Pub. 5 2017 Issue 2

Issue 2. 2017 15 C onsumers no longer use just one source to inform their purchasing decisions. So why use one metric to gauge your bank’s customer experience? Customer Experience: What’s the Big Deal? Improving the customer experience is the number one priority of business and technology leaders. 1 And it’s no wonder. Consider the following: • Customer experience has been found to be the most critical driver in in- creasing customer loyalty 2 • 41 percent of customers who opened a new account in 2014 did so because of a positive customer experience 3 • A one percent change in customer satisfaction is associated with a 4.6 percent change in market value 4 Customer experience can have a signif- icant effect on a financial institution’s bottom line. After a positive experience, more than 85 percent of customers increased their value to their financial institution by purchasing more products, while more than 70 percent reduced their commitment after a negative experience. 5 Clearly, customer experience is a big deal for financial institutions. The 2015 Forrester US Customer Expe- rience Index shows that customer experi- ence in the digital era correlates strongly with brand loyalty. 6 Increased customer satisfaction generates brand loyalty and a greater likelihood of customers recom- mending your bank. Naturally, customer service plays an important role in maintaining a positive customer experience. A single negative ep- isode can be shared in a matter of seconds via social media, causing a ripple effect that is disproportionate to the severity of the episode itself. A recent study revealed that 90 percent of consumers admitted to having a “deal breaker” interaction with certain brands. 7 Deal breakers included lost baggage at an airport, excessively long wait times during a service call, or intermittent internet ser- vice by a cable provider. Losing a single customer or account hold- er due to poor service is bad enough. But with so many channels available to voice displeasure (social media, email, websites, blogs), a single lost customer can exponen- tially cause a brand to lose future custom- ers or even other existing customers. Thus, it’s vital that financial institutions focus on measuring — and improving — customer experience and customer satisfaction. Measuring Customer Satisfaction: Net Promoter Score Net Promoter Score (NPS) has long been the standard by which companies gauge customer satisfaction. 8 Based on one sim- ple question, “How likely are you to rec- ommend this business to a friend or family member?” the NPS separates customers into three categories: A company with a high NPS (which runs on a scale from -100 to 100) would have more Promoters than Passives or Detrac- tors and, presumably, have a larger market share and better business performance than competitors with lower NPSes. A company with a low NPS would rank its improvement as both a good and a key performance indicator (KPI), while a company with a high NPS would work to maintain it . Both would focus on their customer experience programs to impact NPS. 9 What NPS Won’t Tell You NPS is indeed an effective way for finan- cial institutions to benchmark growth, customer satisfaction and marketing efforts. But while NPS has a host of positive attributes — it’s easy to use and implement, helps draw actionable insight from the data and can be leveraged for fast growth — there are drawbacks. The biggest drawback is that while NPS will tell you if account holders are satisfied or unsatisfied with your financial institu- tion, it doesn’t tell you why they feel this way. The one-dimensional view provided by NPS doesn’t provide the complete story of account holders’ experiences and inter- actions with your financial institution. 10 The Digital Experience and the Evolution of Consumer Information Social media has drastically changed the way consumers interact with financial institutions. Account holders now have more options at their fingertips and can quickly investigate a new product or ser- vice with the tap of a screen. Customer Experience: Beyond the Net Promoter Score ® Article courtesy of Harland Clarke  Customer Experience: Beyond the Net Promoter Score® — continued on page 16 1.Detractors 2. Passives those who are ambivalent about your services and offerings 3. Promoters those who will happily recommend you to others Boo! Meh... Wow!