Customer Experience Management in Financial Services
While banking, accounting, and insurance don’t necessarily sound like the most exciting and magic-filled service businesses off the bat, they present the chance to create some of the most life-changing and memorable customer experiences out there. While the key principles of customer experience management still stand, the financial sector presents unique challenges and opportunities when it comes to making every customer experience awesome. So how do you best manage customer experience for businesses that provide financial services? How do we navigate the increased demand for trust, support and technical expertise? Stick around to find out.
What is customer experience management?
Financial services aside, let’s quickly recap on what exactly customer experience management is. When we talk about customer experience, we're talking about the way a customer personally feels about your company, its products, services and, well... everything: all of the tiny details and micro-moments that add up to create an opinion.
Customer experience management analyzes the overall customer experience by collecting granular behavioral data and direct feedback. It looks at how we can fine-tune the customer experience to create an emotional connection between a brand and it’s customers.
Why finance businesses need customer experience management.
Financial services aren’t just about numbers and spreadsheets. They’re about providing meaningful experiences that meet, or better yet exceed, the expectations of your customers. In a highly saturated market, customer experience is the best way to set your financial services brand apart from the rest.
According to a recent survey of nearly 1,100 executives by the Harvard Business Review, 64% of the 114 respondents from financial services companies say that improving customer experience is a top-five business priority for the year ahead.
Let’s take a look at the benefits of customer experience management for the financial industry:
- Customer retention and acquisition.
When you effectively use behavioral data to understand what matters the most to your customers, and deliver on that every time, in every location with every customer — you retain customers and create customer loyalty. Plus, customers who have awesome experiences refer their friends and family (hello customer acquisitions).
- Reduce costs
Effective customer experience management finds the loopholes that lead to customer churn. Not to mention, focussing on CEM is a more efficient way to grow. The cost of acquiring a customer is 5 times more expensive than retaining one.
- Increased revenue
According to the research & consulting firm The Temkin Group, a bank with $1 billion in revenue that improves their customer success scores by 10% can expect to increase revenue by $850m over the next three years (a 27.5% growth rate).
Best practices for implementing a customer experience management plan in the finance sector.
End-to-end customer experience management is built upon developing a holistic approach to customer experience optimization. We’ve identified fifteen best practices to consider when it comes to implementing a customer experience plan in the finance sector:
- See the customer journey as a whole
- Study customer expectations
- Map the Customer Experience
- Evolve from transactional to relational
- Educate and advise
- Nurture trust through transparency
- Leverage data and analytics
- Personalization at scale
- Mitigate Cybersecurity risks
- Invest in digital UX
- Automate routine tasks
- Enhance self-service options
- Promote omnichannel engagement
- Track your progress and refine the process
- Establish feedback loops
Let’s take a look at each…
See the customer journey as a whole
In order to optimize the customer experience, it’s essential that organizations break down silos and operate as a cohesive entity. To gain a 360° view of the customer, you must:
- Consolidate data from all departments
Each department of your business has access to juicy insights about your customers. But these insights are worthless if left in isolation. Insights from your product team should be consolidated with insights from your frontline team. Data from your customer support team should be combined with data from your marketing team. When you collate data across all departments, you gain a unique perspective on your customer and identify innovative ways to improve their experience.
- Identify touch points across all products and departments
How does a customer get from hearing of your financial services for the first time, to becoming a repeat customer? Every interaction your customer has, whether that be a phone call, a website visit, an email or an in-person appointment is called a customer touch point. To gain a holistic view of your customer, you must identify every touch point, understanding the attitudes, needs and behaviors of your customer at each step in their journey.
- Work from customer personas
A customer persona is an archetype that represents a segment of your target market. It is used to better understand your customers and their needs. For example, a bank may have one customer persona called Chloe. Chloe is a 30 year old single professional looking to buy a home within the next two years. A customer persona of Chloe would contain in depth demographic and psychographic information that would help the bank tailor it’s experience to meet Chloe’s expectations, e.g providing her with information on first time home buying.
To effectively manage customer experience in the financial sector, and any other sector for that matter, you must gain a 360° view of your customer. The more you know your customer, the better experience you can provide.
Study customer expectations
Put simply, a great customer experience is one that matches the customer’s expectations. Step 1? Understand what those expectations are. Although customer expectations will differ vastly across industries, we know from working with thousands of experience brands that almost all customers expect:
- A consistent experience across all channels and platforms.
