Moving customers from loyalty to advocacy

Customer Experience

In the lifecycle of a relationship between brands and customers there are several stages, as most of you may already know. In an ideal world, the customer will progress along a path and keep on developing a relationship with the brand. Of course, that doesn’t always happen, but it helps to understand that this path exists and how you can nudge customers along by improving the customer experience.

  • Awareness:first the customer needs to become aware that you even exist and what it is that you offer. Traditionally, this was the role of a marketing or advertising team, but increasingly there are alternative methods that create awareness, such as viral videos or other social media activity and review sites such as Tripadvisor.
  • Purchase: making sure the process of buying your service or product is as customer centric as possible. Personalisation is key in today’s tech-driven age, as well as a friendly and efficient sales process.
  • Satisfaction:the product or service that you deliver needs to do the job. If customers are not satisfied, then they will never purchase from you again, and will use their networks to discourage others too. Simply not delivering a satisfactory service can have a very negative effect that extends beyond just one unhappy customer.
  • Loyalty:searching for services and products can be time-consuming. We all have our favourite brands for clothes or consumer electronics. Once a customer is satisfied with a brand and becomes loyal to them, then there are benefits – in saving time for the customer and a regular & loyal customer for the brand.
  • Advocacy:one step further on from loyalty is advocacy, this can be summarised as being a fan. Once the customer is not only satisfied, but actively loves the brand and advertises this to their friends, then they become an advocate. Good examples are the Apple fans that line up at midnight to buy new products or the Nike enthusiasts with ‘swoosh’ tattoos.

As this article in Hotel Industry magazine points out, brands can move beyond just satisfying their customers and creating both loyalty and advocacy by thinking more broadly about what customers are buying. In the hotel business, it may appear to be just a night in a hotel when seen as a service or transaction, but to the customer it may be the place they are staying for their honeymoon, or where they are staying after travelling from afar to attend a cup final football game. For the customer, they are buying a complete experience that they will remember forever.

By planning for customer interactions and a general experience that reflects this, many customers can be encouraged to not only be more loyal to the brand, they can become fans. This is possibly the best advertising for any brand / company because it’s almost impossible to buy. Our latest customer experience paper covers top stories on nurturing customer loyalty and how customer centricity can accelerate your commercial growth. Click here to read this week’s edition.

How can we motivate good customers to become brand promoters? If you have any suggestions, please leave a comment here or connect with me on LinkedIn.


What is the future for bank cards?

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The trusty bank card has been with us for half a century now - Barclays bank started issuing cards to their customers in 1967. But is time running out for cards as customers demand more services from banks via their smartphones?

Cash withdrawals at ATMs in Australia are now at the lowest level for 13 years. It seems that customers are finding they can manage without cash and most banking services can be performed using online services or apps.

The one thing that customers never leave home without is their phone and banks are realising this. The smartphone is moving on from being just a hub of personal communication to be the central control point for payments too. But will this spell the end of card transactions and cash?

Cash is certainly becoming harder to use in many locations. Anecdotally, I have found several small businesses, like coffee shops, that actively discourage customers from using cash. They don’t want to be managing floats for change so they ask people to use their debit or contactless card instead. But many banks are looking beyond the cash against card question and are exploring how the phone might completely replace both cash and card.

There is a convenience for customers. If you lose your wallet or leave it at home when you go to work, it’s likely that you will still have your phone. Making phone payments easier can reduce the size of your wallet, and possibly make the idea of carrying a wallet redundant. But then, it’s possible that you might also lose your phone.

Moving card payments to phones eliminates card fraud, such as skimming, where cards are cloned by criminals and accounts cleared out. This was largely controlled by moving to cards with chips and in some markets there are two-stage authentication systems for cards, rather than just a single PIN. However, any visitor to the USA knows that many card transactions there still rely just on the magnetic stripe and a signature.

