Creating Low-Code Loan Applications using the Trisotech Mortgage Feature Set
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1. IBM Global Business Services
Customer Relationship
Management
Unlocking client
advocacy in
Canadian retail banking
The client focused enterprise
2.
3. Unlocking client advocacy in Canadian retail banking
The client focused enterprise
By Emeline Tjan, Mary Anne Peek, Scott Lieberman and Robert Heffernan
Canadian banks may find new opportunities to gain marketshare, attract
new clients and improve client retention if they increase their awareness
of their clients’ attitudes toward their organizations and the impact
these perceptions have on profitability. By identifying which clients are
advocates, apathetics and antagonists, banks can more precisely target
егмент ция стр сти :) client experience improvement initiatives based on a more informed
двок ты
understanding of client preferences and future value. To boost the bottom
п тики, п тичные line, we believe banks must instill a cross-functional, cross-channel
нт гонисты
discipline to better understand – and act upon – clients’ perspectives of
their banking experience.
Introduction Despite significant investment, the largest
We consistently hear banks touting their banks are not well positioned to grow their
commitment to meeting the needs of client bases: our research shows the majority
their clients and putting their clients first. of clients will be reluctant to commit to a
Accordingly, branches are once again deeper relationship as a consequence of their
in vogue, and executives have declared cumulative experience with the bank.
improving the client experience is the first
In order to acquire more clients and keep
priority for many organizations. Building the
the ones they have, bank executives need to
base one client at a time through cross-sell,
understand client attitudes and their impact on
retention and new customer acquisition is
behavior. Clients who have a positive attitude
a top priority in nearly every retail bank’s
toward the bank are advocates, while those
agenda. However, many banks have yet to
whose experiences shape negative opinions
identify the right segment-based strategies,
become antagonists. As such, a bank’s ability
marketing and sales programs, employee
to effectively manage and influence client
incentives, and process and technology
attitudes becomes paramount to sustained
improvements to produce higher returns.
growth and profitability.
Unlocking client advocacy in Canadian retail banking
4. , д , не з быв я про исследов ния и опер тивный
мониторинг для про ктивного менеджмент .
In this study, we establish the link between Identifying bank clients who can be converted
advocacy and higher profitability, and explore into advocates must be a tenet of any
three critical questions: customer focused growth strategy. To move
customers into advocate-level relationships,
• How well are banks positioned to grow on a
the customer experience must be well under-
client-by-client basis?
stood, continuously monitored and proactively
• Can a focus on improving advocacy unlock managed. We believe banks that effectively
growth potential? improve operations to align with the desired
• How can banks capture and exploit this customer experience can create a new and
opportunity? sustainable competitive advantage.
About the research
The goal of this study was to understand clients’ perceptions of their primary bank’s performance based on their
ranking of key attributes of what we’ve defined as the customer focused enterprise (CFE). Canadian banks were
categorized into four tiers based on asset level and geographic presence: National, Regional, Non-Traditional
Banks and Credit Unions.
1
This quantitative research is part of the IBM customer focused enterprise study completed in 006. Over ,500
Canadian banking consumers were surveyed via telephone and the Internet. The questionnaire consisted of 8
questions about interviewees’ perception of CFE operational characteristics as they pertained to their primary
bank, as well as their purchase intentions and some general financial services profiling questions.
Clients were classified into advocacy segments based on their answers to three questions: those who would
двок т - определение recommend their bank, those who would go to their bank first for a new financial services need and those who
элементы: уст новк , would not switch if offered a competitive product. Advocates, the top tier, have a high likelihood to recommend,
действие, лояльность high purchase intent and low switching intent; apathetics comprise the middle tier, and antagonists are the
lowest tier and most likely to switch banks and to not recommend their existing banks. To measure clients’
perception of bank performance, we asked clients to rate their primary bank on a number of rational and
emotive CFE attributes. The rational attributes were used to evaluate clients’ perception of their physical interac-
сего было 28 вопросов tions with the bank and included statements such as: my bank corrects errors when they occur; my bank uses
the information it already has received from me, rather than asking for me to provide it repeatedly; my bank
десь приведены некоторые
gives me plenty of ways to bank, including in person, on the phone or online. The emotive statements were
эмоцион льно и р цион льно
designed to provide understanding of how clients felt toward their bank and included statements such as: my
ориентиров нные вопросы
bank values my business; my bank understands my financial goals; my bank weighs both sides of the issue
when I have a problem and resolves it fairly.
Workshops were held with a team of senior IBM Financial Services and CRM consultants, along with statistical
analysts, to review the research findings and develop recommendations for banking operations.
орош я ком ндн я р бот , This study is a continuation of the IBM “CRM Done Right” series, following 004’s “CRM Done Right: Executive
видимо... Handbook for Realizing the Value of CRM,” as well as the 006 executive handbook, “Advocacy in the Customer
2 3
Focused Enterprise.” A version of this study based on U.S. respondents was completed in 006.
