associates
Marketing Consulting and Training_____________________________________________________________
Transforming Your Bank to Customer Centric
11. In 2009, FDIC-insured institutions operated 99,550 banking offices, which was an all-time high. The number of banking offices declined by ______% between 2009 and 2014.
a) 4.8% b) 7.3% c) 11.5% d) 23.2%
12. 52% of consumers over 50 years of age visited a branch within the last 30 days. ______% of consumers under 30 years of age visited a branch within the last 30 days.
a) 50% b) 42% c) 33% d) 24%
13. There are 100 million people in the U.S. that are over 50 years of age. They control approximately ______% of the disposable income in the U.S. a) 40%
b) 50% c) 60% d) 70%
14. ______% of millennial Internet users do in-branch banking (not including the ATM).
a) 32% b) 45% c) 53% d) 76%
Lance Kessler & Associates
Marketing Consulting and Training_____________________________________________________________
Transforming Your Bank to Customer Centric
15. ______% of millennials would rather go to the dentist than listen to what their banks are saying.
a) 52% b) 63% c) 71% d) 84%
16. ______% of U.S. adults who had a negative experience with an
organization or company indicated that they would spread the word about the bad experience.
a) 51% b) 63% c) 72% d) 84%
17. 80% of companies believe that they are delivering a superior customer experience.
______% of customers perceive their experiences as superior. a) 8%
b) 20% c) 32% d) 44%
Drivers of Change
External
Forces
Positive
(Growth–Opportunity)
(Threats-Pain-Fear)
Negative
Opportunities
Threats
Organizational
Environment
Industry
Environment
Contextual
Environment
Less or No
Org Influence
Some Org
Influence
High Org
Influence
Source: Adapted from Monitor Group – Global Business Network
• Competitive Strategy
• Products & Services
• Customer Experience
• Delivery Channels
• Costs & Pricing
• Industry Dynamics
• Customer Behaviors
• Competitor Moves
• Other Stakeholder
Developments
• Political Environment
• Economic Environment
• Technology Advances
• Cultural/Social Change
Call Center
ATM
Credit
Online Banking
Kiosk
ATM
Online Banking
Credit
Face-to-Face
Call Center
Mobile Banking
Smart Phone/Tablet
Video Teller Machines
Branch Banking
Web Site
Customer-Centric Self-Test
7 or 8 6 or less
7 or 8
6 or less
Misaligned Customer-Centric
Aimlessly
Wandering Misdirected
Organizational Engagement Customer
Familiarity
Source: Adapted from Forrester Research, Inc.
Scoring:
0 = Disagree with statement
1 = Somewhat agree with statement 2 = Mostly agree with statement
Customer Familiarity
1. Our company has a clearly defined set of target customer segments.
2. Employees across the company share a consistent and vivid image of target customers.
3. Market research is used to fully understand the needs and behaviors of target customers.
4. Decision-making processes systematically incorporate the needs of target customers.
Total Customer Familiarity
Organizational Engagement
1. Senior executives regularly interact with target customers.
2. Senior executives consistently communicate the importance of serving target customers.
3. Employees across the company are recognized and rewarded for improving the experience of target customers.
4. The quality of interactions with target customers is closely monitored.
Total Organizational Engagement
Identify Your Target Market(s)
Understand What Your High Priority & Priority Customers Value
Allocate Resources So You Can Differentiate Yourself with Your
High Priority & Priority Customers
Make Your Marketing Dynamic & Adaptive with Your High Priority &
Priority Customers
Sales & Service
Building Relationships
Touchpoints:
Human Engagement
•
Human Engagement
In the branch environment, banks need to shift from focusing on
transactions to meaningful interactions.
In all customer contact situations, bankers need to understand
the customer and his/her situation in a way that allows them to
create real, differentiated value that is perceived by the customer.
The bank needs to figure out how to fit into the context of the
customer’s life rather than expect the customer to fit into the
context of the bank’s physical presence.
The bank also needs to remove the obstacles/friction wherever
feasible and make it as easy for the customer as possible.
The Challenge with Digital
Engagement
Identify key variables/drivers that you can deliver
that will differentiate you in the marketplace
Define from the customer perspective
Attributes Important to Customers
◦
Trust
◦
Responsive
◦
Customized/Individualized
◦
Respect
◦
Caring
◦
Guidance/Good Advice
Customer Research
Responsive to customers’ individual needs
Received special treatment from someone who respects
them and cares
Trust us and our advice today and in the future
Viewed as trusted financial advisor
Customer Perspective:
When we are successful in creating a superior customer
experience, our customers will feel we have been
responsive
to
their individual needs
. They will feel like
they have
received special treatment
from someone who
respects them
and
cares
, and they will
trust us and our
advice
today and in the future. We will be viewed as their
Branch Banking Experience
Face-to-Face Experience
Call Center Experience
1. Customer pulls into the parking lot / drive-in
2. Customer walks into the branch / up to ATM
3. Customer goes to teller line to ask / conduct transaction
4. Customer needs to meet with someone / conduct transaction
5. Customer directed to appropriate person
6. Customer meets with appropriate person
7. Service need addressed / sales process applied
8. Service solution / sales process completed
9. Follow-through
10. Follow-up
Criteria for
Success/Measures
•
Customer Satisfaction
•
Customer Retention
•
Customer Experience Score
•
Net Promoter Score
Customer Experience
Employee Goals
•
$ Loan Goals
•
$ Deposit Goals
•
$ Fee Income Goals
Low Performance
High Performance
High Importance
Low Importance
Critical
Improvement
Issues
High
Leverage
Issues
Low
Priority
Issues
Low
Leverage
Issues
.
Responsiveness
.
Individualized
Solutions
Trust
.
Caring
.
Financial
Advisor
.
Special
Treatment
.
Respect
.
Overall Customer Base
◦
Accounts
◦
Balances
Existing Customer Base
◦
Accounts
◦
Balances
New Customer Base
◦
Accounts
◦
Balances
Checking Accounts
◦
Accounts
◦
Balances
High Priority Customers
◦
Accounts
◦
Balances
Existing High Priority Customers
◦
Accounts
◦
Balances
New High Priority Customers
◦
Accounts
◦
Balances
High Priority Checking Accounts
◦
Accounts
Branch Employees Scored on Defined Customer Experience
Behaviors
◦
Each branch position is shopped & given Customer Experience Score
◦
Individual branch position shopping scores are totaled to achieve monthly
overall branch Customer Experience Score
How likely are you to recommend Encore Bank to a friend or
colleague?
10 = Extremely Likely
0 = Not At All Likely
10 9 8 7 6 5 4 3 2 1 0
Source: The Ultimate Question, Fred Reichheld/ Satmetrix Systems, Inc. and Bain & Company
