Customer Centricity - important today, critical tomorrow
In many industries, disruption and change triggered by digitalisation and other global trends are not a short-term phenomenon but illustrate a long-term market environment in which financial service providers must design an impactful and experience-based service offering. With customer experiences being provided by fast-paced digital-first companies, today's customers increasingly demand personalised products and services as they are accustomed to seeking tailored products 24/7 rendered at the touch of a button.
In other words, financial services providers not only have to compete with their peers, but also with the customer experiences made outside of the industry. Understanding the customers' individual needs is at the heart of a positive customer relationship and a key success factor. An integrated and optimised customer journey depicts an important opportunity to differentiate from the stiff competition, leading to sustainable business success in the long run.
Customer expectations are connected and need to be addressed holistically
How can relevant customer needs be identified and addressed? Customers expect financial service providers to provide a connected service. A positive customer experience is the sum of many individual components. Service reliability is an obvious one, while others come into play only in specific situations, for instance touchpoint interaction. Moreover, customer expectations are not static; they are dynamic in character and their relative weighting may change in the overall customer experience. For this reason, it is essential that financial service providers align their organisation to customer expectations by adopting a customer-centric approach, achieving a high level of adaptability and flexibility in the process. The transformation to a connected enterprise will enable financial services providers to keep pace with these challenges.
Connected enterprises think holistically in five dimensions
To achieve optimal customer centricity, an enterprise must develop a strong empathy for the customers' perspective since its ambition is to understand their drivers of value. Connected enterprises act along and incorporate the following dimensions:
1. Customers: engaging customers with compelling value propositions, opportunities and interaction
2. Digitalisation & market dynamics: digitalising their value chain and acting flexibly in response to market dynamics
3. Employees: empowering employees to deliver on the customer promise
4. Organisation: combining front, middle and back office into one organisation to achieve customer growth goals
5. Channels & ecosystem: forming networks with business partners and within their ecosystem to meet customer needs together.
Connected enterprises understand their customers and act accordingly
To serve customer needs effectively, it is necessary to understand customers and their life situation at the outset in order to derive their actual needs. The entire customer journey and existing touchpoints need to be carefully analysed using data and analytics. For instance, data can be collected throughout the acquisition phase to understand how a prospect becomes aware of the financial institution (e.g. via campaigns, search engines, recommendations, etc.) or to innovate how customer reference groups are segmented. In this sense, predefined categories (e.g, living environment, region, sinus milieu, etc.) and real-time data (e.g. at the point-of-sale or other touchpoints) may be used in a combined approach to define personas and user groups (e.g. app user) that reflect the real world. This novel way of segmentation illustrates the foundation to personalise and strengthen the business's own service offering. Many financial services providers are still missing out on a great learning opportunity to design their respective touchpoints because they do not collect the relevant data or fail to draw the right conclusions. In this regard, data protection is also an important topic that needs to be taken into account through the development of a suitable data framework.
Maximise data-driven customer value
Across all phases of the customer journey, it is possible to optimise customer value through the use of data. This especially applies to digital channels. However, data-driven solutions can also provide support for traditional channels in which the customer interacts directly with an advisor. Using an advanced CRM system, for instance, could collect data for all customer touchpoints.
Using this valuable data, connected enterprises can develop eight core capabilities that translate directly into customer expectations:
1. Insight-driven strategies & actions: "I am me and I am unique"
2. Innovative products & services: "address my specific needs"
3. Experience-centricity by design: "make our communication easy and enjoyable"
4. Responsive operations: "don't let me wait"
5. Integrated partner & alliance ecosystem: "All-round care from a single source - that's what I want”
6. Digitally enabled technology architecture: "I expect security and stability"
7. Aligned and empowered workforce: "I want to be assisted by motivated and competent employees"
8. Seamless interactions & commerce: "I want solutions, not products"
Focus on the customer
Increasingly, customer centricity is a determinant of success. Targeted optimisation can help you to stand out from the competition. To understand customer needs, you should collect and target the relevant data across the entire customer journey. The technological options for doing this have reached a high level of maturity and are established in many industries. It is important to set the starting point to optimise a holistic customer journey.