IBM Global Business Services
IBM Global Business Services
5. Unlocking client advocacy in Canadian retail banking
The client focused enterprise
Are banks fully positioned to grow to being a “one stop shop” (such as offering
on a client-by-client basis? insurance), with all of their provocative up-sell
and cross-sell opportunities, are denied to
Customer acquisition and retention are
becoming more complex traditional players due to regulation.
In recent years, the tactics Canadian banks
Other emergent growth strategies quickly lose
have used to grow their businesses have
their charm as they become widely adopted
been largely a mix of channel innovations,
across the industry and lose their competitive
conventional advertising and branding efforts
Emergent growth differentiation. Arguably, the last 20 or 30 years
and product extensions/pricing changes, all
have seen the largest growth in new banking
strategies offer while working within the various regulatory
channels and access points. Mobile devices
short-term constraints of the Canadian marketplace.
and the Internet have joined the complex
Additionally, on the domestic front there are
differentiation channel mix in which the phone, ATM and the
very few attractive “land-grab” growth strate-
among banks, but branch were already providing client experi-
gies available through the acquisition of other
ence challenges to Canada’s banking arena.
quickly lose their banking interests or tapping underserved
While each newly enabled banking mode has
appeal as they markets. Banks find themselves working
the potential to provide short-term differentia-
become widely against competitors for the same clients,
tion, each ultimately becomes a “must-have”
enticing clients to leave their existing banks
adopted throughout within the industry, providing new costs and
while at the same time trying to maintain a grip
challenges without always providing sustain-
the industry. on their captive client base.
able competitive advantage.
мы уже в FB! - что?
Perhaps the most divisive industry adapta-
During this time, economic segmentation
tions of late have been the introduction of
also became a growth strategy, as banks
non-traditional banks and the entrance of
began looking to appeal to the high-net-worth
non-traditional players into conventional
segments. At the same time, some banks
banking. Some non-financial companies, such
found new markets within low-income groups
as grocery brands or home goods stores,
and the under-banked (such as immigrant
are finding innovative hooks into the banking
populations). In both cases, the acquisition
market by offering banking services and
and retention puzzle became more complex,
convenient banking locations to their already
not easier.
populous and loyal base of clients. Other
providers, such as insurers, are expanding Products and fee strategies have their limits
their product lines into traditional chequing, Changing products and product features
savings and mortgage products. At the same has had varying impacts on becoming more
time, product expansion strategies related competitive. In some instances, banks have
интересные сегменты: м лодоходные и недообслужив емые
(которым не до б нков)
Unlocking client advocacy in Canadian retail banking
6. only devised incremental changes to base The impact of fee income is compounded
features and fees, such as changes found in by the fact that banks are facing increased
basic savings and chequing accounts. Other competitive pressure from other entities, such
products, such as lending vehicles, have seen as insurance companies and non-traditional
more dramatic changes in features, including banks providing cash management-like
creative payment schedules and incentives. products (e.g., chequing, bill payment) with
In the case of incremental change, banks lower-fee and no-fee structures. These
have found little competitive differentiation as competitors may be able to attract traditional
products become more commoditized. When customers irritated by higher fees, as they are
they do, copycat strategies often cause the able to supplement revenue streams from their
advantage to be short-lived. When products core businesses.
become more complex, banks may often find
themselves with more challenging commu- Finally, cost containment efforts made in the
nication problems with their clients, both in “name of the client” have had little impact on
terms of providing information to clients and differentiating the client experience. Many
equipping front-line staff to tell the story. banks have dramatically improved operating
efficiency, but lost connections with their
Banks have also sought to derive new clients. Banks continue to invest in call centre
sources of revenue from existing products consolidations, channel integration and
by establishing what have become known client service improvements, but we see little
by consumers as “nuisance fees.” However, improvement in clients’ attitudes and percep-
clients have become sensitive to these fees; tions of service capabilities.
our study showed that 69 percent of clients ройгрыш в бизнес-схем х, не коммуник циях.
Becoming a customer focused enterprise
agreed that their bank’s fees are too high.
Banks continue to explore how to create
The increase in fees, coupled with little new
more meaningful client experiences to
product innovation, has affected customer
enhance client relationships. However, for
perceptions of banks.
banks, creating both meaningful and prof-
“Fees go up, service stays the same… I am itable client experiences is a significant
challenge, particularly given the typical volume
expected to do more, yet fees go up.”
of customer interactions, the complexity of
– Canadian banking customer, IBM survey client access points and the limited purview
of decision makers on how their choices
affect client experiences. Based on the IBM
study completed last year, “Advocacy in the
customer focused enterprise: The next gener-
ation of CRM Done Right,” a new approach
has been developed for delivering customer
experiences – one designed to enhance
clients’ perceptions and build a competi-
tively superior experience, while prioritizing
4 IBM Global Business Services
7. An outside perspective
By Susan Fournier, Associate Professor, Marketing, Boston University School of Management
This research is a must read for anyone that is serious about becoming a “customer focused” firm. It deals
with a timely metric (advocacy, supposedly “the one number that matters”) in a powerful marketing paradigm
(relationship marketing and CRM) and explores this within a customer-facing service industry (retail banking)
that faces significant imperatives for organic growth.
