FINANCIAL SERVICES Customer Experience Management in the Financial Services Industry. Building customer-centricity into your business processes

Transcription

1 FINANCIAL SERVICES Customer Experience Management in the Financial Services Industry Building customer-centricity into your business processes

2 Executive Summary For many financial services institutions, the traditional way to get consumers attention and increase willingness to buy has been through broad-spectrum marketing via mail, television, billboards, online, the phone, etc. Unfortunately, these mass marketing approaches deliver a one-size-fits-all experience that does not take into account the customer s point of view. This is why implementing a comprehensive Customer Experience Management (CEM) strategy is now crucial. At every phase of the customer lifecycle, companies need to deliver intentional and branded experiences that put the customer s interests at the heart of the interaction. CEM is a strategy that focuses the operations and processes of the business on the customer in order to deliver engaging experiences that build brand loyalty, provide clear differentiation and increase the value of the organization to the customer. Pegasystems has developed a robust CEM approach called Chordiant Customer Experience (Cx). Unique in the industry, Chordiant Cx enables financial services institutions to continuously deliver experiences that are dynamically tailored to each customer, appropriate to the situation, unified across channels and graduated to ensure wise resource use. One of Europe s leading banking and investment firms has implemented Chordiant Cx to systematically present offers that match the purpose of the customer interaction and profile. Implemented in both the bank s call centers and online banking Web site, the strategy ensures that offers are fully integrated into each customer interaction. The results have been impressive: The bank now makes more than 100,000 offers per week on inbound calls. Contact center offers have produced follow-up meetings with a 30% sales rate for the recommended product and a 70% sales rate for similar products. Web offers have delivered a respectable response rate of 2% of customers agreeing to additional contact with the bank about a displayed product offer. In this paper, we examine why CEM is important and how it helps to increase customer acquisition, retention and lifetime value. We discuss the components of Chordiant Cx and how they help financial service institutions achieve the kind of results described above. Finally, we provide a series of best practices for implementing CEM in your organization.

3 Introduction Global financial services institutions (FSIs) are seeking new ways to continue their growth and success. Given fierce competition and the need to improve both customer acquisition and retention rates, FSIs have focused on increasing the number and variety of products in order to attract, retain and improve the lifetime value of customers. This turns out to be both an advantage and a drawback. While customers have been willing to take on more products, they are confused as to the best product fit. In addition, their expectations for the quality of treatment by the institution have grown. Customers demand continually higher levels of personal recognition and rewards in financial service products and pricing. And they demand that the company deliver on its brand promise with authentic experiences that demonstrate the company will act consistently in the customer s best interest. FSIs are also struggling with the perception of financial products as commodities. Every FSI knows that all products, no matter how unique, can be quickly copied by a competitor. They are being forced into providing private banking for the masses personalized, unique services, products and advice for each customer in order to maintain the customer base, grow wallet share and keep the customer from defecting. CEM is a strategy that focuses the operations and processes of the business on the customer in order to deliver engaging experiences that build brand loyalty, provide clear differentiation and increase the value of the organization to the customer. Leading FSIs know that creating a unique and lasting customer experience is the key to differentiation. These companies are determined to enhance the quality of the customer relationship by delivering a set of experiences that focus on the individual. They know that while customers are willing to move to the higher-profit advice level to become a trusted advisor much work on the quality of the customer experience remains. 1

4 Customer Relationships in the Experience Economy As Joseph Pine and James Gilmore explain in The Experience Economy, the relationship with the customer has changed radically. We have passed from the commodity phase through the goods phase to the service economy of the 1970s. Now, we have entered the fourth phase of economic progress, which is experience. In the experience economy, success is measured by a company s ability to create positive emotions in customers. This occurs by tailoring the experience to the individual whenever the customer touches the company and its products. In the experience economy, how customers perceive their relationship with a company is the critical factor in determining brand loyalty and profitability. As a result, FSIs must find ways to provide personalized and unique experiences, products, services and advice for each individual. They must create a new model of the customer relationship that delivers experiences designed to intentionally support the customer s view of the relationship. Traditional Solutions Fail in the Experience Economy The traditional way to get consumers attention and increase willingness to buy has been to bombard them with campaigns, messages and marketing materials through the mail, television, billboards, online, the phone, etc. This is broadspectrum marketing, designed to get messages in front of as many consumers as possible. To a large extent, these messages continue to follow the four principles of marketing that have been around since the 1960s product, place, price and promotion. While there is a need to establish a product and brand presence, these methods are proving steadily less successful as companies find much of the material is ignored. Consumer Relationship - Company View Consumer uses multiple products and services from the company. Consumer doesn t ask for exceptions to policies and procedures Consumer consumption behavior does not incur aboveaverage costs. Consumer heartily endorses company and recommends to family and friends. Consumer Relationship - Consumer View Company designs products and services for them as individuals.. Company makes exceptions to policies and procedures when requested. Company rewards them for ongoing business. Company provides favorable pricing for long-term business. Source: Tower Group 2006 Financial Conference 2