The level of service a customer receives shouldn’t fluctuate. They want to have an awesome experience every time, in every location.
- Real time service and resolution.
On hold or waiting? Customers will simply find an alternative where they don’t have to. Customers expect real time service, and quick response times.
- A highly personalized and customizable experience.
80% of customers are more likely to purchase a product or service from a brand who provides personalized experiences.
- Robust privacy and data safeguards
Customers are increasingly concerned with online data protection. Companies who are unable to meet this customer expectation are likely to fall behind.
Never assume what your customer expectations are. Get the data straight from the customers using an automated feedback tool.
Map the Customer Experience
The objective of a customer experience map is to gain a comprehensive understanding of all the different interactions with a brand, across all channels and their effect on customer experience.
A customer journey map is a visual representation of the customer journey (also called the buyer journey or user journey). It helps businesses step into their customers’ shoes and experience their business as a customer would.
It visually illustrates customers’ processes, needs, behaviors and perceptions through their interactions with your brand. It also helps to segment and create personas for your customer base.
Evolve from transactional to relational
In the financial world, transactions are happening all around us. But when it comes to customer experience, the shift from transactional to relational customer experience is the foundation to building stronger, lasting customer relationships
A transaction approach to customer experience is all about the short term. It looks at getting the sale, and meeting customer expectations then and there. Relational customer experience is about building long-term relationships. It’s about fully understanding the customer, their needs, wants and feedback as it changes over time.
One of the best ways to support relation CX is by using a feedback tool. Feedback tools help you measure every customer experience with real-time NPS, which help you create experiences that blow your customers away.
Educate and advise
Finance can be an overwhelming and stressful component of many peoples’ lives. Offering customers information that can help them make more informed decisions about their money and financial goals helps build better relationships. Methods for using education as a brand driver include:
- Improving financial education content marketing. For example, blog posts, email marketing and social media.
- Automate notifications that monitor balances, due dates and more. This way you’re able to connect and educate your customers in real time, in a personalized way.
- Offer interactive credit education tools. For example, a home loan calculator.
In order to improve customer experience, it’s crucial that the education and advice you give to your customers matches their unique needs and expectations.
Nurture trust through transparency
Trust is the second most important factor consumers consider when buying financial products. Transparency with data is paramount to gaining and retaining customer trust. In order to meet customer transparency expectations, you must:
- Have clear communication regarding security and privacy.
- Put control of personal data in the hands of the customer.
- Leverage technology to support transparency.
Leverage data and analytics
Advanced analytics and granular customer data equates to more personalized experiences. You can use a customer relationship management software to organize and analyze customer data. A CRM system helps businesses keep customer contact details up to date, track every customer interaction, and manage customer accounts.
In the finance industry, the key benefits of using customer experience technology platforms include:
- First party data collection
With a feedback tool, you can gain customer insights, revealing what your customers love the most, and dislike about your financial service.
- Better data segmentation
CRM platforms help you segment data, revealing patterns about different customers. Understanding these patterns is essential for delivering awesome customer experiences.
- Predictive algorithms
Improving customer experience has become more streamlined and automated than ever before. Predictive algorithms can help you get one step ahead of your customers.
Personalization at scale
‘One size fits all’ no longer cuts the mustard. A data driven, individualized approach to financial services is imperative in boosting customer engagement. In fact, 72% of customers rate personalization as “Highly Important” in today’s financial services landscape. When you personalize your customer experience, you not only provide a more relevant experience, but enhance customer engagement and meet the core customer expectation of a highly personalized experience.
An example of personalization at scale is the website customization effort by The Credit Union of Texas. The Union wanted to focus on personalizing their website’s “hero banner” which they were able to do using returning visitor and lookalike data.
“When users visit the credit union website and fill out a form, that data gets pushed into their CRM for lead tracking. Then third-party data provider takes the information provided by the visitor, and enhances and matches the information. After that, an audience profile is created based on this information; this information drives what the visitor sees on the page. The personalized page showed different CTAs based on where the prospect was in their buying journey. The updates to the pages helped guide the customer as to what the next steps were if they were interested in learning more or purchasing the product.” explains Data Axle.
The results? A 300% increase in home equity and mortgage applications, a 20% increase in auto loan leads, a 15 million growth in total submitted loan leads in just the first month.