IBM’s study fine-tunes and advances our understanding of the real content and process issues that are at play
ействительно. в отличие in the pursuit of strong customer relationships. It sensitizes us to the emotional and experiential elements that
от многих других они в своем truly drive the quality of customer relationships, but on which most firms do not perform. The research refines
исследов нии отр зили, что our understanding of “advocacy” and the attitudes and behaviors that comprise it. There is much added value
двок ты - к к и все клиенты- in IBM’s three-part advocacy model: wherein advocates are those not only willing to recommend the brand to
н ходятся в конкурентной others, but who also stick with the brand in the face of competition, and consider cross-selling opportunities to
среде, не в в кууме или boot. Companies can get greater predictive and diagnostic power from this more complex attitude-plus-behavior
тмосфере поклонения своему metric and the segmentation schemes that derive from it. All of this is guaranteed to improve the relationship
бренду. strategies and executions that retail banks develop for their brands.
Perhaps most importantly, IBM’s research makes us ponder a very perplexing conundrum: how could so many
banking service providers re-brand, re-engineer, strategize and act in the service of enhancing consumers’
relationships … and yet get it so very, very wrong? The results are striking: nearly 50 percent of customers of
national banks have antagonistic relationships with their banks. Let me repeat: one out of every two customers
сож лению, многие не опир
harbors an adversarial relationship with their retail banking brand! These customers are not simply disinter-
юся н ценностные метрики, ested in developing deeper relationships with their banks. They are not simply non-responsive to the outreach
лишь н поведенческие. из and relationship-expanding efforts of the firm. These consumers harbor very deep and strong negative feelings
повед тяжело вытянуть долго toward their banks; they essentially find fault in everything that bank might do. These current customers see
срочную приверженность, но their banks as opportunistic, self-interested parties looking only out for themselves. And this despite service
и доверять ей без дополнения experience initiatives, CRM systems, and relationship programs intended to strengthen partnerships between
дел ми тоже не стоит. ужны customers and the brand.
обе метрики..
I for one am looking forward to future extensions of this research into other industries and settings. I am
particularly excited by the prospect of moving beyond our fixation with leveraging advocates on the positive
side of the relationship continuum and learning to deal effectively with the “disengaged” and “antagonists” that
this research identifies as significant customer segments for the firm. Current wisdom suggests we fire “high-
cost-to-serve” customers such as these. But with upwards of 70 percent of your customer base in these two
segments, this hardly seems a viable alternative for the firm.
5 Unlocking client advocacy in Canadian retail banking
8. 5
resources and investments. IBM calls client satisfaction measures result in a histor-
companies that excel in the client experience ical view of client attitude and are not enough
arena “customer focused enterprises” (see and, in many cases, not included in making
Figure 1). strategic business decisions for future opera-
tional enhancements.
Most customer This framework – in combination with
satisfaction measures advocacy scores discussed in the following Our study tests different attitudinal state-
paragraph – is critical in structuring customer ments in an effort to identify the attributes
look back; customer
relationship management improvements. that contribute to positive client behavior
attitude measures like patterns and future intent. Accordingly, through
CFiq look forward. Unlocking client advocacy: The IBM Customer statistical regression analysis techniques, we
Focused Insight Quotient (CFiq)TM
derived a combined measure that captures
A commitment to the client experience is the
key indicators of client relationship health:
foundation of an effective growth strategy.
clients’ likelihood to recommend; their intent
To move from a client strategy focused on
to purchase; and their willingness to stick
efficiency to one that creates an effective,
with their bank even when confronted with
mutually beneficial relationship between bank
competitive offers. Termed the IBM Customer
and client, we believe bank executives need to
Focused Insight Quotient (CFiq), this measure
adopt a new view of client attitude. Traditional
FIGURE 1.
Competencies of a customer focused enterprise.
Companies who understand customer Solution experience is about
authority are able to approach understanding the impact that products
their customers in ways that build and services have on the overall customer
advocacy through understanding experience. By solution, we refer to
their customers’ perspectives, while products and services that address
Customer simultaneously linking the value of the Solution broader customer needs and desires.
authority customer to the enterprise. experience
Customer focused companies commit to a
Customer dialog is a business’ human performance approach to growing
ability to communicate and transact and sustaining employee commitment
with customers intelligently and that allows employees to better meet
responsively during each interaction personal and organizational objectives,
on a customer-by-customer basis. all while better serving the customer and
Customer Human being a stronger customer advocate.
dialog performance
Integrated execution allows Customer focused companies should
companies to integrate channels to transform the organization so that
support a consistent experience, functional groups and lines of business
and allow intelligent, cross-channel collaborate to fulfill customer-centric
execution of customer interactions. strategies and initiatives.
Integrated Customer
execution focused
organization
Source: IBM Global Business Services.
6 IBM Global Business Services
9. captures and integrates these attributes by banks (25 percent). This suggests that the
asking clients to state their level of agreement largest banks – by our estimates – are disad-
with three simple statements: vantaged in achieving sustained growth
by attracting and keeping clients, despite
• I would recommend my bank to friends and
advances in back-office and client-manage-
family.
ment capabilities.