Several banks have been exploring how to use near field communications (NFC) to remove the need for an ATM card to access cash. By using NFC, the cash machine can connect to the phone of the customer and security verification can be applied using several questions - not just a PIN. Bank of America and Chase have both seen considerable customer interest from happy customers who no longer have to carry a card to access their cash.

Wells Fargo offers a one-time PIN system where the customer uses their phone to request a PIN, which is then valid for just 30 minutes at an ATM. At Banco Bradesco in Brazil, the ATM scans the hand of the customer, dispensing the need for a card or phone system to verify the identity of the customer. Bradesco has reported over 700mn ATM uses without a single case of fraud.

The end of the bank card era might be coming soon, not just because customers find it easier to just carry their phone, but also because all the security issues associated with cards and fraud vanish once customers move to very secure phone-based payment systems. The chance for fraud is reduced and the customer has a better, and easier, payment experience. Perhaps, it really is the end for cards in the near future.

What do you think? Will fraud and smartphone payment systems really end the bank card era or do they still have uses that cannot yet be replicated on phones? Look forward to your comments.


Webhelp Starts Partnership with Facilities Management Team at the Co-Op

Leading global BPO and customer experience expert, Webhelp, is pleased to announce that as of April 1, 2017, it will begin to provide the National Operations Centre service for the Co-op Group Facilities Team.

The new service will focus on a combination of voice, webchat and email customer communication. The contract will be handled from Webhelp’s Derby site.

Anton Manley, COO of Webhelp UK, said: “We are delighted to have been awarded this new piece of business by Co-op Group Facilities Management Team.

 

A member of Co-op Group Facilities Management Team, said:“Webhelp’s innovative approach to customer experience and flexibility in offering new solutions is what makes them the perfect partner for the Co-op Group Facilities Management Team and will ensure we take the next step to delivering great service for our colleagues and customers alike.”

 

 


Could a bank offer you a loan based on your social network profile?

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Securing a bank loan has never been particularly easy. As bank services have gone online it’s easier than the days when a personal interview with a manager was required, but even a small loan requires quite a bureaucratic process. The customer is credit-scored, their balance is checked, and their recent banking behaviour will be scrutinised before any decision is made on the loan.

As an experience it is not good. A customer asking for a loan at a bank generally finds it quite a stressful experience. They are asking for help and yet the bank is challenging them to prove their ability to repay in addition to making the customer wait for a decision. Some banks manage to offer decisions fairly quickly, on the same-day for example, but I have heard of some government-owned banks that still take up to 90 days to make a lending decision. Imagine waiting for three months to know if you are going to get the money or not?

The wave of financial technology companies has identified loans as a key service where they can offer a much better experience than traditional banks. If a fintech company can offer an immediate decision, instantly transfer the cash, and offer a competitive rate then why would any customer still go to their bank for a loan?

But the risk of default still exists. Fintechs could use existing credit agencies, but they might not be able to improve the service being offered by banks. A new approach to determining whether a customer is good for the loan is needed.

Social Lender in Nigeria believes that your social networking activity holds the answer. They now have over 10,000 customers borrowing small amounts (usually around $30) and have a default rate of less than 4%. The service offers instant cash, scanning your social networking activity and applying an algorithm to the data to determine if your online behaviour indicates whether the lender should trust you to repay.

Lending small amounts like this may not sound like a significant dent in the business of larger banks, but the possible father of microfinance, Grameen bank in Bangladesh, now has revenues of around $200m a year - all linked to small loans.

If new banks and fintechs in Asia and Africa can determine better ways to decide who should receive a loan, without using traditional credit agencies, then how quickly could that change the loans market in the USA or Europe? A combination of building a customer focussed loan service and designing new credit checks could create an entirely new type of market for loans of all amounts.

What do you think about this combination of emerging credit checks using social networks and designing apps that offer loans? Will fintech companies really challenge the traditional banks? Feel free to connect with me and let me know.


How Innovative Is The Insurance Industry?

The insurance industry has always been about placing bets...