5 Recently, sales and marketing have improved campaigns by targeting specific groups of consumers with the aim of lowering the volume and increasing the response rate. However, marketing success is typically measured on how much is spent rather than how much revenue is generated by all that communication. Sales still occur, but barraged with communications through many channels, consumers have learned to ignore most outbound communications. Response rates to these campaigns illustrate the problem: a response rate of 5% for direct mail is considered an outstanding result, and often rates are much lower even for a targeted campaign. The problem lies in the fact that this approach does not take into account the customer s point of view. Traditional strategies deliver a one-size-fits all experience, not individual customer need and desire. The result is a stark disconnect between the FSI s approach to customer expectations and what customers actually want. Recent research by IBM demonstrates that FSIs are fully aware of this disconnect, and acknowledge that they cannot continue to rely on product and promotion-centric strategies indefinitely to demonstrate brand value and differentiation. The reality is that the quality of the customer experience has become the make or break issue for customer retention. What FSIs need is a new model for delivering an experience that intentionally supports the customer s view of the relationship. Decision-makers Top CRM Concerns Customer Experience now tops business leaders priorities in growing consumer value over time, ranking higher than gathering more consumer information or acquiring new consumers. (IBM Consulting Services, 2005) Ensuring Promises Firm s Share of Customer Base Improving Total Customer Experience Gathering More & Better Information Capturing & Leveraging Customer Insight Predict Loyalty & Retention Acquiring New Customers Measure Business Outcomes 3

6 Rethinking the Customer Relationship FSIs become more customer-centric when they deliver compelling customer experiences that surpass customer expectations. This requires rethinking the customer relationship so that each customer is viewed as an asset and every interaction as an opportunity to increase the value of that asset. Conversely, every interaction is also an opportunity to decrease the asset value if the message and approach is wrong. Thinking back to the highly regarded 5% response rate for a typical marketing campaign, this means that 95% did not respond. When we consider those customers as assets, then the non-response rate of 95% represents a significant reduction in asset value. This is why implementing a comprehensive strategy for managing the customer experience is now crucial. At every phase of the customer lifecycle, FSIs need to deliver intentional experiences that put the customer s interests at the heart of the interaction. 4

7 From Product to Customer: The Role of CEM Traditionally, the solution to managing the relationship with the customer has been through Customer Relationship Management (CRM). However, CRM strategies and solutions are designed for a one-size-fits-all experience. The result has been a sharp mismatch between the institution s approach to customer expectations and what customers actually want, resulting in the failure of many CRM implementations. Customer Experience Management (CEM) is the new paradigm for business in the experience economy. CEM is not CRM. Where CRM is enterprise-focused and designed to manage customers for maximum efficiency, CEM is a strategy that focuses the operations and processes of the business around the needs of the individual customer. CEM and Customer Perception Organizations know that customers are looking for feel good experiences in their relationships with a company. The role of CEM is to develop processes that engender a positive perception each time a customer touches the company. By delivering engaging experiences across the customer lifecycle, the company creates a collection of positive perceptions that build brand loyalty, provide clear differentiation and increase the value of the company to the customer. CEM and Customer Processes Customer-facing processes used to be about efficiency and volume reduce call time, push out as many direct mail pieces as possible. In the CEM model, process focuses on the experiences each customer has with the company throughout the lifecycle from pre-purchase information consumption through purchase to postpurchase service via multiple channels. Process, then, becomes the vehicle by which companies create the feel-good experiences. CEM requires that processes are designed to take into account their effects on customers and employees. Each process must be tailored to the individual customer to ensure a positive experience. At the same time, each process must also be designed so that the employee can engage with the customer in ways that are consistently positive, reinforcing and successful. 5

