BEYOND BIG DATA 6 STEPS TO MAPPING THE RETAIL BANKING CUSTOMER JOURNEY BY: CINDY RANDAZZO, CHIEF STRATEGY OFFICER, SOURCELINK

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1 BEYOND BIG DATA 6 STEPS TO MAPPING THE RETAIL BANKING CUSTOMER JOURNEY BY: CINDY RANDAZZO, CHIEF STRATEGY OFFICER, SOURCELINK 1

2 Beyond big data 6 steps to mapping the retail banking customer journey Part one: The need for a new approach The disconnected customer To say customer loyalty in retail banking is at an all-time low is an understatement. Long before the economic decline of 2008, customers began showing signs of indifference as technology allowed them to interact with financial institutions in new and often impersonal ways. Never before has the divide between the brick-and-mortar financial institution and the tech-savvy customer been so prominent. And never before has the challenge for retail banks to keep customers truly engaged with their brands been so great. Mindset of today s customer The introduction of online banking in the early 2000s changed the game. Direct deposit, online bill pay and funds transfer could now be accomplished without ever setting foot in a branch. Fast-forward to just a few years ago when widespread acceptance of mobile check deposit became yet another convenience, making the disconnect between customer and banker even more pronounced. These technology advancements, coupled with soured consumer sentiment resulting from the recent economic collapse, created a recipe for customer retention disaster. Customers have grown accustomed to immediate access to just about anything, and are no longer willing to make allowances for organizational inefficiencies or unnecessary complexity. They want what they want, when they want it and expect organizations banks included to anticipate their needs even before they re expressed. Beyond big data Just a few short years ago, the big data buzz filled conference agendas and boardroom discussions around the world. Many made impressive strides in centralizing various data points and in improving analytics and modeling. Customers could be more easily put into buckets based on behavior, both past and predictive. However, few companies gained a true understanding of why their customers acted the way they did. First, continually changing regulatory requirements add a unique layer of complexity to customer acquisition for retail banks. Recent limitations on audience selection strategies make it more difficult to reach potentially profitable segments. Banks must work smarter to find the best customers while remaining compliant. Second, even if the bank reaches their ideal prospects, converting them to long-term, profitable customers is a high hurdle. Low interest rates and fee reductions have limited household revenue potential. Getting customers in the door isn t enough. Banks must maximize the relationship early on and keep customers loyal. 2

3 A recent Accenture analysis suggests that unless they become more agile, full-service retail banks could lose as much as 35 percent of their market share by 2020 much of it to the digital disruptors. 1 Third, technology advancements (often known as digital disruptors ) have put control squarely in the hands of the customer. The Millennial generation, in particular, demands more convenience and online options. They expect more of a relationship mentality from their banks. They are willing to provide an impressive amount of data on themselves, but only if there s a clear benefit to them. Walk the walk So, how will banks compete? The key is to start thinking like the customer. What has historically been true in most retail settings is now true in banking customers are only as loyal as their last bad experience. Banks must take an inside-out view of customers, considering them partners in the journey, not merely accounts to be sold. Financial institutions that wish to improve must first ask some revealing questions. Do their customers: Believe the bank knows the type of relationship they want to have? Have access to the products and services they deem most relevant? Experience the same level of service at every interaction whether online, on the phone or in person? Recommend them without a prompt? The last bullet may feel like a lofty goal but if the bank is achieving the other three, net promoter scores should ideally take care of themselves. Successful banks take an honest, inward look at their organizations, stepping into their customers shoes and experiencing their own organization through the lens of the customer. It shows them where they re doing well, but most importantly where they re not. The process of identifying and addressing gaps whether in marketing, customer service or product innovation enables banks to create a consistent, personal and profitable relationship with customers at every interaction. 1 Accenture Industry Report: Digital disruptors: how banking got agile. Part two: Mapping the customer journey Customer journey mapping may feel like the latest in business buzz words. In fact, without proper focus and intention, it has the potential to result in just another program du jour that yields little business benefit. But when done right, customer journey maps serve to shape the entire organization and give existing and prospective customers valid reasons to remain loyal. This paper offers guidance on the journey mapping process, providing six keys to success. Some strategies are specific to retail banking but most could be applied to nearly any B2C organization. Step one: Identify key customer touch points By identifying all points of interaction with the brand, a bank can begin the process of determining its strengths and weaknesses in terms of customer perception. Banks can begin by evaluating key customer touchpoints, to identify strengths and flaws in the organization that could make or break the 3

