banking’s most important currency: customer trust

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Banking’s Most Important Currency:Customer TrustApril 1, 2014

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Today’s Speakers

Elizabeth GlagowskiEditor-in-Chief

Customer Strategist Journal

Don PeppersFounding Partner

Peppers & Rogers Group

Weston McDonaldHead of Financial Services

TeleTech

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Event logistics

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Helpful tools Click the gold question mark for help with technical issues Enlarge slides when needed Twitter Hash tag: #customerstrategy

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Agenda

Disruption is the new reality

Why trust matters to great customer experiences

5 key drivers of customer trust in banking

Attendee Q&A

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Disruption is the new reality

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Disruption is the new reality

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Disruption is the new reality

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• 60% of checking accounts likely to become unprofitable soon

• 35% of customers already buy significant services from a competitor

• Non-bank competitors and new technologies make it easy to switch

The business model is being massively disrupted

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Traditional ProductsCDs, Money Market, etc.

34%

% of customers leaving their current bank to do business with competitors…

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Credit Cards

53%

% of customers leaving their current bank to do business with competitors…

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Automotive Loans

68%

% of customers leaving their current bank to do business with competitors…

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Brokerage Accountsand products

82%

% of customers leaving their current bank to do business with competitors…

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Non-traditional new entrants are also stealing share of customer

Source: Forbes Banks could lose 35% share by 2020 report

Online Only

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Financial Management Hybrids

Source: Forbes Banks could lose 35% share by 2020 report

Non-traditional new entrants are also stealing share of customer

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Source: Forbes Banks could lose 35% share by 2020 report

Non-traditional new entrants are also stealing share of customer

Payment Centric Technologies

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Big Box Retail Entrants

Source: Forbes Banks could lose 35% share by 2020 report

Non-traditional new entrants are also stealing share of customer

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Disjointed interactions and product silos drive customers away…

Source: Ovum Business Trends 2013, J.D. Power and Associates 2012 U.S. Retail Banking Satisfaction Stud 24/7

56% of all customer journey episodes are

multitouch and multichannel…

…but 80% of banking interactions don’t retain the data

from the last interaction!

71% of channel cross-

over events need

information that has already been given

Customer support is still

driven by product silos

Personalized treatment

is still maturing

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…But good customer experiences do drive growth

The likelihood that a customer will open new accounts and purchase additional products/services…

A good web experience increases

likelihood by 11 times

A good contact center experience increases

likelihood by 14 times

Source: 2013 Gallup Bank Customer Engagement Study

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Why Trust Mattersto Great Customer Experiences

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In a word:

What exactly is a “good” customer experience?

Frictio

nle

ss

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Friction reduces loyalty and cross-selling

Customer loyalty is not highly correlated with a superior customer experience…

…but customer dis-loyalty is highly correlated with a poor customer

experience!

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Product experience

Customer service

experienceSource: The Effortless Customer Experience, 2014

Bad news for financial services!

Likelihood to tell friends about a good or bad customer experience:

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Moore’s Law

Every 20 years, computers get a thousand times faster and cheaper.

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Zuckerberg’s Law

Every 20 years, we interact a thousand times more with others!

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The more we interact, the more trust we demand

Trust makes interactions more efficient

Interaction generates transparency

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Proactive trustworthiness

“Trustability”

In the e-social world it’s no longer enough simply to refrain from cheating or deceiving customers

Extreme trust

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Extreme trust requires a company to proactively watch out for its customers

Extreme trust

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…and customer engagement generates trust

Trust reduces friction…

Extreme trust

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Customer engagement leaders outperform customer engagement laggards

Total Shareholder Return 2007-2012

50%

40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

S&P 500 Index

Leaders outperform laggards by

77%Customer

Experience Laggards

-34%

14.5%Customer

Experience Leaders

+43%

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Higher NPS scores drive higher revenue growth

Citigro

up

Bank o

f Am

erica

HSBC Ban

k

Chase

TD Ban

k

Well

s Far

go

PNC Ban

k

Fifth T

hird

Bank

U.S. B

ank

BB&T

SunTru

st Ban

k

Region

s Ban

k-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-20

-10

0

10

20

30

40

50

-10.9%

-4.7%

0.0%

2.2%

6.5%7.9%

8.9%10.7%

11.8%

16.0%

28.3% 28.8%

Revenue Growth 2013 NPS Score Linear (2013 NPS Score)