• I would go to my bank first for future
financial services needs. For example, if a bank needs to increase wallet
share by 15 percent on average, it would need
• I would stick with my bank if offered a
to achieve significant success (wallet share
competitively priced product.
increase in excess of 50 percent) with the
The CFiq results are eye-opening – according 24 percent of clients who are advocates and
to this measure, only 27 percent of retail most receptive. A bank would likely have little
banking clients are advocates of their bank success gaining ground with apathetics and
(see Figure 2). antagonists.
What’s more telling is that the smaller players, Therefore, as banks continue to explore tradi-
such as credit unions and non-traditional tional organic growth levers, the business case
banks, have a higher proportion of advocates for growth initiatives should include a realistic
than the national banks when segmented by view of the potential economic value, based on
CFiq scores. Thirty-four percent of all credit both customer value and attainable advocacy
union clients are advocates of their bank – 36 measures (such as CFiq), by moving those
percent higher than customers of national levers on a bank-by-bank basis.
FIGURE 2.
Banks are disadvantaged in achieving client-by-client growth.
A little over a quarter of Canadian bank clients are ...the national players face the most difficult
“advocates” of their bank...
organic growth challenge related to advocacy
Percent of all Canadian bank clients
Percent of client base who are advocates by bank segment
27%
34% 34%
Advocates
27%
25%
76%
All others
Advocates = customers who would:
. Recommend their bank to others
. Look to their bank for future financial services products
. Stay with their bank if offered competitive products National Regional Credit Non-traditional
Unions banks
note: =1415 customers
Source: IBM Customer Focused Enterprise Retail Banking Study 2006 (Canada).
7 Unlocking client advocacy in Canadian retail banking
10. Can a focus on improving communications, and over 3.5 times as likely
advocacy unlock growth to trust their bank. Further, application of the
CFiq shows that only 20 percent of advocates
potential?
believe their bank’s fees are too high, as
The possibilities are tremendous compared to 52 percent of antagonists.
Although the challenge appears daunting, with Indeed, as banks look to drive organic growth,
an understanding of the critical drivers of client it should be paramount for banking execu-
attitude and the economic potential associ- tives to determine how to assess and invest
ated with improving those factors, banks can in improvement opportunities to both maintain
begin to position their organizations to realize high-value clients and/or migrate lower-value
improved growth potential. clients to a higher state of advocacy.
Our study shows that advocates, on average, Although credit unions significantly outper-
hold 17 percent more products than antago- form larger banks in terms of proportion
nistic customers, and the profitability of of advocates, the profile of the advocates
products held by advocates is 21 percent of both small and large banks is similar.
higher (see Figure 3). Advocates respond positively to statements
about their experience with their bank (e.g.,
The factors that contribute to this economic
seeks my input to develop new products and
value are also encouraging. Clients who
services, creates customized offers), whether
are advocates of their bank are almost four
they bank with credit unions or national
times as likely to be responsive to offers and
FIGURE 3.
Significant value can be unlocked for banks that proactively grow their share of advocates.
Financial impact Underlying contributors
Products per customer A
Profitability of products Responsiveness to offersC Trust their bankD
held (index)B
.00 88. 55%
.55 17%+ 7. 21%+
3.7x
4%
5% 3.5x
%
Antagonists Advocates Antagonists Advocates Antagonists Advocates Antagonists Advocates
note: =1413 customers
Notes: A) calculated average number of products held by consumer, B) weighted profitability index created for each retail product based
on industry product profitability IBM project experience, C) responsiveness is a combination of customers who strongly agreed with ‘bank
understands my financial goals and ‘bank provides relevant offers’, (9,10 responses) D) trust based on customers who strongly agreed with “I
would trust my bank to manage my information on behalf of other companies’ (9, 10 responses).
Source: IBM Customer Focused Enterprise Retail Banking Study 2006 (Canada).
8 IBM Global Business Services
11. banks. So, as banks assess the best way to more costly to deliver. Poor experiences can
grow through client acquisition and retention, result when a client needs to contact the bank
understanding what motivates and drives multiple times to resolve an issue, or when
behavior among different advocacy levels, a process that is supposed to tie together
and then executing the right set of strategies different areas within the bank is broken. Fixing
to increase advocacy, will likely prove a viable broken processes and understanding how to
avenue for achieving growth. better resolve client issues can directly impact
the bank’s cost to serve and build a platform
Leading banks often use different approaches for winning customer advocacy.
for achieving client advocacy. One national
Canadian bank focused on the customer A significant opportunity
experience as it is delivered by the advisor, According to our research, the three factors
Understanding the enabling it to track relationships and increase most highly correlated with advocacy are
economics associated with internal referrals among its existing retail and emotive drivers of the client relationship:
different advocacy levels investment customer base. Another bank 1. The bank listens and follows up.
can help banks identify invested heavily in cross-channel technology,
but is still lagging in advocacy measurements. 2. The bank values my business.