4 customer relationship. Whether they use the drive-thru, visit multiple branches or even an ATM, customers expect the experience to be the same and they expect it to be stellar. Brick and mortar The appearance of your physical location has a lasting impression on customers. However, customers consider more than the front entrance when forming impressions. The way they are greeted, how long they have to wait, how well tellers anticipate their needs and the familiarity of tellers with out-of-branch services all influence customer perceptions. ATM and satellite offices For most consumer businesses, multichannel is now the norm in service delivery. Yet, some organizations fail to pay proper attention to omnichannel, which is the continuity of the branded experience across channels. ATMs and satellite offices offer a huge opportunity to crystalize the brand message or promote new offers if data is shared across platforms, employees are consistently trained and if marketing considers these remote locations core to the brand experience. Online According to a McKinsey & Company report 2, 65 percent of customers interact with their banks through multiple channels. Interestingly though, the report finds that customers who use mobile and online banking more than once a week are over 60 percent more likely to be active retail branch users than those who do not. So, online interactions cannot be viewed as discrete from the rest of the organization. Complicating things, the online experience has now been subdivided into website and mobile experiences. Firms that have still not created distinctly mobile sites will lose when frustrated customers cannot perform basic tasks quickly and easily in a mobile-friendly environment. Just as important, information presented online must match what customers hear in the branch or from the call center so that they presume the entire organization is working in concert in their best interest. 2 McKinsey & Company report: The future of US retail-banking distribution Call center Today s call centers must be viewed as more than just problem centers; they also provide an opportunity to strengthen the customer relationship. When appropriate, agents can offer additional services and act as true cross-sell catalysts, assuming they are privy to the same details on current promotions as branch employees. Call center staff must represent the bank in knowledge and enthusiasm, regardless of whether they are bank employees or an outsourced arm of the bank. Marketing Most marketing is still focused on outbound offers to prospective and current customers for various products and services. But the prevalence of data available that reveals customers true desires has made marketing more personal. How targeted are the marketing efforts, within regulation guidelines? Are marketing efforts supported consistently across all channels? Is the organization responding to social media or other voice-of-the-customer channels when developing new offers? This knowledge should affect the cadence and frequency of marketing messages. Once the organization has identified all of the primary points of interaction and conducted a baseline assessment of its performance in each, it s time to choose a starting point for mapping the customer journey. Step two: Select a discrete path One of the biggest mistakes a company can make when mapping the customer journey is to bite off more than it can chew. While every interaction is important, not every one is broken. For example, if the institution isn t growing as quickly as it wants, it is best served by first determining where the breakdown appears to be starting. 4

5 Perhaps data around customer acquisition and onboarding processes shows the expected results. However, once customers have engaged, their interactions slow, or worse, stop all together. The first 90 days is most critical to a bank s ability to increase customer value, this journey is often a great starting point. Another example involves cross selling. If data shows a decline in cross-sell revenue, the problem could be in a number of areas. Perhaps tellers aren t suggesting additional services. Or, maybe the website doesn t include the most current offers. Even if these two areas are working, it s possible that campaigns are missing the mark because the timing and tone are off mark. Mapping the entire cross-sell process isn t discrete enough. However, taking a cursory review of cross-selling efforts and looking for holes can point to specific steps that should be mapped. The customer acquisition process, as a whole, is too broad to map as well. Let s say a customer receives a direct mail piece - she might first go to the website instead of the landing page you suggested, or she may even walk into a branch simply because it is convenient. Mapping all of these potential interactions is complex, time consuming and likely futile. So making mapping an acquisition process discrete is really about acquisition for a specific product/service versus trying to take pieces of the acquisition. Instead, banks should select a discrete step or two in that journey so that findings are more actionable. General mapping leads to general recommendations, which typically leads to zero change and improvement. The more distinct the steps in the journey, the more likely specific recommendations can be implemented and affect lasting change. Step three: Map the customer s steps Finally, it s time to map the customer journey. To create the most meaningful maps, organizations must truly immerse themselves in the world of their customers. They must remove their corporate hats and challenge themselves to think and act like their customers. The journey is about visually understanding the interaction between the bank and the customer. Regardless of the methodology or mapping tactics used, journeys must have a clear beginning and end. The company should decide if the journey being mapped would be current or future state. Customer journey mapping is a collaborative process. It begins with bringing a customer persona to life by creating a visual representation of the journey from the customer s perspective - focusing on moments of truth, pain points, bright spots or missed opportunities for engagement. Mapping two or three different personas on the same journey allows organizations to discover the differences within their customer base. For example, one persona may move quickly from discover to explore modes and ultimately to purchase. Yet another persona may move slowly through the cycle. Using multiple personas underscores the fact that customer journeys are typically very personal. Step four: Identify areas for improvement As a final step of mapping, organizations should retrace the journey and confirm findings. This working document can then be socialized with and validated by various departments. This step effectively forces the company to put a magnifying glass on pain points and confirm or more accurately identify the breakdown from the perspective of a team member closer to the customer. Based on findings, leaders identify opportunities for improvement that are aligned with the company s objectives. For example, if the objective of the journey is improved consumer engagement, recommendations might address changes in interactions by channel, explore engagement devices within marketing communications or identify opportunities to leverage data insights into improved relevancy. 5

