32 JULY 1 AUGUST 2007 ABA BANK MARKEnNG

Customer Exporience

by Bebecca Marek and Nick Miller

larbucks and Dunkin' Donut.s, Their basic coffees taste a little diftei-ent; their cu.stomer e.xperiences are si^nificanily differentIrom store lighting to coffee options to food choice.s to team members' raps with customersreflecting widely divergent company values, target markets and strategies. Like banks, the companies seU similar core products. Unlike banks, they have designed their customer experiences to appeal tcj some clearly defined customer segments and not others. A designed customer experience translates a company's brand and strategy into activities and style that consistently engage target customers and gain their trust so they become loyal and buy more from the companies whose experiences they prefer. For banks, the path to stronger differentiation, more loyal customers, and higher revenues lies in choosing specific target customer segment.s, carefully designing and choreographing even the smalie.st details that protiuce preferred experiences, rehearsing team members to ensure they perform their roles as designed, and managing the details of the proce.ss daily. A success case The mass affluent group of a major bank saw an opportunity to invite families holding a portion of their wealth with the bank to consolidate their holdings. The bank decided to offer a basic financial planning service as part of the package. Prc\ious attempts involving pricing, products, and differential service levels had pr(idiiced no result. They knew through focus group feedback that trust and "feeling involved" would be keys to the credibility of the offer. This time, though, they paid attention to each detail of the sales process, from the moment of first contact, through development of alternative plans to account maintenance. Yes. down even to the smallest details around how customers would be greeted, where they would sit and what customers would be handed to read while they waited for the financial planning adviser. This meticuUuis attention to detail paid off handsomely as the bank quickly exceeded its targets around numbers of completed Mnancial plans. Fees earned per completed plan were four times initial estimates. Better yet, over the la.st six years portfolio sizes and fees have grown nicely.
Lessons from the story:

Strategy. The bank itlentified a market objective anti tievised an approacii offering a differentiated value propo.sition to specific target customers.
ASA BANK MARKEnNG JULY I AUGUST 2007 33

 Design. The bank crafted an end-toend sales process. No detail was too .small to consider.

6SteiisWaysioliiiprouea Customei'sExiieiienGe

1. Focus. 2. Assess from the outside in. 3. Develop strategy. 4. Choreograph customer interactions. 5. Rehearse, rehearse, rehearse. 6. Execute, measure and adjust.

Deployment. Tlie bank created scripts, presentation aids, guidelines about where ami how meetings .sliouki IKaminged, itnd outlines aiid oilier tools to ensure that all staff "followed tlie script" to c'lj.t'ate the tustomer exix'riencc the target jiopulation would find attraaive. The financial planning advisers were trained to deliver tlie value emlxxkiei.! in the process and tt) represent a set of Indues tliat desired customers wouki lintl attractive. While attentive, consistent and efFecUvc customer ,scivice is |i;ui of [he overall customer experience, it Is laigely it-active, task-oriented, and in direct respoase to a customer, genenilly during a face-toface event. Customer experience. hovNever. Is far more inclusive and demanding. Customer experience Ls influenced at every toLich point l")et\veen tlic institution and tlie cu.stoinerfiTim the deli\eiy aiitl a[")|X-arance of a statement to the physical attributes of tlic bntndi office, to die welisite, to the phone diannel, to tlie ATM,
Getting it rightcustomer experience implementation

Implementing a customer experience ,strategy rccjuires a top-down, multidepartmental commitment, l-'ortunately, customer experience possibilities are vast and leave ample room to be innovative and create the experience that works for any organization. Six steps

Banks must think through customers interactions in detail, mapping out each customer pathway.

34 JULY

AUGUST 2007 ABA BANK MARKEnNG

can improve customer experience and pay dividends many times over: 1. Focus. Choo,se the target customer segments the bank wants to attract. Strategy, differentiation and value propositions require choices. 2. Assess from the outside in. While some
laiiiously succe,s,sful castomer cxjX'rience elements are the resiilt of a CHO's sudden iasight (Ricliard Braason comes to mind), most siicccHsful ciLstomer experience strategies ;ux." the result of deep understanding of taigeted custt)mur segmentstlieir v;ilues, aspirations, self-images, fears, irritatioas.

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ABA BANK MARKEnNG JULY I AUGUST 2007 35

daily habits, preferences and niutines learned iJuDugh direct ohservation, fociis groups and pilot pmgranis. fiank iruinagers nuLst tJicn decicie which of tliese elcmcnis arc most cri[ic;d to Uie buying decision a particular company wants dicm to make? Tlie "mass affluent" bank's desired customers wanted to tnist the bank and teel involved. Investment reuims were an divious requirement. Btit wilh many providers from which lo chose, tnjst and involvement were tlie key.s to the initial liuying decision and tlie u'illingness to consolidate their assets. 3. Develop strategy. A well-developed strategy defines a company's approach to engaging, reuiining and expanding its most desired customers better than Its competitors, ini.-knling offers, price points and distribution. 1b these traditiotial strategy elements, add llie 'cu.'^omei-s" buying experience." A designed aistomer experience integrates all strategy elements into a customer's preferred virtual and physical interactions witli the company.
4. Choreograph customer interactions. This is

sigtit of the CTJStomer. Bonxjw a trick from movie directors. Build storyboards with action seen tlin>ugh LT.istoniers' eyes, portraying tlie cListomers' experiences and the details of each moment. For example, if a Irank identifies late middle-life, affluent .small-business owners as a major target .segment, ttien storytxiard ttieir experiences with tlie Irank through their eyes. These \\'ill be very diffeienE e>'es dian tlio.se of mid-twenties entrepi'eneurs. To ensure an integrated response. every touch point must t)e considered the back ofHce, call centers, marketing and prtxJucT development.
5. Reiiearse, reiiearse, rehearse. Whenever