the most effective growth
3. The bank provides relevant offers.
initiatives. Actively manage the entire customer portfolio
Focusing on expanding the pie of advocates Clients who are advocates of their bank score
is only one side of the equation. When we these items higher than all other factors. The
evaluated the national banks (which included news on how banks performed on these attri-
RBC, Scotiabank, CIBC, TD, and BMO), we butes, however, is not positive. In total, clients
found that 36 percent of the surveyed clients give their banks credit for delivering on the
of the largest banks are antagonists. Thus, rational factors 43 percent of the time, but
understanding and managing the economics only agree their banks deliver on the emotive
of antagonistic clients could yield better profit drivers 24 percent of the time – identifying
margins because it helps reduce poor invest- the opportunity for a 76 percent improvement
ment choices and their associated costs. A (see Figure 4).
poor client experience – a primary trigger
that develops antagonists – not only creates
negative impressions with clients, but is often
Unlocking client advocacy in Canadian retail banking
12. FIGURE 4.
Banks leave money on the table by not focusing on client emotive needs – a 76 percent improvement
opportunity.
Rational attributes Percent agree
(efficient) (weighted index)*
Average rating
Provides plenty of ways to bank 66%
Corrects errors when they occur 65% 43%
Uses information already received 4%
Consistent level of knowledge 5%
Banks under delivered
Emotive attributes Percent agree
on emotive versus
(effective) (weighted index)*
кт недообеспечения клиентов rational expectations
Employees listen and follow-up 8% by nearly a 2:1 margin
н эмоцион льных мотив х - $ и Values my business %
ничего кроме денег. Relevant offers 8% Average rating
ерк нтилизм б нку - не к лицу :) Resolves fairly 6%
24%
Understands my financial goals 5%
Employees provide advice %
Seeks my input %
Creates custom products % Highest correlation with advocacy
note: =1413 customers
Note: Percent of clients who agree (9 or 10) with the attributes weighted by the level of importance of each attributes, as defined by the regression
analysis correlating rational/emotive attributes with advocacy.
Source: IBM Customer Focused Enterprise Retail Banking Study 2006 (Canada).
This gap in emotive delivery is indicative of cations with their clients and provide more
ожно подум ть, что оптимиз
banks traditionally investing in more rational meaningful financial advice that may impact a
ция р цион и эмоц мотивов идет
operational improvements. Accordingly, as client’s sense of value and turn him or her into
отдельно..
banks have invested in improving the effi- a more profitable advocate.
е предст влены конкретно виды
ciency of front- and back-office operations,
р бот, которые р цион льны и A polarizing effect
clients have seen a positive impact in the
эмоцион льны. бщие вопросы. As banks evaluate ways to better manage their
bank’s ability to serve their daily transactional
client base, executives should also consider
needs across channels and deliver faster and
the differences in profile between advocate
more consistent answers to routine inquiries.
and antagonistic clients. While we did not find
However, from a clients’ perspective, factors
demonstrable differences in the demographic
that contribute to building meaningful relation-
profile of clients who were advocates versus
ships have been less of a focus (e.g., emotive
antagonists (i.e., antagonists are just as likely
attributes such as listening and provide
to be high-net-worth customers as advocates),
advice), resulting in the current gap. Going
we did find significant differences in how each
forward, bank executives should consider
group felt about the bank. While the gaps
how improvements on the emotive side of the
related to individual drivers are significant, we
equation can yield net increases in the depth
found even greater contrast in aggregate (see
of individual relationships. For example, they
Figure 5). Advocates of banks gave their bank
should explore how to increase communi-
0 IBM Global Business Services
13. credit for doing “everything right,” while antag- “I believe all banks enjoy the business of the
onists found fault in almost everything their
individual; however, I believe my current bank
bank did. It is clear that clients who take an
advocate posture are attuned to the actions of actually focuses on individuals.”
their bank and are open, willing and positive “I have been dealing there so long I trust them
toward interactions. However, antagonists who
Banks need strategies completely.”
may have had a number of potentially bad
that take into experiences or ineffective interactions don’t “I would not go to another financial institution
consideration the give their bank credit for even the fundamental at any time, for any reason.”
attributes of a bank’s delivery system (such
polarized attitudes – Advocate quotes from IBM study
as providing plenty of ways to bank with it)
-- and behaviors - and in many cases are not responsive to new When building communications strate-
- of advocates and improvements or tactics. gies and evaluating front-office operational
antagonists. improvements, bank executives must
“I don’t think any bank values your business. consider client advocacy scores and their
We are only cogs on a wheel, and if we leave, impact on customer strategies and business
someone else will sign up!” case assumptions. For example, consider a
company that seeks to improve the service
“Big name banks…are not worthy of my spit, it provides clients through its contact centre.
never mind my business.” By recognizing that a portion of clients are
already antagonistic, a bank may choose to
“I would dump them in a heartbeat.”
make a small investment to test and improve
– Antagonist quotes from IBM study
FIGURE 5.
Significant gaps should be addressed in the attitudes of banks’ client base.
