Asia Pacific Report: Disruption at Lightning Speed
In Asia Pacific and beyond, the world is changing with every passing second – from customer attitudes to loyalty, payments to technology. Is your company keeping up? Download a special 26-page COLLOQUY Asia Pacific Report to learn more about this vibrant customer engagement landscape and the lessons it holds for brands and marketers worldwide. Here's one of the stories from this compelling report.
To generate better loyalty, they must embrace a top-to-bottom commitment to better experiences.
By Damon Pal
Take the money and run: That seems to be the customer relationship principle for many banks in Australia. It has been my experience that the retail banks in the Australia/New Zealand region have spent very little effort getting to know their clients.
But that is likely about to change thanks to several market forces — users’ evolving demands, the maturation of digital services and, perhaps most importantly, the coming cap on interchange fees — that will open up a world of customer-experience opportunities. Beginning in July 2017, new government regulations will limit the fees charged to businesses to process credit card payments, including on high-end rewards cards.
Perhaps it isn’t entirely banks’ fault that they don’t know their clients well, as most of them probably spend the majority of their time dealing with the perception that the four big banks in Australia (NAB, Westpac, Commonwealth Bank and ANZ) already have a stranglehold on customers. As a result, the need to nurture loyalty and enhance the experience have not been seen as critical. Instead, banks spend more energy being reactive, addressing complaints about inadequate advice and disproportionately high interest rates.
Meanwhile, news about aggravation with overdrafts or call-center issues surfaces with depressing regularity, and resentment runs high. It is not surprising to see that, as a general sentiment, trust in banks is low. Along with the coming impact of lower interchange rates on loyalty programs, there is a general feeling that banks pile on for a bad customer experience.
One of the most important changes I expect to see in the Australian banking loyalty space is a deep emphasis on creating a great customer experience.
Banks will need to focus on solutions that are simple yet satisfying and help put users in control, testing and adapting over time to be in tune with consumer priorities. The customer life cycle, from the nurturing process to purchase, is tantamount to developing this deeper loyalty, and I look to see more focus on a single view of the customer along with CRM programs that target specific user groups. These will be driven by the use of analytics and, more importantly, insights.
In recent years, with the help of new technologies, consumers have more choices as to which companies they want to buy from and how they want to interact with brands. Many banks have started to recognize that providing a good experience is good not only get them higher satisfaction scores on the annual Net Promoter Score survey and shareholder value externally; it can also make banks more profitable in the long run.
One way banks have begun to look to enhance experience, and will need to do more of, is by developing a 360-degree view of their customers. With insights from this holistic view, banks can better engage people with relevant messages and targeted offers. This allows a good experience to blossom and motivate loyalty. Such a 360- degree view improves the quality and satisfaction of each interaction and maximizes the profitability of each relationship. It turns the retail interaction between a bank and a consumer from an adversarial encounter to a win-win situation.
These types of customer-centric programs do not happen overnight; there certainly isn’t any magic bullet or wand that companies can use to produce loyal customers. Good experiences happen when there is a comprehensive marketing strategy that works hand in hand with technology programs, and the entire organization, from top to bottom, buys into the cause.
In addition, customer experience practices must always be evolving with consumers’ needs and behaviors. Engaging from all touch points via an omnichannel approach is key. Customer experience must be aligned in the different channels, including research, before a person opens an account, as well as at the bank, online, on the mobile app, in social media and during phone conversations with customer service representatives.
Some observers suggest that the coming cap on interchange fees could be devastating to the way banks and financial institutions operate in the market. But I believe it is generally good for the consumer, forcing issuers to be more competitive and better use customer experience, agency services and technology platforms. In a Darwinian twist, they’ll have to determine how much they rely on homegrown programs and third parties to innovate and help drive loyalty back to their brands.
Banks must get better at using data insights for contextual relevancy during interactions over time. They must provide a great customer experience that is simple, rewarding, affordable, satisfying and available to all users. In fact, all of us in the industry — the agencies, technology platform providers, system integrators and analytics/insights providers — are challenged to achieve this for all users. Only then will customer satisfaction rise — along with their loyalty to their bank.
Damon Pal is sales director, Australia and New Zealand, for Epsilon. He can be reached at damon.pal@epsilon.com.
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