An Economist Intelligence Unit white paper Sponsored by SAP
Preface : is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Dorian Benkoil was the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the financial services executives who responded to the survey. September 29 1 Economist Intelligence Unit Limited 29
Contents Introduction Key findings 4 Conclusion 8 Appendix 1: Overall survey results 9 Appendix 2: Americas survey results 14 Appendix : Asia-Pacific survey results 19 Appendix 4: EMEA survey results 24 2 Economist Intelligence Unit Limited 29
Introduction Banks are being increasingly challenged by cautious regulators, higher capital costs and challenges to core business models, while both banks and insurers face weaker demand, hesitant consumers and calls to rethink both internal processes and customer-facing operations. At the same time, the turmoil offers both types of firms the incentive to move farther from a transactional mindset. When banks and insurers are trusted by their customers, they find it easier to tap into the knowledge and emotions that drive customer behaviour. By rebuilding trust, financial services firms can work consultatively with customers to help them meet their personal goals in a tumultuous economic environment. About the survey In July 29, the Economist Intelligence Unit surveyed 86 executives at 86 financial services firms on the challenges of getting customer-facing departments to work together consistently and effectively. Fifty-five percent were from banking, 1% from insurance, and the rest from brokers, asset managers and other types of firms. Respondents spanned the globe, with 4% from the Asia-Pacific region, % from the Americas (primarily the US) and the rest from EMEA. Finance was the best-represented function (%), but marketing (19%) and customer service and sales (24%) were also well represented. Economist Intelligence Unit Limited 29
Key findings Presenting a consistent face to the consumer The banks and insurers surveyed feel that they need to work more effectively with customers, providing a consistent customer service approach in person, on the phone, on websites and any other means. Financial services firms are more than twice as likely to cite customer service as a core strength than operational excellence or product innovation. Nevertheless, they acknowledge room for improvement to keep nervous customers on board and build long-term relationships. The need for personal contact The role of personal contact and relationships has never been more crucial. Consumers have unprecedented levels of choice and access to information. They have come to expect more transparency than ever, with real-time data and financial advice available from free or low-cost websites. Stronger consumer protection laws and the rise of consumer-oriented websites suggest that prices and sales terms will become more transparent as well. Survey respondents acknowledge this reality when 2% say that customers see their products more as commodities than five years ago. Although most say that price is not the most important factor that customers consider, they admit that price is becoming more important. Even commodity sellers have some pricing flexibility; competitive prices are the price of admission, but the ability to compete on service, convenience and other non-price factors allows some wiggle room. Increasing customer satisfaction Most respondents say higher customer satisfaction is a top-priority objective, second only to improving efficiency. Higher satisfaction leads to more opportunities to cross-sell and upsell, two areas most in need of improvement. Another way to ensure more satisfied customers is to target the right ones those who respond to the firm s value proposition at the start. Approaching the right customers allows the firm to close more sales and do a better job holding onto the customers once they have purchased. 4 Economist Intelligence Unit Limited 29
The view from financial services organisations More respondents disagree More respondents agree Customers view my organisation s products and services more as commodities now than five years ago We are more engaged in developing products or services collaboratively with customers than we were 12 months ago Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months My organisation has more flexibility than its competitors in pricing its products Compared to our competitors, my organisation s customers are more loyal My organisation prioritises sales and marketing resources based on each customer s lifetime value My organisation has an accurate way to estimate the lifetime value of customers We are currently developing a social media strategy In chosing to do business with my organisation, price is the single most important factor most customers consider -4% -2% % 2% 4% Source: Economist Intelligence Unit survey, July 29. The press for efficiency The companies surveyed also want to make their operations more efficient: 6% say this is their highest priority. All report having at least ad hoc co-ordination and integration among