Reinventing Customer Engagement: The Winning Model for Banks and Insurers – Webinar Recap

Renowned author and financial services consultant, Roger Peverelli returns to talk about his latest book Reinventing Customer Engagement: The Winning Model for Banks and Insurers.

Introducing his new book, Roger spoke about the process and methodology behind their findings. He and co-author Reggy de Feniks wanted to find out what successful customer engagement looked like in a number of industries globally to see if there were lessons and best practices could be applied to the financial services. They made a number of discoveries that surprised them.

Roger then went on to reveal the four main reasons why customer engagement is important:

1. Customer engagement is essential to building trust – Engaging with customers means listening to what they say and responding, which builds a relationship and, eventually, trust, something banks must work hard to do.

2. Shift in points in differentiation – As market places become more crowded and competitive, customer engagement is one area where a brand can set itself apart.

3. Customer engagement is a primary source of profit – Customers who have a good experience with a brand are more likely to buy a second product, less open to accepting offers from competitors, and more likely to recommend the brand to others.

4. Regulators are paying more attention to customer engagement – Every aspect of the customer experience is now coming under the microscope. It’s no longer just about the product; sales and service processes, quality of advice, and after sales communication must all be up to scratch.

Once he had explained the importance of customer engagement, Roger pointed out that although banks seem to think it’s high on their priority list, really they are just paying lip service. He pointed to recent research from Forrester, which found that:

  • 47% banks don’t measure their own performance when it comes to customer service / engagement
  • 71% don’t have a comprehensive overview of their customer engagement policy
  • 79% do not structurally train employees to engage with customers

However, Roger did say that not all banks were falling behind and he included some shining examples in his list of brands that encapsulated one his four core business values that resulted in successful customer engagement. Here are the four values he shared:

1. Vision and leadership – With the example of DBS Bank, who ensure that every process and every employee, from the CEO down, embraced the bank’s values of being respectful, easy to deal with, and dependable.

2. Deep customer understanding – exemplified by Singapore’s OCBC FRANK concept, which created a project team to figure out how to reach 18 – 30 year olds. They made sure the team was made up from people of the same age. The end result was that 70% of new clients now come through that channel.

3. Culture and people – This time the best case wasn’t a bank but an airline. South Western are renowned for their service, even though they invented cheap airfare. They were the only airline to make a profit in the U.S. in the last period, and they believe it’s because they challenge their staff to help each other out.

4. Competence and discipline – Russian bank, Live Financial Group send teams with cameras to their branches to interview customers as they exit. The films are then sent to the branch in question so employees can learn what their customers think and how they can improve. Live Financial Group have seen a direct correspondence between their net promoter score and their net income ration as a result.

Roger than identified 7 strategic design principles which he believes are key to improving customer service:

1. Orchestration: The entire customer journey matters; a good experience is cancelled out by a bad experience in a flash.

2. Expectation management: Being upfront about processes can help to manage expectations, which greatly affects whether a customer leaves feeling satisfied or cheated.

3. Customer involvement: Customers want to feel empowered – that they play a role in making the products they choose better. They also want to share their experiences; it magnifies their enjoyment.

4. Virtual proximity: Customers can feel ‘close’ to their bank, even if there are no branches anywhere near them.

5. Think contextually: Think about the big picture, what types of partnerships with parallel services or businesses can help boost business and add value to the customer?

6. Lifetime value management: Recognize that while some customer engagement initiatives may require an investment, the long-term or lifetime value will far outweigh the initial spend.

7. Focus on customer journey when you’re looking at engagement you have to take two perspectives into account: relevancy for customers and impact on business objectives. Focus on the most relevant and profitable moments throughout the journey to be successful.

Roger summed up by stating that turning customer engagement into an economic engine requires a careful blend of core business values and strategic design principles.

To see Roger’s webinar in full, including commentary, watch the film.