The customer pays a small premium and places a “bet” with the company – I will not need hospital treatment, I will not crash my car etc. Then the actuaries at the insurance company figure out how to spread the risk across their pool of customers.

It’s effectively been the same for hundreds of years, just we now have many more things that we can insure and many companies competing for business. However I have been talking in some recent blogs about how the car insurance business is changing through the use of telematics – by giving better information on the real risk to the insurance company, policies can be priced more effectively and this is good for customers and the insurer.

But I saw an article on Customer Think recently that also explored other innovations that are changing the insurance business and how customers experience their interaction with an insurer. Here are a few of the ideas presented in that article with my own comments on their significance:

Pay as you go car insurance; enabled by the telematics systems I discussed earlier. Instead of buying an annual policy for your car it should be possible to offer insurance just for the time you are using the car. The pay as you go concept could also be extended to other types of insurance – as we have already proved with travel insurance policies that only cover single trips.

Digital insurance management; it should be possible to start combining the various policies we all have from life to health to home to car… to get a better picture on risk by bundling them, getting better prices for the customer and creating the opportunity for companies to offer bundled products.

Home video innovations; some US insurers now offer an automatic home insurance policy discount if your home automatically records any visitor to the front door. How can more openness about information related to your home security result in better policies?

Better claims systems; by using better communication tools the process of claiming can move on from an arduous pile of forms that need to be completed to a fully interactive discussion with the insurance company.

I believe we are seeing all these changes take place at present. This is no longer about future gazing. As I mentioned in an earlier blog, almost half a million British motorists are choosing to allow their insurance company to monitor them on the road because it offers a better policy price.

What I do think interesting though is that every one of these measures improves the customer experience. Our latest white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn. Insurance companies offering better service is great for the customer and great for the companies that find they have happier and more loyal customers.


The Bank of the Future Will Be Online and Personal

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Recent research from McKinsey & Company suggests that the bank of the future will be entirely driven by customer experience and personalisation. McKinsey director Somesh Khanna explains:

“Digital capabilities can turn the customer journey into something that’s highly personalised. It’s the way in which the device connects with the interaction that you have with a branch teller, how that connects with the messages you get as a customer with your mailbox, and all of that being delivered in a way that is seamless, that knows you, that recognises you, that rewards you for your relationship with the bank. There’s a lot of amazing stuff that will likely happen—and is happening today in that space. And I think there will be a huge opportunity for banks to innovate.”

It’s clear that retail banks face an enormous challenge. Although they have been around for hundreds of years and have a customer base in the millions, financial technology (fintech) is creating an entirely new way to deliver banking services. New start-up companies can pick off specific banking services, like foreign exchange or loans, and offer a better service at a better price using the app store on smartphones to deliver their services.

Of course, the start-ups face the challenge of acquiring customers. The banks have been around a long time and there is great customer trust in their brands; but things are starting to shift in the marketplace. Even some leaders of major retail banks are acknowledging that because the fintechs are building services from scratch and designing them to work in a very personal way for each individual customer, a large chunk of traditional business will soon be lost forever.

Atom Bank is demonstrating an interesting approach. They do offer a full banking service, but with no branch network to support – because the bank is an app on your phone – they can offer better prices than the traditional banks. They are also trying to build systems that learn and understand the needs of individual customers.

A great example is their customer service system. However a customer contacts the bank, the interaction is recorded and fed into their artificial intelligence (AI) system. The AI system learns from every individual customer question and matches the queries to human responses, so it learns about how to resolve problems for customers in general, but also how individual customers prefer service to be delivered.

This level of personalisation would be impossible with any traditional approach to a banking customer service centre, but Atom Bank is showing that innovative new technologies can be used in a way that transforms the banking customer experience. (On a slightly different note, Atom took home the Gold award for Innovation in Digital Transformation at 2016 European Contact Centre and Customer Service Awards (ECCCSA), while the Webhelp team were delighted to win the Silver! Well done to everyone involved.)

