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How to Grow Profits

Companies that offer best-in-class customer experiences grow faster and are more profitable. To reach this level, companies must relentlessly improve customer journeys across channels and business functions.

 

I have discussed the difference between great and poor customer experience at length in this blog, where today, the consequences of a below-par service are amplified by the speed and reach of social media… we have all heard the stories of companies like United Airlines who had over $100m wiped from the value of their business in the ‘United broke my guitar’ debacle, where one poorly handled customer complaint created a very real and evident problem for the company, not only in terms of its valuation but also to their brand. 

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Providing a strong customer experience is not just about reducing the risk of customer service mishaps. It is increasingly a way for companies in competitive markets to distinguish their brands. The airline industry is a good point of comparison with banking. Both are highly regulated and highly competitive, and businesses in both industries find it increasingly difficult to differentiate their products without lowering prices. Airlines all use the same planes, serve similar food, and match prices. Like in the airline industry, due to the internet, aggregators, and social media, shoppers know more than ever about prices, and services in banking, which in itself presents interesting challenges for bankers.

 

Banks now see customer service as one of the few remaining ways to stand out from the crowd and those that invest in it are reaping the benefits. The three US banks with the highest customer satisfaction ratings have profits that are way above the industry average.

 

How to plot the path to profitable growth

Delivering a superior customer experience takes more than developing a mobile app or adding call centre staff. It requires significant investments, relentless improvements, and collaboration across customer channels and business functions.

 

Many banks look at each customer touchpoint, from visiting the website to calling an agent, as a discrete, individual event. But customers see those events as steps in a single journey to meet an important need.

 

Improving customer experiences requires a common vision and new levels of coordination across businesses by establishing cross-functional, multichannel customer experiences - this is an important responsibility and should sit with a CEO and his board.

 

What are the barriers to customer experience excellence?

The main reason so many companies fail to improve customer journeys is that understanding what customers value is not an easy task. Identifying what drives customer satisfaction and translating it into operational performance improvements requires:

 

Thorough and accurate customer insights:

  • Clean analytics

  • Prioritised customer journeys built around a real persona

  • An understanding of the role of technology, your organisation's technology roadmap and its ability to deliver omnichannel experiences

  • Cross-functional ownership of an holistic customer experience including internal systems, processes and procedures, communication and all customer touch-points.

  • End-to-end ownership by C-level management

Understanding what customers want, and what they will want, is paramount in building a better customer experience. Great customer experiences never stand still, they adapt and evolve and are constantly being improved. Real transformations are achieved when organisations take a holistic approach to customer journeys and how their organization works, understanding that they themselves are on a journey with no fixed destination. 

 

Only a holistic process can deliver tangible and sustained improvements. I suggest focus on the following three areas:

 

Vision: Create a detailed and specific vision for a customer-centric business and operating model with clear, measurable milestones and targets

 

Knowledge: Develop customer insights and personas. Build the tools that enable you to link customer satisfaction to operational measurement

 

Development: Radically redesign customer journeys from start to finish mapping every customer touch-point (human, physical and digital), whilst understanding its implications internally and its impact externally.

 

Opportunities to differentiate through stronger customer experience are huge and growing. The challenge many companies face is getting their organisation moving in the right direction. There is no time to wait. In the digital era, consumer power is rising. Banks that do not change risk falling behind market leaders who are all building deeper relationships with customers.

 

Businesses see their services through the eyes of the customer have an opportunity, with each interaction, to live up to their brand promise and in doing so to build great, long-lasting value.

 

About the Author

Nicholas Griffin is Managing Director at Principle Global (www.principleglobal.com) Information on how to contact Nick is in the footer of this web site.

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