20

11

-20

12

Re

ve

nu

e G

row

th

Ne

t P

rom

ote

r S

co

re

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Five Key Drivers of Customer Trust in Banking

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Every interaction should improve customer trust

…this createstrust, which…

• Knows the Customer• Removes Friction• Resolves Problems

• Eliminates Surprises• Protects the Customer

• Increases Asset Growth• Captures More Share

of Wallet• Grows Customer LTV

• Reduces Costs to Serve• Breaks Down Product

and Service Silos• Increases CSAT/NPS

When a bank:

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Five key drivers of customer trust in banking

Not having to repeat information already given

Knowing the banking relationships (family, businesses)

Keeping information accurate

Knowing channel preferences

Knowing the customer “persona” – e.g., customer needs

Keeping in touch with life events and customer episodes

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Know theCustomer

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Five key drivers of customer trust in banking

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Know theCustomer

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Intelligently connecting the customer to the right answer or resource the first time

Making contact and engagement easy

Seamless communication and transition between channels and product silos

Eliminating waste from the value chain and processes

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

RemoveFriction

Know theCustomer

Five key drivers of customer trust in banking

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Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

RemoveFriction

Know theCustomer

Five key drivers of customer trust in banking

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First Contact Resolution

Technology to facilitate outcomes

Associates empowered to take actions

Segment-based associate training and insight

Intelligent Web Self Help

Connected and harmonized multichannel engagement

Social knowledge management

Problem feedback to drive continuous improvement

Know theCustomer

Eliminate Surprises

Protectthe

Customer

ResolveProblems

RemoveFriction

Five key drivers of customer trust in banking

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Know theCustomer

Eliminate Surprises

Protectthe

Customer

ResolveProblems

RemoveFriction

Five key drivers of customer trust in banking

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Keeping promises and managing expectation inflation

Communicating difficult scenarios – fees, pricing, regulatory changes

Proactive outreach

Triggering communications in key processes Card application, replacement

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Eliminate Surprises

Five key drivers of customer trust in banking

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Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Eliminate Surprises

Five key drivers of customer trust in banking

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Associates who are advisors and advocates – e.g., not selling the customer products they do not need

Always acting in the customer’s best interest

Professional treatment and recognition

Communicating to the customer according to that customer’s persona

“Fair play” – proactively making things right

Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Five key drivers of customer trust in banking

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Know theCustomer

RemoveFriction

ResolveProblems

Eliminate Surprises

Protectthe

Customer

Five key drivers of customer trust in banking

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Poll question

Which of the 5 key drivers is the biggest opportunity for improvement at your company?

1. Knowing the customer2. Removing friction3. Resolving problems4. Eliminating surprises5. Protecting the customer

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Making Customer Trusta Reality

©2014 TeleTech Holdings, Inc. Confidential and Proprietary 45

• Segment Treatment Plans• Multichannel

• Segment Based Investment Allocation • Predictive Modeling

• Acquisition• Cross-Sell/Up-sell• Churn

• Align Corporate and Customer Metrics

Strategy• Customer Segmentation

• Customer Lifetime Value (Current and Potential)• Needs and Wants• NPS and Voice of the Customer• Demographics

• Customer Metrics

Insights

Building Breakthrough Customer Experience

1 2

36

45

• Business Process Redesign• Contact Center Optimization

• Data Architecture• Enabling Technology

• Multi-Channel Communication• CRM & Social Knowledge• Systems Integration

• Organizational Design

Business Design

• On-going analytic model updates• Enterprise Metrics• Customer Metrics (e.g., NPS)

Measure & Refine

• Care Professionals• Technical Support• Multiple Geographies & Languages• Licensed Associates

Manage• Pilot Test• Measurement and Iterative A/B Testing• Refinement and Roll out

Deployment

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We’re just getting started

Stay engaged with us:

• Download “Restoring Trust in Banking” PDF

• One-day trust assessment workshopEmail Liz at eglagowski@1to1.com for more info

• Subscribe to the Customer Strategist Journalhttp://bit.ly/CSjournal

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Q&A Session

Elizabeth GlagowskiEditor-in-Chief

Customer Strategist Journaleglagowski@1to1.com

Don PeppersFounding Partner

Peppers & Rogers Groupdpeppers@1to1.com

Weston McDonaldHead of Financial Services

TeleTechwestonmcdonald@teletech.com