The McKinsey research suggested that the bank of the future would be winning customers because of innovation and personalisation, but I beg to differ. One look at what app-based banks and fintechs are doing today shows that the bank of the future has already arrived.

Do you think that personalisation will change banking? Leave a comment with your thoughts, or get in touch with me on LinkedIn.


Shifting Focus to the Retail Banking Customers

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In their review of the banking industry for 2015, McKinsey & Company suggested that 60% of retail bank profits could be wiped out by fintech (financial technology) companies inside the next decade. Similar research by Accenture predicts that at least a third of retail banking activity will be lost by 2020 - that’s not far into the future to see a third of retail banking customers going to brand new competitors.

This dramatic change to the retail banking environment is a highly visible form of digital transformation, or industry disruption. In most cases, discussion around disruption seems quite academic – it lacks urgency. But when you look at the decline of the banking industry, it is clear that disruption is the only way to describe what is happening right now.

But we are not witnessing the destruction of retail banking as an industry or service; rather, the distribution of banking activities will move to new market entrants rather than remaining with the traditional service providers. According to recent Harvard Business Review research, 90% of senior executives across multiple industries believe that their industry is being reinvented by digital business models that are disrupting the existing ways that business takes place.

In a recent interview with Computer Weekly, the Fujitsu senior executive vice-president for Europe, the Middle East, India, Africa, and the Americas, Duncan Tait, said that it is possible to foresee and manage digital disruption. He said: “All industries will be unrecognisable to their current form as technology and digital transforms industries and connects them together over the next few years,” and Tait said speed and partnerships are the way to the top in this environment. “In this new world, only the boldest organisations will prosper, new areas of competition are opening up here and fast movers are gaining the advantage,” he added.

How are fintechs winning over retail banking customers?

So, whether you are in banking or not, industrial disruption is something that most executives are trying to predict - when it will happen and what it means for their business. To get an idea why these disruptions are taking place, let’s consider why fintechs are being so successful in banking:

  1. No baggage: this allows them to offer cheaper prices: every retail bank has an enormous branch networks with staff, processes, and infrastructure that cost an enormous amount to maintain. Fintechs can bypass all of this and operate with no legacy systems or processes. Even though there are now only a third of the retail banking branches in the UK that there were in the late 1980s, this is still a considerable burden.
  2. Their service can be local, or global, or in-between: most fintechs use the app store platform on Apple and Android to distribute their service. This gives them an immediate global distribution platform with an easy way to update users to the latest system. In some cases, regulations will restrict which markets they can operate in, but the distribution platforms are entirely global.
  3. Services are designed around the customer: if you had to design a system offering loans, would you look to the slow, bureaucratic procedures of your local retail bank or just tear up the rules and design it from scratch, making the service as straightforward as possible for retail banking customers? Of course you would design processes to be customer-centric – so the fintechs have an enormous advantage because they offer easy, hassle-free services.

In short, the services are easier for retail banking customers to use, work better, and are cheaper. The only thing the retail banks can rely on in the short term is their brand, reputation, and the fact that millions of customers are unlikely to move to new services overnight.

Further down the line we will see how the industry evolves. Retail banks might undertake some radical changes when they see how hard they need to fight for the business, or they might just buy some of the most innovative fintechs and bundle the offering into their own service.

The real point is that when competitors start creating disruption and building new services around how retail banking customers behave, it’s time to start examining your business and figure out how you can make positive change.

What changes do you think retail banks need to make to be more customer-centric? Leave a comment below, or get in touch on LinkedIn, and let me know.


Payment: The third wave of omni-channel expectations

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Many retail omni-channel discussions have focused on two distinct areas of how companies interact with their customers:

  1. Different sites of interaction: for a retailer it’s easy to define the physical store, an app, and a website all as different places where the customer can interact and the need is for all of them to offer an equally good experience.
  2. Channels used for discussion: the ability to call, use online chat, use Twitter, Facebook and other social media channels and all of them offering an equally good experience.