customer-facing units marketing, sales and customer service but few are at the highest levels of integration. Whether in gauging customer satisfaction, responding to demands or complaints, tracking leads or planning and executing campaigns, only a small minority of executives claim broad and systematic integration among departments. The problem of metrics If the old management saying, What gets measured gets done, is accurate, most banks and insurers are not doing enough to serve their most valuable customers. Fifty-eight percent of executives say that customer relationships have improved over the past year despite the global economic downturn. But it is not clear that the right relationships have been improved. Fewer than three in ten have devised an accurate way to measure the lifetime value of customers, and about the same proportion say that they prioritise resources based on lifetime value. In other words, % do not know which of their customers account for the bulk of their profits (and also Economist Intelligence Unit Limited 29
How well do customer-facing departments sales, marketing, customer services work together? Ad hoc integration Broad and systematic integration Responding to customer demands or complaints Planning and executing campaigns Gauging customer satisfaction Developing and launching new products Generating, tracking and measuring leads Incorporating customer feedback into products/services Analysing and segmenting customers Measuring effectiveness of processes -% -2% -1% % 1% 2% % 4% Source: Economist Intelligence Unit survey, July 29. offer the highest potential for cross-selling and upselling). Firms that cannot scrutinise customer-level data and model the value of customers not just customer segments, but individual customers will fall short in their efforts to improve both efficiency and customer satisfaction. How the three regions differ In terms of core strengths, institutions in all regions put customer service first, operational excellence second and innovation third. But relatively speaking, EMEA puts the most focus on customer service, Asia- Pacific on operational excellence and the Americas on innovation. Asia-Pacific Asia-Pacific institutions are more likely to point to core strengths in operational excellence. But this strength is not always apparent to the customer: Asia-Pacific institutions rate themselves relatively poorly in terms of gauging customer satisfaction and following up on complaints. They also fault themselves on their ability to cross-sell, upsell and provide a consistent customer experience. And more so than in other regions, they believe that their customer-facing units live in silos. When asked for the biggest benefits of integration, they say Making each unit aware of how others have interacted with the customer and Helping each function support the others. 6 Economist Intelligence Unit Limited 29
EMEA, Americas and Asia-Pacific regions see different benefits in integrating customer-facing functions EMEA EMEA wants to know the customer more intimately Americas Americans wants to direct resources to the most valuable customers Asia-Pacific Asia-Pacific wants to break down internal silos Knowing the customer more intimately Directing resources to the most valuable customers Breaking down internal silos % 1% 2% % 4% % 6% Source: Economist Intelligence Unit survey, July 29. EMEA EMEA institutions are most emphatic in saying that customer service is their core strength. EMEA institutions are good at following up on complaints, gauging customer satisfaction and building long-term relationships. They are intensely curious about customers. When asked about the benefits of integrating customer-facing silos, they are most likely to cite the ability to develop a rich and deep profile of customer behaviour. Of all the regions, EMEA is most focused on personal service. Americas More so than other regions, institutions in the Americas focus on measurement: they say that they are good at targeting the right customers measuring the results of promotional campaigns. However, they are frustrated by their inability to forecast the lifetime value of customers, and believe that the biggest benefit from integration will be the ability to identify and prioritise these customers. At the same time, as big institutions get bigger, many mid-size and smaller institutions in the region are having difficulty finding the capital to invest in measurement. Economist Intelligence Unit Limited 29
