Why all financial services need a CX strategy

This dynamic, unprecedented in previous eras, has significantly reduced customer loyalty, with consumers less likely than ever to settle for a higher price, poorer experience or a lower return.

For a long time in Australia, providers in the finance industry have maintained market share due to a ‘set and forget’ customer attitude, capitalising on the complexity of the sector and the perceived challenges customers have in navigating the providers and products available to them. There are always exceptions to the rule, however, the reality is that loyalty in financial services is driven more strongly by convenience than it is by customer experience. To a great degree this is because relationships are ‘sticky’ and the effort required to change our financial relationships is high.

Consumers tend to vote with their feet in industries such as hospitality and services. Consider how many times you have returned to a café where you received a mediocre coffee, or a hairdresser who provided poor service. Financial services has traditionally been less customer focused.  A recent survey conducted in the US found that 41 percent of banks and credit unions stated that they consider themselves “relationship focused” with just 13 percent of consumers saying the same. This supports the clear disconnect between theory and practice in these industries, a gap most clearly articulated in customer support channels.

In Australia,  financial service brands have responded to this new consumer driven environment with waves of sales initiatives aimed at increasing revenue, often at the expense of existing customer relationships. In an industry where trust is king, this knee-jerk reaction undermines customers’ sense of being valued by a brand, eroding a relationship that may have taken years to establish.

As I listen to Spotify and order Uber Eats for dinner, I find myself considering the potential for change in an industry with a distinct shortage of industry disruptors and innovators.

The organisation that innovates and listens to the market will ultimately triumph when this discerning generation of consumers are given a choice between two or more options that are differentiated by flexibility, simplicity and deep connections. Brands able to optimise the digital experience and deliver frictionless support channels will challenge more established institutions; and customer strategies working with, not against sales and marketing agendas will succeed in demonstrating a commitment to existing customers, driving retention and recommendation.

The following are my key steps in delivering an effective CX program:

ASK

Put the question out there. What can we do better? What do you need from us? Ensure feedback channels are easy to find, convenient and available at any time across a range of platforms.

LISTEN

Spend time reading comments and understanding the information your customers give you, without defensiveness. Invest in the right team to analyse this feedback and provide strategic advice.

ACT

Do something about it. Choose some quick wins and set longer-term goals to improve the customer experience. If you keep asking questions and don’t deliver change, your customers will quickly learn that their insights are falling on deaf ears.

COMMUNICATE

Letting customers know you are listening, and that their feedback is influencing change will help maintain a two-way conversation. Make sure customers know that their voices are helping shape the future of the brand.

DELIVER

Communicating a customer promise and not delivering on that experience will do more damage than not having set an expectation in the first place. Brands that take years to establish can be destroyed with a single interaction – understanding the importance of these touchpoints in defining a brand is key.

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To learn more about our CX expertise, check out our Customer Experience & VOC page.