I believe that there is an important third dimension that is only just starting to be appreciated: this is the combination of loyalty systems and payment. There are specific reasons why this is now becoming important.

It has been assumed for a long time that online shopping is a lesser experience compared to actually being in a store, close to the products and with personal assistance available. However, customers have really started to value the online experience. Why? The retailer knows all about what the customer likes, dislikes, and what they spend time looking at. By collecting this data and analysing it, online stores are able to offer highly personalised recommendations and even discounts designed just for that individual customer.

Customers have noticed this and commented that in comparison, the in-store experience feels rather anonymous. Nobody knows whether you are an infrequent or regular customer when you walk through the door and if there are any deals then they are for everyone - not just you alone.

The obvious way to address this is to offer a more personal experience through an app, but this requires that the customer logs in when they are in-store. Getting customers to download an app, configure it, and login when visiting a store is a big ask. How can they be convinced that it is worth the effort?

Smart retailers have thought hard about this and found that if they can offer additional services on the app - like payment - then customers will use it. If the app makes the customer’s life easier then they will use it for payment, capturing loyalty points,. Meanwhile, the app can use the knowledge of which store the customer is in combined with their shopping history to offer deals and recommendations.

The Starbucks app is a great example. The big advantage is that customers can order and pay using the app before they arrive at a cafe, so you can literally walk in, grab your cup of coffee from the collection counter and walk out. Loyalty and payment are all bundled into an app that makes the customer experience better because you never need to wait in line again.

In the USA, Walmart has offered a payment option on their app. It allows the customer to attach almost any payment system to their Walmart account. After collecting their items in-store, the customer can pay on the app and just leave - no checkout line or hassle.

It’s really hard to convince customers that they should use up space on their phone with your app, but if you are addressing this third wave of omni-channel expectations and making their shopping experience easier than it is possible. In addition, it allows the retailer to gather even more valuable data about their shopping habits and preferences in-store and online.

Have you seen developments in payment that are affecting the customer experience in ways beyond just improving payment alone? Leave a comment below, or get in touch on LinkedIn, and let me know.


In a World Where Everything is Connected, Where Do You Start?

For the past decade we have heard bold predictions about how artificial intelligence (AI) and robots will transform all aspects of our lives. And indeed, what once seemed science fiction is rapidly becoming science fact. Driverless vehicles are taking to the road and we speak to devices that seem to understand us and respond appropriately. Algorithms analyse vast quantities of data in real time and this information is used by machines to support complex predictions and make decisions. In short the internet of things (IOT) has already become the internet of everything.

We are assaulted by this new technology on a continuous basis and for many businesses, especially those which have been slower to plug into this vast network of possibilities, knowing where to start can be a daunting prospect.

But doing nothing is not an option. Faced with a competitor that has successfully adopted these technologies a business may find itself at a significant cost disadvantage or losing out on sales opportunities they didn’t even know existed.

Getting involved may not be as overwhelming as it first appears. The availability of secure cloud hosting and the emergence of ‘as a service’ business models means that AI and bots can be accessible to businesses without prohibitively large upfront investment costs or the need to replace legacy systems.

Robotic Process Automation (RPA) and ChatBots can both offer quick wins. With RPA, back-office processes are automated and handled by machines. Machines are better suited to carrying out highly repetitive tasks and remove the concern of boredom and mistakes creeping into the process from human operators. At the same time, ChatBots can provide low cost customer care on a 24/7 basis, and use AI to anticipate the needs of the customer based on their history, profile and the context of the interaction. This results in highly relevant recommendations and offers being made to the customer.

We’re all familiar with the spectre of humans being replaced by robots, and in some industries, especially manufacturing, the number of workers has been significantly reduced by automation. With the latest advances in AI, automation is now even possible in highly skilled knowledge fields such as law, medicine and banking. And with sensors being embedded in an increasing number of objects, including buildings, equipment and appliances, it is possible for machines to communicate directly with each other and act independently of human interaction.