Conclusion With incomes starting to inch up again and the financial markets stabilising, consumers are ready to trust the banks and insurers that have shown themselves worthy. In the US, many banks as well as a few insurers are battling the perception that they have violated their social contracts by taking government money while acting unfairly towards their customers. To retain customers, banks and insurers must present a consistent experience and message with every interaction. They need to use those interactions to identify key prospects, while gathering information to improve service and sales. In particular, these firms need to: Align the sales, marketing and customer services departments to provide a consistent experience to customers. Accept the realities of commoditisation and price transparency. Give customers a value proposition that goes beyond economic self-interest. Do a better job of analysing customers, measuring lifetime value, and providing a high level of service to high-value customers. Gain experience with social media (only % of institutions are doing so). Many customers, especially older customers, may not belong to online communities. But the customers of the future do, and small efforts applied consistently today can make a big difference tomorrow. In simple terms, banks and insurers need to listen to individual customers and effectively use what they ve learned. A study published recently in the Journal of Financial Services Marketing finds that customer perception of listening effectiveness is positively and strongly associated with service quality, trust, satisfaction, purchase intentions and sales performance. By listening carefully and integrating what they learn across internal channels, financial services firms will better meet the needs of their customers, rebuild trust, and improve their own performance. 8 Economist Intelligence Unit Limited 29
Appendix 1 Overall survey results Appendix: Overall survey results Percentages may not add to 1% due to rounding or the ability of respondents to choose multiple responses. In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to clients Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services 22 1 9 Each of the organisation s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to. 1. No coordination; 2. Ad hoc coordination;. Some procedures 4. Procedures. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 22 6 9 Developing and launching new products 19 22 16 2 Planning and executing campaigns 2 1 2 4 14 Analysing and segmenting customers 8 16 2 1 1 Gauging customer satisfaction 16 26 9 9 2 Measuring effectiveness of processes 8 26 2 1 Responding to customer demands or complaints 11 22 46 14 1 Incorporating customer feedback into products/services 9 21 26 28 1 1 11 11 11 8 9 Economist Intelligence Unit 29
Appendix 1 Overall survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most customers consider 66 1 Compared to our competitors, my organisation s customers are more loyal 44 19 My organisation has an accurate way to estimate the lifetime value of customers 1 My organisation prioritises sales and marketing resources based on each customer s lifetime value 1 1 We are currently developing a social media strategy 48 19 My organisation has more flexibility than its competitors in pricing its products 44 42 1 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 61 2 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 4 1 Customers view my organisation s products and services more as commodities now than five years ago 1 9 1 Our margins are higher than the margins of most of our competitors 1 4 22 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Cross-selling or upselling customers Providing a consistent customer experience Segmenting and profiling customers Targeting the right customers in order to close a high percentage of prospects Measuring/optimising effectiveness of marketing and promotional campaigns 2 Generating qualified leads 26 Gathering customer intelligence in the course of providing service 26 Building long-term relationships 24 Efficiently acquiring customers (eg, reducing the cost of sales) 22 Maximising the number of repeat sales 2 Measuring customer satisfaction and loyalty 2 Ensuring that customer complaints are resolved quickly 1 Involving customers product/service development (eg, co-creation) 1 Creating effective collateral 8 Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Presenting customers with a consistent picture of the organisation Developing and sharing a detailed picture of customers, behaviour and preferences 4 Prioritising resources directed towards customers by total value over life of customer Making each unit aware of how the others have interacted with a given customer Helping each function find and act on ways to support the others Integrating customer tracking from lead through post-sales service Establishing common definitions, assumptions and data 26 Measuring the probability that leads will turn into sales, and using these scores to guide sales 16 Our company sees no need to integrate our marketing, sales and service activities 1 /Not applicable 42 1 Economist Intelligence Unit 29
