Importance and Benefits of Customer Experience
Customer experience is a hot topic across companies, it’s not hard to understand why. Some of the fastest growing companies of recent times, such as Amazon and Uber, have created personalized, seamless experiences for their customers as a foundation stone for super fast grow.
This has raised the bar considerably in terms of customer experience, setting new levels of expectation for customers. In a digital world with customers using multiple devices and channels to engage with brands, the race is on for companies to up their game.
Improving the customer journey and providing a positive customer experience (CX) was ranked as the number one trend, as well as top strategic priority, in the survey of global banking leaders for the 2017 Retail Banking Trends and Predictions report.
Marketing remains the main function leading on customer experience (source: Leapfrog Marketing Institute), accounting for 50% of activity, whilst a further 24% have set up a dedicated customer experience group. From a funding perspective, Leapfrog’s survey of C-level and Marketing executives at 119 companies (both B2C and B2B), shows 38% of respondents have a dedicated customer experience budget, and 60% of those reported a year on year budget increase.
5 Reasons For Financial Services Marketers To Invest In CX
Here are five reasons for Financial Services marketers to invest in customer experience
1. Grow Sales
In our recent blog article ‘Power Of A Superior Customer Experience In Enabling Sales’, we looked in some detail at how a better Customer Experience can grow sales. The Temkin Group (the Research & Consulting firm), estimated 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). Bain suggests that increasing customer loyalty by 5% leads to a profitability growth of 25-90%.
Meantime, Forrester’s ‘Drive Revenue With Great Customer Experience, 2017 report’ mapped the correlation between a great customer experience (CX) and impact on revenue. They found that improving CX drives customer loyalty, increasing the probability a customer will stay with a brand, increase spending, or recommend that brand
2. Happy Customers Reduce Costs
According to Bain & Company’s ‘Customer Loyalty in Retail Banking’ report, mobile interactions are much more likely to create happy customers than interactions through contact centres or branches. Why, because mobile channels give busy consumers the flexibility to manage financial affairs at the time and place of their choosing. No more travelling to a bank branch or wasting time trying to speak to a call centre agent.
Bain also estimates a huge cost disparity for providing mobile interactions, variable cost of about 10 cents, as compared to $4 for a bank clerk or call centre agent.
So by creating a digital first experience that focuses on greater simplicity and convenience, financial services firms can simultaneously improve customer loyalty and achieve multi-billion dollar cost saving across the industry.
3. Stay Relevant
Millennials now represent more than one third of the workforce in leading economies such as the US, and by 2020 will represent almost half. This is the ‘digital first’ generation, tech savvy and using mobile and online for everyday banking requirements. They’re also set to represent the greatest buying power in the market.
Having grown up during a time of technological change and globalization, millennials behave differently and expect a different type of customer experience that is more personalized, digital led, works seamlessly across devices and is quick and easy.
4. Remain Competitive
In recent years fintech has disrupted traditional financial services by putting customers first. Last year PwC reported that 53 percent of financial institutions see themselves as customer-centric compared to more than 80 percent of fintech companies.
Whether its mobile banking, online wealth management, crowdfunding or peer-to-peer lenders, Fintech firms are creating cheaper and more accessible alternatives to their traditional competitors.
Traditional firms are responding to the threat by either creating their own fintech projects (like the UK’s Clydesdale and Yorkshire Bank, which launched a mobile banking app called ‘B’), or investing in fintech to underpin growth or leverage capabilities (eg. Spanish Bank BBVA’s 30 per cent stake in Atom Bank).
But whether the threat comes from startup fintech or more progressive traditional competitors, its clear that a better customer experience is a competitive challenge.
5. Better Data and Insights
Big data, machine learning and artificial intelligence represent one of the most important technological advancements for business in the modern era. Mobile, digital payments, the internet of things and other pervasive trends provide access to unprecedented insights on customer behaviour, needs and intent. Simultaneously, AI and related technology creates the ability to organise, understand and act on that data at scale, in real time and using a fully automated approach.
This step change in customer understanding for marketers opens up the potential to deliver much more relevant, personalized experiences, something that customers increasingly demand.
However, Financial Services continue to battle to get control of their customer data. The lack of a consolidated customer view, was cited as a top three issue in the Financial Brand’s recent Customer Experience survey.
Knexus is a real time decision making engine using AI & proprietary algorithms to match social & marketing content with dynamic customer profiles. The platform delivers personalized customer journeys in real time that improve engagement and increase sales (across ecommerce, websites, apps, and email).