Banks are struggling to align their priorities with customer priorities -- and customers sense it too, according to a new PeopleMetrics study titled, “A Shifting Landscape: Customer Experience Trends and Practices in Retail Banking.”
More than three out of every four executives say that the customer experience has improved, according to the study.
“Contrast this with two-thirds of consumers who say they have seen no change in the experience and we have identified a gap between internal effort and the external experience,” the report notes. “This could be because even customer-centric banks don’t have their priorities aligned with those of the customer. When asked about future improvement priorities, customers say they want better products and services, while this item falls to No. 7 on the executive priority list.”
As a result, the study shows that there needs to be a shift in organizational culture from one that is company-centric to one that considers the customer first.
“In spite of the great work that’s being done, transformational practices with further reaching consequences are still not as prevalent,” the study says. “There is a significantly lower adoption rate of activities that require investment of financial and people resources.”
Just two out of five executives say that they have aligned their rewards structure to customer experience metrics, the study found.
“Compensating for sales performance is a hard habit to break,” according to the study. “A similar number say that they have successfully implemented systemic improvements using customer feedback. That is to say fewer than half have made larger technology, product and service improvements driven by customer needs and understanding.”
Perhaps the reason these “more meaty activities are not being bitten off by the majority of banks,” is the struggle to demonstrate a tangible ROI in customer experience, the study notes.
“Practices requiring more investment and a greater commitment to change are adopted by the minority only,” according to the study. “While there is big opportunity for banks willing to tackle the tougher customer experience practices, banks that have mastered the foundational practices are already seeing the return on customer experience investments.”
Participating executives in the study came from banks that have grown top line revenue in the past 12 months as well as those with stagnating or declining revenue. By splitting the feedback into these two groups, the study identified the customer experience practices that are most highly correlated with financial performance.
Recognize employees for improving Cx 75%
Share customer feedback with employees on a regular basis 69%
Established goals for improving Cx 60%
Tke action on individual customer feedback 59%
Ask employees how we can improve Cx 56%
Embedded into our on-boarding and ongoing training programs 56%
Aligned our Cx strategy with our brand promise 53%
A common understanding of what Cx is and is not 52%
A clearly defined set of target customers 51%
Disciplined decision-making considering the impact on the customer 49%
Performance on Cx metrics built into rewards structure 43%
Customer feedback drives systemic improvements 43%
Understanding the ROI of CX 24%
The four disciplines of growth banks versus non-growth banks are as follows:
1. Take action on individual customer feedback
2. Utilize a decision-making process that emphasizes the customer
3. Share a common definition of what customer experience is and is not
4. Establish a goal for customer experience improvement
“When we look at how these different banks are performing on the key aspects of a great customer experience, it is clear that community institutions excel at creating lasting, positive emotional memories for their customers,” the study says. “Customers love the personal experience of a community bank. They have a small town feel to them. I like that they greet me by name before even having my account information in hand. I don’t ever feel like I am just a number to them.”