Appendix 1 Overall survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. Global economic downturn Changing customer requirements 4 Finding access to credit/capital Significant demand shifts for our products/services 26 Emergence of new competitors Focusing on sustainability efforts Emergence of new markets for our products and services 16 Disruptive technology developments Accessing key components or resources through our supply chain 6 8 Which customer characteristics does your organisation most use to segment your customer base and prioritise marketing activities? Select up to three. Number and type of products used Household net worth (even if held with other institutions) Length of relationship Average balance Age 22 Primary channel used to deal with bank (online, teller, call center) 19 Gender 1 Ethnicity 11 8 41 In which of the following ways does your organisation empower retailers and distributors? Select all that apply. Improving online or self-service product support tools 4 Improving usability, search and navigation of customer-facing websites 4 Making prices and sales terms more transparent for easy comparability 41 Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) Building or supporting online customer communities 2 1 If you expect changes in financial regulations, what do you expect the impact will be? More customer education to inform them about the portfolio choices and associated risks Re-alignment of internal product development and marketing units to address financial regulations 2 No impact yet on front-office customer management processes 1 We do not expect changes in financial regulations 11 4 9 11 Economist Intelligence Unit 29
Appendix 1 Overall survey results Please indicate whether you agree or disagree with these statements about the channels used by your customers. The role of the branch channel and personal advisors facilitating in-person customer meetings has increased due to the financial crisis 64 6 The channel(s) used by customers depend(s) largely on the age of the customer 64 6 Our customers are increasingly using automated channels (rather than in-person channels) not just for transactions, but to resolve problems as well 64 6 Social networking sites ( eg, Twitter, Facebook) are influencing choices made by customers of financial services institutions 6 Regardless of the channel used to contact us, our customers receive a consistent brand message and quality of service 68 2 Agree Disagree How important will each of the following objectives be to your institution over the coming year? Top priority objective Medium priority objective Low priority objective Not an objective Cut costs 6 12 2 Raise efficiency 64 1 4 1 Increase fee-based revenues 4 6 12 9 2 Increase interest margins 26 21 Increase customer satisfaction 4 2 1 1 Achieve or maintain regulatory compliance 4 12 1 Improve supplier relationships 26 26 29 2 In which region are you personally based? In which area of financial services do primarily work in? Asia-Pacific North America Western Europe Middle East and Africa 9 Latin America Eastern Europe 4 1 2 41 Banking Insurance 2 12 Economist Intelligence Unit 29
Appendix 1 Overall survey results Which of the following best describes your title? Board member 1 CEO/President/Managing director CFO/Treasurer/Comptroller 6 CIO/Technology director 1 C-level executive 1 SVP/VP/Director Head of Business Unit Head of Department Manager 8 22 24 What are your organisation s global annual revenues in US dollars? Who are your organisation s primary customers? $m or less $m to $1bn $1bn to $bn $bn to $1bn $1bn or more 44 11 8 29 What are your main functional roles? Please choose no more than three functions. Finance Risk General management Strategy and business development Marketing Customer service 14 Operations and production 9 Sales 9 Information and research 8 IT 6 Legal R&D 4 Procurement 2 Human resources 2 Supply-chain management 1 19 29 4 Business-to-business Consumer/retail Both Which perspective consumer/retail or business-to-business are you sharing in this survey? Consumer/retail Business-to-business 44 24 2 4 46 1 Economist Intelligence Unit 29
Appendix 2 Americas survey results Appendix: Americas survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to clients Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services 4 2 2 1 Each of the organisation s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to. 1. No coordination; 2. Ad hoc coordination;. Some procedures 4. Procedures. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 1 4 Developing and launching new products 2 2 2 Planning and executing campaigns 1 4 1 Analysing and segmenting customers 2 2 1 Gauging customer satisfaction 1 1 2 4 Measuring effectiveness of processes 1 2 2 Responding to customer demands or complaints 4 1 Incorporating customer feedback into products/services 1 2 6 14 Economist Intelligence Unit 29