defined customer experience. They need to perfonii their roles in ways thai engage their audience memlx-rs. A ,solitl performance takes tremendous discipline and practice. Tliis is another spot where most banks fall short: Too little rehearsal, not enough coaching. Without sufficient training and rehearsing, the desired resiili will not be attained, and tlie prior .steps wili have tieen wasted. Staff should be practicing key aistomer interaciions .
6. Execute, measure and adjust. Measuring

sales or seivice team memlxrrs face customers, they are aaing out a role in the

the effect of tlie aistomei- experience initiative is essenti;il in buikling sujijxirt. encouraging .staff and (.lemon.strating the inlicrent value of the program. Most impomintly, use information gained in the measurement process to re-evaluate and adjtist tlie

tlic s]^.)i where mosi bLinks. in our experience, tall shortmiipping details and axnmurucating them to team meml")ers. Banks must tliink through cTJStomer interactioas in detail, mapping out each customer p-atliwayjihysical and viitualeacli customer interaction witli staff: interactions between stiiff memlx-rs; physical layouts of branches and ATMs: and ttie content and design of w^ebsite pages. Witti all tliis planning alxjut 'v^'tiat tlie liank wants to deliver, it is easy to lose

Banks willing and able to press through these mental obstacles will reap handsome rewards.

To ensure an integrated response, every touch point must be consideredthe back office, call centers, marketing and product development.

36 JULY I AUGUST 2007

ABA BANK MARKHING

pix)grcun to make sure the aistomer experience lieing provided is re.soruuing favorably vi'itli tlie customers. Obstacles to creating customer experience

Completing the six steps will be more challenging than it looks. New research shows that while 46 percent of banking executives surveyed cited investments in experiential store design and merchandising as being important, 80 percent staled the ability to consistently apply a customer-focused culture across the retail network as the primary factor that makes or breaks their efforts to enhance differentiation at the front line. While an overwhelming majority (jf executives acknowledge the impor-

money," notes Joseph Pine, co-author of "The Experience Economy." "Rather than realizing that spending time with customers gives them a tremendous opportunity, they pushed people out of branches to use ATMs. They pushed them out of the one piace where they could control the experience, to use voice response units and to use the Internet instead, all because they wanted to lower the cost," he adds. Second, bank senior leaders learned to be risk averse. While they learned to focus intently on development and implementation of compliance and credit pr(.)cedures (both subject to unblinking regtilatory scrutiny), many senior bank leaders developed a "Iaissez faire" posture with the practices and procedures of sales and customer service, viewing them as somehow an art form, often leaving these to sales training providers to define through their packaged training program.^. As a result, banks tend to underestimate the level of detail needed to choreograph and manage customer interactions that generate an intentional, designed, consistent customer experience. Ask a retail leader, market manager or branch manager to describe compliance standards and procedures, their answers will be snappy and focused. Ask them about their sales. ser\'ice or customer experience standards and procedures, and they'll pause.
The rewards

for the desired customers consistently, as designed. Since we started with Starbucks, let's finisli with it. Sc'ott Bedbuiy, senior vice president of marketing at Starbucks during the formative years between 1995 and 1998 said: "To me, the question is not how can you be different, but how can you be different in a way tliat resonates deeply witli people? How can you. your people, your pHxiucLs. and therefore your bnindcreate a human cxjnnection-' Oi; to put it differently, now that everyone's bnigging about their brand, how can a pr<Klut1 develop Inunility? Another question is: How can you differentiate vdur brand? To me. tlie aaswer L tliat lieing different Is ultimately al:K)ut s valuesyour values, your brand's values, and your company's values. Your values are what sets you apart." Your values are what shine through in the customer experience.

r:

Nick NINIer is President of

Clarity Advantage, a Boston-based sales consultancy that assists clients to generate more profitable sales, faster by impLementing strategies through sales forces. Rebecca Marek is a Clarity associate and partner in the London-based consultancy, Setanta Performance. Telephone: (978) 897-5665 or e-mail nickiiiiller@clarityailvantage.com or rmarek@ciarityadvantage.com.

tance of differentiation, relatively few banks have accomplished it. The most important obstacles are based on values, or to paraphrase Yogi Berm, "Customer experience is 90 percent mental. The otlier half is physical." This mental otxstacle is rooted in the assumptions and values of an industrial. mass-consumer economy rather than a knowledge-based, experiential. indi\idualized economy. First, many bank senior leaders learned that cost cutting is their path t(} success. Driven by industry overcapacity and failures to grow revenue. "Banks ha\e developed an attitude that spenciing time with customers costs them

Banks willing and able to press through these mental obstacles will reap handsome rewards. Recent research demonstrates thai loyal customers bring 24 percent more deposits and 14 percent more consumer loan balances to tlieir primary banking institution than the ruuional average and are tliree times more likel>" to recommend the bank to friends or family membersmoney in the bank! Time and resources invested to de\elop more loyal customer relationships are rarely wasted in reiail. Earning these rewards begins with strategychoosing the customers a bank wants to attract and defining the methods by which to create a preferred experience, differentiating its offer, attracting the customers, and developing their buying loyalty. Attracting and developing their buying loyah\depend hea\'ily on customers' subjective experiences of sellers. Banks can design buyers' subjective experiences of .sellers through storyboarding and other techniques and deploy the processes, procedures and people who can generate the preferred experiences

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ABA BANK MARKEHNG JULY I AUGUST 2007 37