6 Step five: Make organizational changes Ideally the customer journey is a conversation where customers clearly articulate their wants and the bank responds to those needs. However, if all departments and channels are not working in unison, the conversation has the potential to restart a number of times, setting the relationship back each time. Once problem areas are revealed, the process of addressing them can be the greatest challenge. For many organizations, key departments rarely interact with one another. So, calling them together under the guise of problem solving can lead to finger pointing if left unchecked. For real change to take hold, the company must gain consensus and commitment from all departments to put the needs and experiences of the customer first. Step six: Monitor and measure As with any process change, it s critical to determine up front how success will be measured. Improvement must be measurable by business data, whether in terms of sales volume, customer attrition, cross-sell improvement or some combination. Whenever possible, measure household revenue before and after customercentric strategies are implemented. Look for increases and pay particular attention when expected increases still don t materialize. No doubt, something in the communication process is still broken. Although the customer journey affects the entire organization, understanding how, where and when the experience was most effective helps organizations learn from marketing investments and develop a better sense of ROI from marketing programs, product development or other investments. Customer journey mapping encourages disparate channels to talk to one another. With a robust CRM system or marketing database, firms can connect the dots between channels as interactions happen, and allow for a 360-degree view of both customers and prospects. Part three: Conclusion In order to compete, banks must abandon inside-out concepts like gaining share of wallet and instead focus on strategies that encourage customers to choose them. By successfully building a brand voice that is consistent across all platforms, banks will be there when customers want something and stand a better chance of customers choosing them. Successful companies will nurture customers over time and build relationships. They will no longer view customers as accounts. Instead they will assign a relationship value to their customers and show authentic signs of listening and responding to them. After all, with so little differentiation across financial institutions, it is the customer experience that most often separates a bank from its competitors. With exceptional customer nurture comes exceptional customer advocacy. In the age of the customer, the power of a positive referral, whether through social media or in face-to-face interaction, absolutely cannot be underrated. All of this said, insight without action is useless. Banks that map the customer journey and subsequently develop a better understanding of their customers need to take action. For customers, seeing and experiencing change from this altruistic effort will make it clear that the bank is focused on their needs and desires in every aspect of its operations. Successful banks will encourage a continual and open dialog with their customers, not just at survey time. They will tell customers they re evaluating their ability to serve them better and ask them what they think. This direct feedback will be the most powerful and meaningful data at the strategy table. Even if customers don t respond, they at least know the bank cares and are likely to share that perception with others. 6

7 Likewise, healthy organizations will empower and motivate employees to think like the customer. They will encourage employees to regularly shop all channels and services as if they were the customer and they will incent them to report on breakdowns in the relationship and reward them for making improvements. Amazingly, many organizations don t reserve a seat for the most important entity at the strategy table the customer. Banks need not only acknowledge the customer at the table but commit to a if it s not good for the customer, it is not good for the bank mentality if they truly hope to build long-term customer loyalty. About SourceLink SourceLink, a top-ranked Direct Marketing agency, creates results-driven communication solutions. Combining strengths in marketing analytics, data intelligence, technology and production expertise, SourceLink crafts and executes data-driven direct marketing and document outsourcing solutions. SourceLink s analytic and communication solutions improve marketing ROI through greater relevance and increased response. On the production side, SourceLink solutions reduce costs through more efficient operations and postal optimization. SourceLink operates in four U.S. locations. For more information, visit 7