Appendix 2 Americas survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most customers consider 6 Compared to our competitors, my organisation s customers are more loyal 4 4 1 My organisation has an accurate way to estimate the lifetime value of customers 2 6 1 My organisation prioritises sales and marketing resources based on each customer s lifetime value 2 46 21 We are currently developing a social media strategy 4 2 My organisation has more flexibility than its competitors in pricing its products 41 4 14 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 48 4 1 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 62 28 1 Customers view my organisation s products and services more as commodities now than five years ago 4 Our margins are higher than the margins of most of our competitors 4 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Targeting the right customers in order to close a high percentage of prospects 4 Measuring/optimising effectiveness of marketing and promotional campaigns Providing a consistent customer experience Segmenting and profiling customers 2 Cross-selling or upselling customers 2 Building long-term relationships 2 Efficiently acquiring customers (eg, reducing the cost of sales) 2 Measuring customer satisfaction and loyalty 2 Generating qualified leads 2 Involving customers product/service development (eg, co-creation) 1 Maximising the number of repeat sales 1 Gathering customer intelligence in the course of providing service 1 Ensuring that customer complaints are resolved quickly 1 Creating effective collateral, please specify Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Developing and sharing a detailed picture of customers, behaviour and preferences Prioritising resources directed towards customers by total value over life of customer Presenting customers with a consistent picture of the organisation Integrating customer tracking from lead through post-sales service Helping each function find and act on ways to support the others Making each unit aware of how the others have interacted with a given customer 1 Measuring the probability that leads will turn into sales, and using these scores to guide sales 1 Establishing common definitions, assumptions and data 1 Our company sees no need to integrate our marketing, sales and service activities /Not applicable 4 4 1 Economist Intelligence Unit 29
Appendix 2 Americas survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. Global economic downturn Finding access to credit/capital 4 Significant demand shifts for our products/services Changing customer requirements 2 Focusing on sustainability efforts 1 Emergence of new markets for our products and services 1 Emergence of new competitors 1 Disruptive technology developments Accessing key components or resources through our supply chain 1 8 Which customer characteristics does your organisation most use to segment your customer base and prioritise marketing activities? Select up to three. Average balance Number and type of products used Household net worth (even if held with other institutions) Length of relationship Age 1 Primary channel used to deal with bank (online, teller, call center) 1 Gender Ethnicity 2 4 4 In which of the following ways does your organisation empower retailers and distributors? Select all that apply. Improving usability, search and navigation of customer-facing websites Improving online or self-service product support tools 4 Making prices and sales terms more transparent for easy comparability Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) Building or supporting online customer communities 2 1 If you expect changes in financial regulations, what do you expect the impact will be? Re-alignment of internal product development and marketing units to address financial regulations 8 More customer education to inform them about the portfolio choices and associated risks 1 No impact yet on front-office customer management processes 14 We do not expect changes in financial regulations 14 16 Economist Intelligence Unit 29
Appendix 2 Americas survey results Please indicate whether you agree or disagree with these statements about the channels used by your customers. The role of the branch channel and personal advisors facilitating in-person customer meetings has increased due to the financial crisis 6 4 The channel(s) used by customers depend(s) largely on the age of the customer Our customers are increasingly using automated channels (rather than in-person channels) not just for transactions, but to resolve problems as well 2 Social networking sites ( eg, Twitter, Facebook) are influencing choices made by customers of financial services institutions 6 Regardless of the channel used to contact us, our customers receive a consistent brand message and quality of service 6 Agree Disagree How important will each of the following objectives be to your institution over the coming year? Top priority objective Medium priority objective Low priority objective Not an objective Cut costs 4 1 Raise efficiency Increase fee-based revenues 9 1 1 14 Increase interest margins 1 2 Increase customer satisfaction 1 Achieve or maintain regulatory compliance Improve supplier relationships 1 2 4 1 In which region are you personally based? In which area of financial services do primarily work in? North America Latin America 2 Asia-Pacific Eastern Europe Western Europe Middle East and Africa Banking Insurance 4 2 1 Economist Intelligence Unit 29