Mitigate Cybersecurity risks
The average cost of cybercrime per company in financial services was $18.5 million in 2019. Yikes. The good news is, you can utilize customer experience management analytics to enhance safeguards. For example, you can leverage interaction analytics to flag potential high fraud risk scenarios. You can also effectively communicate risks to relevant organization customers and stakeholders. When you apply data to risk management, you increase customer trust, and reduce lost business costs.
Invest in digital UX
In a technology driven world, improving customer experience relies heavily on digital user experience. You can think of digital user experience as the feeling an end user has after an experience in a digital environment, e.g on a company's website or app. Enhancing the customer journey requires delivering fast, simple and customized digital experiences.
The benefits of effective digital functionality include:
- Reduce costs
Streamlined digital experiences reduce customer churn and convert more effectively.
- Streamlined process
Technology makes things easier! When you invest in digital UX, you’re able to leverage strong design, automation and personalization.
- Accelerates resolution immediacy
Using heatmaps and customer data, you can see where customers are dropping off and resolve issues in real-time.
- Meets the expectations of the modern digitally-minded consumer
Customers expect awesome customer experiences online, just as much as they do in person. Your customers should be able to meet many of their needs from their iPhone.
Automate routine tasks
Leveraging AI to engage customers 24/7 improves response times and reduces the number of live support requests. With technology and predictive algorithms, you can passively answer customer questions, see to support queries and provide customers with an awesome experience. However, while some tasks are made to be automated, others aren’t. In the financial sector, where high levels of trust and customer support are required, it’s important for customers to interact with real people, delivering real experiences.
Enhance self-service options
Improving access to self-service portals frees up support agents to spend more one-one-one time resolving complex issues with customers. For example, a mobile banking application allows users to transfer money to different accounts, open new accounts and create automated payments, all from their phone. If users get stuck with the processes, FAQ and support content can be provided to guide customers through the process. Frontline workers and support agents can then use their time more efficiently to cater to processes that require higher levels of customer guidance support.
Promote omnichannel engagement
Between web browsers, social media, email, and apps, people engage with the financial world in an omnichannel way. Omnichannel, meaning a multichannel approach that focuses on seamless customer experience, no matter where your customer is shopping from. For example, an insurance company may have customer facing platforms on web, in person, apps, email and chat bots.
Customer experience management will need an omnichannel approach to keep up. Reaching individuals on their preferred platforms, in their preferred language, will ensure higher response rates to customer surveys and better data sets.
An omnichannel approach enabless:
- Real-time data synchronization between different channels
- Access the same services on and offline
- Reduce customer wait times by enabling immediacy
Track your progress and refine the process
Customer experience is dynamic and ever-evolving, so your CEM strategy should be too. It’s important to track your progress using key customer experience metrics including NPS, 5-Star, CSAT or Customer Effort Score. What’s working? What’s not working? Refine your experience approach from there. Continue to gain insights from your customers, regularly revisit your customer experience vision, continue to map new and old customer journeys, analyze customer data on a daily basis and constantly check in with your support agents and frontline teams.
The key methods for sustaining continuous analysis and improvement include:
- Track progress on actions taken
- Calculate ROI on CEM
- Focus on tangible results rather than metrics
Establish feedback loops
In order to continuously improve customer experience, you must establish feedback loops. The best ways to go about collecting and analyzing data?
- Customer feedback software: With a feedback tool, you can connect real-time customer feedback with all your teams, systems and processes.
- Social media listening: Get snooping on social. Platforms like Facebook, Instagram and LinkedIn can be useful places to find insightful customer feedback and opinions. Search for tagged posts and related company hashtags to get the scoop on what folks are saying about your brand.
- Customer surveys: Post-purchase surveys are a fantastic way to find out what customers are thinking in their own words. You may like to offer them a reward to incentivize participation.
Financial services aren’t simply about numbers. They’re about creating long-lasting, trusting client relationships which rely heavily on customer experience management strategies and tools. The considerations above will help you better understand your customer from a holistic perspective and leverage data and analytics to build stronger, longer lasting relationships with your customers. At the end of the day, financial services are financial services. What sets them apart is the experience they deliver to their customers.
Looking for a feedback tool to help you connect customer feedback with your teams? We’ve got you covered.