Why cx matters to fs customers part of the 2015 lexden masterclass series in cx fs
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The document discusses the importance of customer experience (CX) in financial services, emphasizing the impact of brands and consumer psychology on purchasing decisions. It highlights changing consumer behaviors and expectations due to technological advancements and suggests new engagement models for businesses. Key strategies for enhancing CX include creating a common organizational purpose, understanding customers holistically, and viewing exceptional service as an economic asset.
Why cx matters to fs customers part of the 2015 lexden masterclass series in cx fs
- 1. 30th October 2015 Part of LEXDEN’S MASTERCLASS IN FINANCIAL SERVICES CUSTOMER EXPERIENCE WHY CX MATTERS TO FINANCIAL SERVICES CUSTOMERS Presented by Tom Kerr FMRS, Head of Insight, Lexden
- 2. We are creatures of habit • Daniel Kahneman • System 1 thinking = unconscious, habitual, effort-less • System 2 thinking = conscious, considered, effort-full • The power of brands • The positive associations which we attach to an organisation, product, or service make it easy for us at purchase time and beyond • ‘if I buy Apple products I am a cool cat who is up with the times’ • ‘I feel smug when people ask me where I got my (Primark) dress’ The same participant went on to say, ‘buying dresses from Primark means I can buy a handbag from Mulberry’ She then said, ‘my boyfriend has no idea how much it costs’ 08/11/2015 LEXDEN
- 3. It’s about how it made her feel!! Just a little bit smug Significant Smart with money Progressing 08/11/2015 LEXDEN
- 4. The power of brands 08/11/2015 LEXDEN High Price QualityLow High Whichbrandsareyouwillingtopaymorefor? Trust Ethics Reward Provenance Authenticity Transparency
- 5. Meeting customer needs Care Identity Belonging 08/11/2015 LEXDEN Help me Know me Listen to me The BBC programming has tapped into consumer trends really well Busy lives Cautious spending Reward - quality of life make life easier/better
- 6. Using the retail sector for context The retail story • 1970’s and 1980s • Pile it high and sell it cheap • The introduction of one stop shopping • 1990s and 2000s • Wider aisles • Trolleys without wobbly wheels • Out of town superstores/car parks • Big weekly shops • 2010s • New categories/diversification • Convenience stores • 2014/15 • Quality – top up shopping = Waitrose • Surprise and delight = ALDI/Lidl 08/11/2015 LEXDEN Effectiveness and efficiency Experiences and novelty Price and convenience Cost cutting and convenience
- 7. As consumers move from a ME to a WE culture, companies will have to change their customer engagement model New engagement models: • Embed sustainability and authenticity as central goals in product and service strategies of the business • Engagement of internal stakeholders in the ongoing process of process improvement • Acknowledgement that potential future motivations of existing and potential consumers will change! • Alignment of the business’ purpose and brand promise with these changes Source: Understanding tomorrow’s consumer landscape, Anne Lise Kjaer in: The Future of Business, Critical insights into a Rapidly Changing World from 60 Future Thinkers, edited by Rohit Talwar, 2015
- 8. 2020s 1980s Limited Branch hours Cheque books Loans Savings Mortgages Credit Cards Check Guarantee Cards General insurance Investments Foreign Exchange Self Serve 2.0 ATMs Telephone Banking Extended Branch Opening hours Internet Banking Mobile Banking RFID/NFC The accelerating changes in technology have and will change customer’s experiences and increase their expectations Building Society Savings books Branch closures Cyber Crime Virtual Money Human – Machine Convergence Branchless Banking Credit 2.0 Social Media 2000s Years till mass adoption of technology • Aeroplane 68 years • Telephone 50 years • Radio 38 years • Television 22 years • PC 14 years • Internet 7 years • iPod 3 years • Facebook 2 Years Mobile Wallet Source: Bank3.0, Brett King, 2013 Changes over decades have fundamentally changed the customer experience … … and change is accelerating Source: Analysis undertaken by Thought Research October 2015, and Breaking Banks, The Innovators, Rogues and Strategists Rebooting Banking, Brett King, 2014 New Payments “Neo Banks” “Traditional” Banks New Entrants Frictionless Banking P2P Lending
- 9. EAST: The UK’s Behavioural Insight Team (aka “The Nudge Unit”) has successfully changed consumer behaviour Source: Inside the Nudge Unit – How Small Changes Can Make a Big Difference, David Halpern, 2015 EASY Make it easy. People are much more likely to do something if it’s easy and low hassle ATTRACT People are drawn to that which catches their attention, and that which is attractive to them SOCIAL People are strongly influenced by what others are doing or have done TIMELY Interventions are more effective before habits have formed, or behaviour has been disrupted for other reasons The EAST mnemonic
- 10. Four stages of customer internet experience Stage One: Experiencing Functionality “The Site Works Well” • Usability and Navigation • Speed • Reliability • Media Accessibility • Security Stage Two: Experiencing Intimacy “They Understood Me” • Customisation • Communication • Consistency • Trustworthiness Stage Three: Experiencing Internalisation “It’s Part of Me” • Exceptional Value • Shift from Consumption to Leisure Activity • Active Community Membership Stage Four: Experiencing Evangelism “I Love to Share the Story” • Taking the Word to the Market • Defender of the Experience
- 11. The Disney Institute suggests three strategies to perfect CX 1. Create an organisational common purpose The essential foundation on which all other service decisions can be developed, a common purpose is a succinct explanation of what you want the customer experience to be at the emotional level. It represents to all employees what you stand for and why you exist, and it is the primary tool for getting everyone “on the same page.” 2. Get to know your customers holistically Your knowledge of the customer must extend far beyond the boundaries of traditional service criteria. Truly understanding their needs, wants, emotions, and industry stereotypes is the key to creating personalised interactions. 3. View exceptional service as an economic asset rather than expense With lifetime customer relationships at stake, the return on investment for providing consistently exceptional service clearly justifies the short-term cost. Source :Advancing the Customer Experience, HBR sponsored by the Disney Institute, 2014/15
- 12. People tend to “misremember” previous experiences Source: Happiness by Design – Finding pleasure and purpose in everyday life, Paul Dolan, 2014, Thinking , fast and slow, Daniel Kahneman, 2011 Peak-end Rule “when ask how much you enjoyed something two factors will explain your answers: the peak moment of pleasure or pain and the final moment of pleasure or pain” Duration Neglect “your overall assessment of an experience doesn’t even pay that much attention to how long it lasted” Examples: • While job satisfaction is a good predictor of employee attrition rate, data from the UK and Germany suggests that peak and end job satisfaction are a better predictor of quitting • A very average film can becomes a blockbuster if it has a great and exciting ending!
- 13. 08/11/2015 LEXDEN Customer Experience - It’s about how it makes me feel!! Mildly pleased… ..or a little bit more elated…