Appendix 2 Americas survey results Which of the following best describes your title? Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director C-level executive SVP/VP/Director Head of Business Unit Head of Department Manager 1 28 28 What are your organisation s global annual revenues in US dollars? Who are your organisation s primary customers? $m or less $m to $1bn $1bn to $bn $bn to $1bn $1bn or more 4 4 11 2 What are your main functional roles? Please choose no more than three functions. Risk Finance Strategy and business development General management Marketing Customer service Sales 1 Operations and production 1 Information and research Legal IT R&D Procurement Human resources Supply-chain management 1 2 4 Business-to-business Consumer/retail Both Which perspective consumer/retail or business-to-business are you sharing in this survey? Business-to-business Consumer/retail 4 2 6 8 Economist Intelligence Unit 29
Appendix Asia-Pacific survey results Appendix: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to clients Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services 28 1 8 Each of the organisation s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to. 1. No coordination; 2. Ad hoc coordination;. Some procedures 4. Procedures. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 8 2 2 1 Developing and launching new products 1 2 4 1 Planning and executing campaigns 2 28 4 8 Analysing and segmenting customers 1 1 26 44 8 Gauging customer satisfaction 2 8 Measuring effectiveness of processes 8 2 8 Responding to customer demands or complaints 1 1 2 4 1 Incorporating customer feedback into products/services 1 28 28 2 8 14 14 14 29 29 19 Economist Intelligence Unit 29
Appendix Asia-Pacific survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most customers consider 68 Compared to our competitors, my organisation s customers are more loyal 4 4 2 My organisation has an accurate way to estimate the lifetime value of customers 28 6 1 My organisation prioritises sales and marketing resources based on each customer s lifetime value 1 We are currently developing a social media strategy 4 1 My organisation has more flexibility than its competitors in pricing its products 4 4 1 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 6 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 8 8 Customers view my organisation s products and services more as commodities now than five years ago 8 1 Our margins are higher than the margins of most of our competitors 6 4 1 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Providing a consistent customer experience 4 Cross-selling or upselling customers 4 Segmenting and profiling customers 8 Gathering customer intelligence in the course of providing service Targeting the right customers in order to close a high percentage of prospects 28 Generating qualified leads 2 Measuring/optimising effectiveness of marketing and promotional campaigns 2 Efficiently acquiring customers (eg, reducing the cost of sales) 2 Maximising the number of repeat sales 2 Building long-term relationships 2 Measuring customer satisfaction and loyalty 2 Ensuring that customer complaints are resolved quickly Involving customers product/service development (eg, co-creation) 1 Creating effective collateral 8 Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Making each unit aware of how the others have interacted with a given customer Presenting customers with a consistent picture of the organisation 4 Helping each function find and act on ways to support the others 8 Prioritising resources directed towards customers by total value over life of customer 8 Integrating customer tracking from lead through post-sales service Developing and sharing a detailed picture of customers, behaviour and preferences Establishing common definitions, assumptions and data 28 Measuring the probability that leads will turn into sales, and using these scores to guide sales 1 Our company sees no need to integrate our marketing, sales and service activities /Not applicable 4 2 Economist Intelligence Unit 29
Appendix Asia-Pacific survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. Global economic downturn Changing customer requirements 4 Finding access to credit/capital 2 Emergence of new competitors 2 Significant demand shifts for our products/services 2 Focusing on sustainability efforts 2 Emergence of new markets for our products and services 1 Disruptive technology developments 8 Accessing key components or resources through our supply chain 8 Which customer characteristics does your organisation most use to segment your customer base and prioritise marketing activities? Select up to three. Number and type of products used Length of relationship 4 Household net worth (even if held with other institutions) 8 Age 2 Average balance 2 Primary channel used to deal with bank (online, teller, call center) 2 Gender Ethnicity 8 4 In which of the following ways does your organisation empower retailers and distributors? Select all that apply. Improving online or self-service product support tools Making prices and sales terms more transparent for easy comparability 4 Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) 4 Improving usability, search and navigation of customer-facing websites 8 Building or supporting online customer communities 2 If you expect changes in financial regulations, what do you expect the impact will be? More customer education to inform them about the portfolio choices and associated risks Re-alignment of internal product development and marketing units to address financial regulations No impact yet on front-office customer management processes 1 We do not expect changes in financial regulations 48 21 Economist Intelligence Unit 29
