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Customer Strategist Journal
Innovative strategies for building more profitable customer relationships. Published quarterly online and in print.
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Increasing the Net Worth of the Customer Experience

Is Customer Experience Profitable? You Can Bank on It

Customer satisfaction with most banks is at its lowest in years, according to several published reports. Some experts suggest that this is due to merger and acquisition activity; others say that it's simply due to poor service and high fees. In the United States credit unions and local banks tend to score higher in customer satisfaction than large national or global banks, mostly likely due to their more personal approach to service.

What seems like doom and gloom is actually a huge opportunity for banks and other financial services firms that excel at customer experience. These companies can win the loyalty of existing customers and the attention and business of prospects by showcasing that experience excellence. Consider ING, which transformed its new-account process as part of an increased focus on delivering an exceptional customer experience (see "ING Netherlands Is Uniquely Customer Centric"). Most single-owner accounts are now processed in 30 minutes; it used to take three weeks. The change is delivering a positive Net Promoter Score for the bank, as well as a competitive advantage. 

In the case of Banco Santander, by eliminating certain fees and focusing on the customer experience at every touchpoint, the bank has seen both retention and wallet share increases (see "When the Customer Is King, Customer Experience Rules"). The company also introduced an extensive customer experience initiative to ensure that success is ongoing.

Unlike the situation some U.S.-based banks have faced with recent mergers, German-based Commerzbank retained 100 percent of its customer base throughout a two-year acquisition (see "Commerzbank Takes the Customers' Point of View"). The company accomplished this by keeping an open dialogue with customers throughout the process using an extensive customer listening program to ensure that any changes to the customer experience met customers' expectations.

Banks like ING, Banco Santander, and Commerzbank show that a focus on customer experience translates to increased engagement, retention, and wallet share—all of which ultimately improve business performance. In fact, according to recent research Peppers & Rogers Group conducted jointly with the European Financial Marketing Association, trust and customer experience are inextricably linked (see "Excelling Through Excellent Customer Experiences"). The better the customer experience, the greater customers' trust in their bank.

In this special issue on customer experience in financial services, we share insights, strategies, and best practices that top financial services firms are using to create and sustain a competitive advantage. At a time when gaining customers' trust is paramount to retention and growth, financial services firms can demonstrate through customer experience excellence that customers' best interests are not only considered, but are integral to every strategy decision. As a result, these firms will see a profitable return on their customer experience investment—with interest.