But the introduction of this new technology does not mean the end for human interactions in businesses or between businesses and their customers. Far from it. Removing real people from the repetitive and mundane tasks that machines can handle, provides the opportunity to use people in areas where the personal touch really counts; areas in which brands can differentiate on the basis of their service, personality and human touch. The ideal combination of artificial and human intelligence will see brands using machines for the simpler interactions but escalating the more complex and emotionally important decisions to a person. Machines have yet to master emotional intelligence and the value of having people with the skills and knowledge to support customers and colleagues in ‘moments of truth’ will continue to be a source of competitive advantage.

The potential use of AI and robots is just one among many important decisions businesses have to make. And, as is always the case with cutting edge developments, it is one of the least understood fields in the company boardroom. But a lack of in-house expertise is not something that needs to prevent companies engaging in and exploring the use of AI and robots. The impact it could have on the bottom line may be surprising and the lack of upfront investment required even more so.

Customer experience experts, such as Webhelp, have R&D departments with the resources and expertise to explore these developments and recommend how they could be adopted to deliver the greatest advantage for businesses. In a world where everything is connected it is very difficult to know where to start and on what to focus energy and resources. This is a maze where a guide is essential if businesses are to avoid wasting resources in the wrong areas and ensure the opportunities presented by this connected world are effectively harnessed for the benefit of the business and their customers.

 


Digital transformation is changing banking from the ground up

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Think of any industry and then think for a moment about how digital transformation is changing the marketplace. It’s easy to see that digital platforms, apps, and social networks are reforming almost every industry you choose to name. For some industries, like the media and news gathering, the change seems so profound that nobody yet understands how it may profitably function in future.

But retail banking is where almost everyone can see some of the most dramatic changes, not least because almost all of us interact with our own bank regularly. It is impossible to avoid seeing how our own banks are changing, and how new competitors are regularly launching and attempting to redefine what we think of as a retail banking service.

The challengers are all around. Clearbank is a new electronic banking service designed by the people behind payments giant Worldpay. They just received a banking license and will be launching soon. Atom Bank offers a full retail banking experience just using an app as the customer interface and for those who want the full branch experience, Metro Bank has been rewriting the rules of high street banking for the past few years.

All these new rivals have one thing in common. They are shifting their focus to the customer. They are new banking services with customer-centricity baked in right from the start. They don’t have the legacy of vast branch networks or ancient computer systems and therefore every service can be designed around what a customer expects in 2017.

This is a major challenge for the existing retail banks. They cannot immediately rise to the challenge because they have rules, processes, and procedures built up over decades. They have a history in the industry and this cannot change overnight.

But although the new “Fintech” challengers are customer-centric and offer better services that are usually cheaper than traditional banks, many customers still want access to branches. Customers are exploring the newer options, but are not flooding to fintech alternatives yet.

New research from Salesforce explored why this is happening in the UK and USA. The existing banks have their history, their brand and reputation. Customers still want to feel that they can trust their bank and many are not inclined to put their faith in an app when it comes to financial transactions, such as investments or a loan.

The banks also have millions of customers. Many have never changed their current account provider for years or decades, so there is a strong inertia that keeps people attached to the financial brands they know and feel comfortable with.

But some retail bankers and financial analysts predict that disaster may be inevitable in some key areas - usually the most profitable services. Just over a year ago, McKinsey said that services like loans and credit cards would reduce by around 60% in traditional banks inside the next decade. That’s almost two thirds of their most profitable services migrating to apps and challenger banks as the services are being designed to be customer-centric.

Retail banking is just one example of an industry where customer experience and customer expectations are redefining the industry. It may not be happening overnight, but a 60% shift in business inside a decade would be seismic, considering that brands like Barclays have been around for over 300 years.

What do you think about the Fintech challenge faced by traditional retail banks? Leave a comment below, or get in touch on LinkedIn, and let me know.