Antagonists Advocates
Percent who agree Percent points difference in responses Percent who agree
удесн я под ч д нных! Larger gap % Bank values my business 7%
5%
% Employees listen and follow-up 74%
5%
% Same level of knowledge across channels 70%
4% Give the bank
8% Proactively corrects errors 75% credit for doing
47% “everything” right
Find fault with 6% Provides relevant offers 5%
“everything” their 4%
bank does 7% Resolves fairly 54%
8%
4% Bank understands my financial goals 5%
7%
5% Provides me with plenty of ways to bank 8%
6%
57% Bank uses the information it already has received 80%
Smaller gap 4%
note: =1413 customers
Source: IBM Customer Focused Enterprise Retail Banking Study 2006 (Canada).
Unlocking client advocacy in Canadian retail banking
14. processes associated with key “moments of the natural barriers size and silos can create.
truth” to help contact centre employees deal This means the CEO and senior executives
with antagonistic clients and keep a broader need to practice, encourage and reinforce
problem from recurring. In addition, as banks positive behaviors that increase the value of
begin to understand the triggers of advocacy the customer experience. Without the support
and antagonism in specific environments, and true belief in this strategy for growth from
management will be able to build mechanisms senior executives, it can not sustain itself and
to predict when customers are likely to move will likely fail.
toward an advocate relationship, as well as
identify and proactively address high-impact A few companies successful at building
service failures. long-lasting relationships with clients have
ссылк
charismatic leaders who inspire ongoing
How can banks capture the innovation and passion for the client. Take,
opportunity? for example, Donald Bell of WestJet Airlines.
In order to increase your share of advocacy Mr. Bell has set the tempo for his customer
To change customer and increase the odds that your bank will be focused enterprise. He is known as the
attitudes, leaders successful at growing organically, you’ll need “spiritual leader” and “culture guru” of his
organization. Bell leads his customer focused
must first change the to act decisively:
mission by experiencing his business and
mindsets inside their 1. Adopt a transformative mindset. customer base (or “guests” as they call
,
organizations. 2. Apply an outside-in perspective. them) first-hand: he pilots a plane once a
week to discuss experiences with front-line
3. Break traditional design approaches and
employees and customers.6 Most organiza-
constraints.
tions may not need a culture guru per se
to be successful, but need to capture the
“When you create your own destiny, you
essence of these leaders’ commitment and
prevent others from doing it for you.” approach to inspire change.
– Anonymous
Apply an outside-in perspective
Shift mindset Brand communications set expectations, but
The foremost consideration executives need clients’ experiences shape their attitudes. A
to accept is that improving client attitude must client’s experience is based on the specific
start at the top. A mindset shift is required, interactions he or she has with the bank.
beginning with executive management; it These interactions differ by client segment.
must become a “way of life” for the organiza- When delivery is not aligned with expectations,
tion and central to the culture. This implies it is a moment of truth can turn into a bad experi-
a “top-down” led strategy. Banks must create ence for the client and negatively impact his or
the culture and organizational model needed her attitude toward the bank. But when experi-
to promote greater commitment, account- ence exceeds expectations, and is aligned to
ability and competency for leaders and staff benefit both the client and the bank, sources
– allowing large organizations to become of delight can emerge to positively impact a
more agile in delivering consistently in spite of client’s perception of the bank and alter corre-
sponding patterns of behavior.
IBM Global Business Services
15. For example, for a high-net-worth client, a has been developed to help understand
moment of truth might occur when a large customer behavior. Customer Experience
transfer of funds is completed. This moment Management (CEM) has emerged to focus
of truth may be a source of delight when on the fundamentals of understanding
the transaction is completed the same day, customers – not simply from an analytical
preventing loss of interest income. For a perspective but from a relationship point
college student, a moment of truth may be of view, and not as an alternative to having
when he is out with his girlfriend and uses a competitive product or reasonable price,
his credit card to pay for their pizza. This but as a differentiator. CEM is about under-
interaction could be a source of frustration if standing that the attitude of customers
Leaders must tailor
his card is rejected due to a bank error, nega- (based on their cumulative experience)
customer experiences tively affecting his attitude and receptiveness affects their behavior and willingness to
for different advocacy toward the bank for years to come. The inter- deepen their relationship with the bank.
levels – and implement action may be very positive, however, if the Whereas, knowing customer profitability
the operational changes bank, for example, allows the transaction to profiles and segments are valuable, truly
complete and later sends a warning e-mail understanding the attitudes and resulting
needed to deliver these
with payment options. behaviors of customers is fundamental to
experiences. how an organization brands, sells, services
To understand and effectively manage client and retains relationships. To accomplish this,
attitude, banks need to identify specific companies are transforming their organiza-
moments of truth by advocacy segment tions from a traditional internal orientation to
and design competitively superior target an external, customer perspective and rela-
experiences, while prioritizing resources and tionship structure.
investments.