Appendix Asia-Pacific survey results Please indicate whether you agree or disagree with these statements about the channels used by your customers. The role of the branch channel and personal advisors facilitating in-person customer meetings has increased due to the financial crisis 6 The channel(s) used by customers depend(s) largely on the age of the customer 69 1 Our customers are increasingly using automated channels (rather than in-person channels) not just for transactions, but to resolve problems as well 8 4 Social networking sites ( eg, Twitter, Facebook) are influencing choices made by customers of financial services institutions 6 Regardless of the channel used to contact us, our customers receive a consistent brand message and quality of service Agree Disagree How important will each of the following objectives be to your institution over the coming year? Top priority objective Medium priority objective Low priority objective Not an objective Cut costs 2 Raise efficiency 6 8 Increase fee-based revenues 8 48 8 8 Increase interest margins 2 2 2 Increase customer satisfaction 1 Achieve or maintain regulatory compliance 4 8 Improve supplier relationships 2 2 2 In which region are you personally based? In which area of financial services do primarily work in? Asia-Pacific Latin America North America Eastern Europe Western Europe Middle East and Africa 1 Banking Insurance 1 1 22 Economist Intelligence Unit 29
Appendix Asia-Pacific survey results Which of the following best describes your title? Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director C-level executive 8 SVP/VP/Director Head of Business Unit 8 Head of Department 8 Manager 2 28 What are your organisation s global annual revenues in US dollars? Who are your organisation s primary customers? $m or less $m to $1bn $1bn to $bn $bn to $1bn $1bn or more 6 1 1 8 What are your main functional roles? Please choose no more than three functions. Business-to-business Consumer/retail 4 28 General management Finance Risk Strategy and business development Marketing Operations and production 1 Sales 1 Customer service 1 Information and research 8 IT Legal R&D Supply-chain management Human resources Procurement 2 28 Both Which perspective consumer/retail or business-to-business are you sharing in this survey? Consumer/retail Business-to-business 6 8 2 Economist Intelligence Unit 29
Appendix 4 EMEA survey results Appendix: Europe Middle East and Africa survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to clients Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services 68 11 4 Each of the organisation s customer-facing departments influences the customer via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to. 1. No coordination; 2. Ad hoc coordination;. Some procedures 4. Procedures. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Generating, tracking and measuring leads 11 14 11 2 11 21 Developing and launching new products 4 14 9 Planning and executing campaigns 21 11 9 21 Analysing and segmenting customers 29 4 11 4 Gauging customer satisfaction 11 19 44 1 4 Measuring effectiveness of processes 4 22 41 4 Responding to customer demands or complaints 1 6 19 4 Incorporating customer feedback into products/services 21 29 21 4 11 11 8 24 Economist Intelligence Unit 29
Appendix 4 EMEA survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most customers consider 6 64 Compared to our competitors, my organisation s customers are more loyal 4 2 21 My organisation has an accurate way to estimate the lifetime value of customers 9 9 21 My organisation prioritises sales and marketing resources based on each customer s lifetime value 29 21 We are currently developing a social media strategy 2 46 29 My organisation has more flexibility than its competitors in pricing its products 46 4 11 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 68 29 4 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 4 2 2 Customers view my organisation s products and services more as commodities now than five years ago 4 46 11 Our margins are higher than the margins of most of our competitors 2 46 29 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Cross-selling or upselling customers 6 Generating qualified leads 2 Segmenting and profiling customers 2 Building long-term relationships 2 Gathering customer intelligence in the course of providing service 2 Targeting the right customers in order to close a high percentage of prospects 29 Maximising the number of repeat sales 2 Providing a consistent customer experience 21 Creating effective collateral Measuring/optimising effectiveness of marketing and promotional campaigns Efficiently acquiring customers (eg, reducing the cost of sales) Ensuring that customer complaints are resolved quickly Measuring customer