Personnel who interact with customers
Break the traditions through a bank’s many touchpoints have
As banks seek to improve the operating the profound opportunity to improve the
model that supports client interactions, execu- customer experience by understanding
tives should work to relieve traditional design customer perceptions, attitudes and
approaches and constraints. Real areas for behaviors. While technology and process
improvement can be found in the compe- play a key “enabling” role, the human
tencies of human performance, solution conveyance of genuine service and relation-
experience and operating model innovation. ship is critical. This discipline must include
• Human performance: In the realm of visibility of the client experience as well as
meeting emotive needs, human perfor- well-defined roles to provide leadership in
mance is still the most impactful and this area.
effective means of conveying important For example, a major Canadian bank
attributes such as empathy, dignity, value recently appointed leadership roles within
and responsiveness. Front-line employees each channel and created a framework for
must understand the strategy and the customer-facing employees to collaborate
implications for their behavior in order to and design targeted client experiences.
achieve tangible results. A new methodology
Unlocking client advocacy in Canadian retail banking
16. • Solution experience: Banks need to metrics need to include key operational metrics
provide easily accessible mechanisms to such as customer profitability and channel
capture and integrate client needs into the measurements. The customer strategy should
overall banking experience – not just into create differentiation through the bank’s own
elements of the product design and sales operational strengths and by emulating the
approach. The experience needs to include capabilities of leaders outside of its peer group.
listening to and understanding clients’ Additionally, the customer strategy needs to
financial and other needs, dispensing be supported by a governance model that
appropriate advice and customizing supports action.
services that are relevant and appealing. A telling example of the need to have more
For example, one of the leading banks in meaningful customer experience metrics is
Canada orchestrates its customer experi- that of a particular Canadian bank. Because
ence to reduce the overwhelming number of the bank’s campaign budgets were allocated
offers its clients receive. The bank focuses by product lines, it struggled to deploy
on less frequent, but more meaningful, non-product-specific, relationship-based
interactions with the client, as opposed to a campaigns, thereby making it difficult to obtain
more typical barrage of generalized commu- funding and improve the overall customer expe-
nications and product promotions. rience.
• Customer focused organization and Getting started: A practical approach to driving
operating model innovation: Banks need customer advocacy
to assess what customer relationship attri- At first glance, delivering the right client
butes make them different or especially experiences to build client advocacy seems
valuable from the clients’ perspective. Then intimidating and laborious, especially given
they must deliver consistently on these the modern bank’s complex mix of client
attributes at the point of interaction. When segments, product lines, interaction points and
relationship cycles. The first step has to be one
they deliver on these attributes, they must
of understanding and analysis, one that takes
understand what value accrues to both the
an outside-in view of the client experience,
banks and their clients, continue to improve
both in terms of what the client expects it to
the experience and integrate the positive
be and what the operational reality currently
attributes across the enterprise.
is. This, in turn, provides the organization
To drive the customer experience operating a basis to define a forward-looking opera-
model, banks must create internal operational tional blueprint of the new client experience
benchmarks that include customer metrics delivery capabilities and ultimately prioritize
that are easily understood and can be acted investments toward actions that will have the
on. From an external perspective, banks need greatest impact on the experience, as well as
to assess the inclusion of client advocacy the greatest return for the company. At a high
and profitability metrics from other banking level, the Customer Experience Management
segments, as well as within the retail segments discipline includes the following steps:
of other industries. Internal performance
4 IBM Global Business Services
17. 1. Perform a baseline advocacy measurement 8. Develop a value case and refine the target
analysis, such as the CFiq, by selecting an to determine the interactions that will deliver
счет коэф. по их методике
appropriate client sample set from a bank’s the most for the client and company and,
н выборке из клиентов
database that draws from the bank’s collec- ultimately, prioritize the areas the company
tive lines of business and channels. should focus on first, those they should
2. Apply customer experience principles to implement later, and those not worth doing.
customer events, aligning the company’s A value case should be developed to show
brand promise with the customer’s expecta- the economic returns on customer experi-
tions. ence investments.
3. Identify key experiences and events for 9. Implement the capabilities, deliver and
бор моментов истины для each customer segment, creating a compre- measure these intentional client experi-
р зных клиентов в к т лог и hensive catalog of moments of truth in a ences. Begin rolling out the new interaction
н несение н рту событий Customer Event Map. capabilities and measure their results on
клиент advocacy and client attitude. As a key
4. Understand customer expectations, needs measure, continually run advocacy analysis,
and wants in order to develop an outside- such as CFiq, in a similar fashion to the
in view and distinguish which actions will baseline in step 1 to obtain a living trend
change client attitude toward advocacy. line of advocacy performance over time
To quickly focus on the key experiences (every three months, six months, etc.) and to
ополнить предлоения клиент м among the thousands of customer interac- respond in realtime to customer needs and
н б зе н лиз рты ключевых tions, we recommend both an internal and make appropriate corrective actions.
событий external data overlay on the Customer Event
Map to develop a prioritized Customer Event Figure 6 shows an example of one type of
Heat Map (see Figure 6). This will highlight client experience analysis and plan. The “client
the most significant value propositions for event heat map” provides a multilayer level
the bank and its clients. of detail for client events, with the top level of
client lifecycle shown at top, and events shown
5. Blueprint the customer’s “target experience,”
below. The map is keyed by priority, showing
or in other words, describe the type of inter-
пис ние соотв действий н areas that contain loyalty and retention
action that will build advocacy in the future
стороне б нк - релев нтных drivers, opportunities for differentiation, and
client-facing operation. the company’s relative maturity compared to
момент м истины и ожид ниям
от них 6. Perform a gap analysis to determine the competitors. A map like this can have multiple
operational shortcomings and requirements uses. At the strategic level, this map can be
needed to fulfill the target interaction. used to show stakeholders, both leadership
and field staff, how the entire client experience
7 Develop the operational blueprint that will
.
comes together. At the tactical level, the map
allow the organization to deliver the target
provides clear categorization of bank activi-
client interactions with the desired attributes.
ties that can be planned for operationally and
ост вить опер ционный пл н The operational blueprint includes business
prioritized.