satisfaction and loyalty Involving customers product/service development (eg, co-creation) 14 Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Developing and sharing a detailed picture of customers, behaviour and preferences 4 Presenting customers with a consistent picture of the organisation Making each unit aware of how the others have interacted with a given customer 4 Establishing common definitions, assumptions and data 6 Prioritising resources directed towards customers by total value over life of customer 2 Helping each function find and act on ways to support the others 2 Integrating customer tracking from lead through post-sales service 21 Measuring the probability that leads will turn into sales, and using these scores to guide sales Our company sees no need to integrate our marketing, sales and service activities /Not applicable 2 Economist Intelligence Unit 29
Appendix 4 EMEA survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. Global economic downturn Changing customer requirements Finding access to credit/capital 29 Emergence of new markets for our products and services 21 Significant demand shifts for our products/services 21 Emergence of new competitors Focusing on sustainability efforts Accessing key components or resources through our supply chain Disruptive technology developments 4 9 Which customer characteristics does your organisation most use to segment your customer base and prioritise marketing activities? Select up to three. Number and type of products used Length of relationship Household net worth (even if held with other institutions) 6 Age 2 Average balance 2 Primary channel used to deal with bank (online, teller, call center) 14 Gender Ethnicity 11 11 9 9 In which of the following ways does your organisation empower retailers and distributors? Select all that apply. Improving online or self-service product support tools 4 Investing in self-service tools across multiple channels (eg, web, mobile devices, e-mail, point of sale) 9 Making prices and sales terms more transparent for easy comparability 9 Improving usability, search and navigation of customer-facing websites 6 Building or supporting online customer communities 29, please specify 14 If you expect changes in financial regulations, what do you expect the impact will be? More customer education to inform them about the portfolio choices and associated risks We do not expect changes in financial regulations 29 Re-alignment of internal product development and marketing units to address financial regulations 2 No impact yet on front-office customer management processes 11 6 26 Economist Intelligence Unit 29
Appendix 4 EMEA survey results Please indicate whether you agree or disagree with these statements about the channels used by your customers. The role of the branch channel and personal advisors facilitating in-person customer meetings has increased due to the financial crisis 68 2 The channel(s) used by customers depend(s) largely on the age of the customer Our customers are increasingly using automated channels (rather than in-person channels) not just for transactions, but to resolve problems as well 6 Social networking sites ( eg, Twitter, Facebook) are influencing choices made by customers of financial services institutions 26 4 Regardless of the channel used to contact us, our customers receive a consistent brand message and quality of service Agree Disagree How important will each of the following objectives be to your institution over the coming year? Top priority objective Medium priority objective Low priority objective Not an objective Cut costs 4 4 4 Raise efficiency 4 26 Increase fee-based revenues 2 46 14 Increase interest margins 19 22 19 4 Increase customer satisfaction 29 14 Achieve or maintain regulatory compliance 6 11 4 Improve supplier relationships 29 2 2 4 In which region are you personally based? In which area of financial services do primarily work in? Western Europe Middle East and Africa Eastern Europe 14 Asia-Pacific Latin America North America 2 4 Banking Insurance 4 21 6 2 Economist Intelligence Unit 29
Appendix 4 EMEA survey results Which of the following best describes your title? Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director 4 C-level executive SVP/VP/Director Head of Business Unit Head of Department 4 Manager 11 11 11 14 21 What are your organisation s global annual revenues in US dollars? Who are your organisation s primary customers? $m or less $m to $1bn $1bn to $bn $bn to $1bn $1bn or more 46 21 What are your main functional roles? Please choose no more than three functions. Business-to-business Consumer/retail 2 Finance General management Risk Strategy and business development Marketing Customer service IT 11 Information and research 11 R&D Operations and production 4 Sales 4 Procurement 4 Legal 4 Supply-chain management Human resources 4 21 29 2 6 Both Which perspective consumer/retail or business-to-business are you sharing in this survey? Consumer/retail Business-to-business 41 6 8 28 Economist Intelligence Unit 29
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