требуемых опер ций и их три rules, process and organization, data, appli-
бутов. cation and infrastructure decisions.
5 Unlocking client advocacy in Canadian retail banking
18. с точки зрения клиентского пути
FIGURE 6.
Client event heat map for retail banking (illustrative partial sample).
Client lifecycle stages
Grow,
Aware Evaluate Open Initiate use Transact and support Close out
renew and
account
рт может строится н р зных stay
оргуровнях: от отделов до специ Identify and quantify client events - performance and impact
листов. Observe Receive a Obtain forms/ Receive Obtain Reach end of
Experience Initiate loyalty Obtain
the bank in welcome quality of applications statement statement solution to term for term
market program optimize my
service inquiry product (e.g.
activities account current product
Understand Create my Deposit/ assistance (e.g. loan, mortgage,
Save profile tracking item) portfolio Guaranteed
current financial Transfer withdraw cash
Experience information and based on my Investment
status and balances changing life
a life event objectives complete later if Certificate,
Provide Use credit (Visa, Change stage triggers/
that triggers needed Registered
documentation/ Create Homeline) options or needs
awareness of Education
Obtain exchange preferences
the bank Assess automatic Savings Plan,
life event information in response Conduct
eligibility ad payments Write cheques Registered
information to changing financial
apply for pre- Savings Plan)
needs planning/
Obtain solution qualification for Complete Use debit cards
applications Obtain issue analysis
advice for service Consolidate
financial Transfer resolution accounts with
Receive
products and funds other financial
Receive recognition
services institutions
expiration for value of
notification on business
Opportunities for differentiation Events related to loyalty and retention drivers time-limited Leave the
offers before bank due to
Gaps to competitive benchmarks Events related to loyalty drivers only conversion to dissatisfaction
new fee or rate
structure
Source: IBM Global Business Services.
The Customer Experience Management value. Banks must break with traditional,
discipline is aligned with IBM’s CRM Done one-sided, inwardly focused client initiatives
Right framework for developing sustainable, and drive toward a well-balanced, customer
successful CRM operations (see Figure 7). It focused model to capitalize on the potential of
can be applied to both day-to-day decision their most valuable asset – their clients.
making and to a large-scale transformation
program. Unlocking this growth potential is not
easy. We believe it can be more effectively
The CRM Done Right framework has five main accomplished through the adoption of a client-
interlinked components that describe key advocacy-based measure, such as the CFiq,
steps to completing transformation projects at that highlights the operational improvements
large companies. A complete, detailed account key to enhancing the client experience and
of this approach is available in the “CRM Done the value of the relationship.
Right: Executive Handbook For Realizing The
Value of CRM.” With the right approach, sustainable organic
growth is more attainable. Those institutions
Conclusion that understand their advocacy scores and
For banks to grow, a strong commitment to the impact these measures have on the client
strategic client growth options must be articu- base, develop a compelling customer expe-
lated through a well-structured approach, rience, and operationalize the necessary
designed to improve client attitudes toward improvements to create a customer focused
bank capabilities and assess clients’ potential enterprise will have a distinct advantage.
6 IBM Global Business Services
19. About the authors About IBM Global Business Services
Emeline Tjan is an Associate Partner in IBM With business experts in more than 160
Global Business Services Canada. Emeline countries, IBM Global Business Services
can be reached at emeline@ca.ibm.com. provides clients with deep business process
Mary Anne Peek is a Senior Managing and industry expertise across 17 industries,
Consultant in IBM Global Business Services using innovation to identify, create and deliver
Canada. Mary Anne can be reached at value faster. We draw on the full breadth of IBM
maryannepeek@ca.ibm.com. capabilities, standing behind our advice to
help clients implement solutions designed to
Scott Lieberman is an IBM Global Business deliver business outcomes with far-reaching
Services, CRM Business Solutions impact and sustainable results.
Professional. Scott can be reached at
slieberman@us.ibm.com.
Robert Heffernan is the CRM Global Leader
for the IBM Institute for Business Value. Bob
can be reached at robert.heffernan@us.ibm.
com.
Contributors
Steve Ballou, IBM Global Business Services
Director, IBM Institute for Business Value
Bruce Baron, Consultant, IBM Global Business
Services
Jonathan Hill, Consultant, IBM Global Business
Services
Scott Walters, Associate Partner, IBM Global
Business Services
Executive sponsors
The research effort was sponsored by Steve
Lavalle, Philip Grosch and John Armstrong,
all of whom are partners at IBM Global
Business Services. Philip leads the Canadian
CRM practice and can be reached at philip.
g.grosch@ca.ibm.com.
7 Unlocking client advocacy in Canadian retail banking