8 Cx requires each customer experience to be: Proactive Predictive Unified Dynamic Real-time Situational Guided Adaptable Conversational Mutual Specific CEM and Brand Identification Traditionally, brand is thought of as that which differentiates a business, and this differentiation is conveyed through the presentation of the company to consumers via advertising, promotions, package design and so forth. But in the experience economy, brand has become much more than just the institution s physical face. Today, the perception each customer forms of the company and its products based on his or her aggregate experiences is crucial to building brand. The challenge when implementing a CEM strategy is to create experiences that amplify the customer s estimation of brand through intentional and consistent delivery of brand-specific experiences across all touch points. The question, Are we on-brand? must not only be asked about each ad or promotion, but each interaction with a customer. The process must be tailored to both the individual and the brand so that the customer experiences the brand throughout the interaction. When branding is built into the customer experience, FSIs can achieve the ultimate goal customers who consistently perceive value in the company s brand leading to the greater loyalty and lifetime value that generates long-term profitability from each customer asset. 6

9 The Chordiant Cx Strategy for CEM To meet the needs of an experience-driven economy, Pegasystems has developed a robust CEM approach called Chordiant Customer Experience (Cx). Unique in the industry, Chordiant Cx enables FSIs to continuously deliver engaging, branded experiences that delight the customer. Chordiant Cx addresses five key CEM factors: Each experience must be tailored to the individual. The experience must be perceived as specific to the person. This is not simply an agent greeting the customer by name. It requires that the needs and objectives of the individual within the current interaction combine with knowledge of the customer to govern the flow of the conversation, the actions taken and the offers made. By leveraging large amounts of customer data from multiple sources and bringing this data accurately into play via logical interpretation at the point of interaction, each customer can be treated as a segment of one with all aspects of the experience based on that person. Each experience must be appropriate. Odd as it may seem, the relationship with the customer is not just the best, most complete relationship every time. Rather, the relationship is the right relationship for the right individual at a particular point in time. Offer incentives only to those who require them. Spend time with those who will be influenced by your attention. Each experience must be graduated. The experience must be graduated to use resources both time and money exactly where and when they will help. For example, the relationship may start with a low-key consultation in which a customer simply learns about available services. Over time, as the customer gains confidence and trust in the company s understanding of his or her needs, the relationship can grow to a mutual one of discussing the plusses and minuses of different products. Finally, as requirements are satisfied, the relationship can grow again into a maintenance mode where contact is made only when required and is styled to be unobtrusive with the promise that the organization is always there when needed. Each experience must be dynamic. The experience should be deliberately variable, driven by dynamic just-in-time assessments of the customer s situation, interests, risks and value. As each successive interchange with the customer may alter the information on which assessments are based, these assessments must take place in real-time so the customer perceives that the organization is responding directly to him or her and making the most personalized, up-to-date decision possible. 7

10 Each experience must be unified. The relationship must span all channels and processes that affect the customer. Whether a self-service, agent-assisted or back-office process that changes some aspect of the relationship, all need to be unified and transparent so that an interaction begun in one channel can be viewed and completed seamlessly in another. Using Chordiant Cx to implement a CEM strategy around these key factors, FSIs can elicit specific perceptions on the part of the customer as follows: Customer Perception Mutual Informed Conversational Responsive Perception Details Customers perceive that the relationship is two-way with both information and value traded. They believe that the company is investing in the relationship. Customers believe that all representatives of the company are informed about them personally, know who they are and what they have said and done in the past. Customers believe they can engage in conversations with dynamic information exchange that ensures the company is responding to their particular situation, questions, statements of need, preferences and objectives. Customers perceive that responses from the company, whether statements, questions, actions or offers, reflect in-depth knowledge and connection to the individual. 8

11 How Pegasystems Delivers Cx Pegasystems delivers Cx through three key enabling technologies designed to create intentional interactions that are individual, appropriate, dynamic and unified. These enablers are: Real-time predictive decisioning that dynamically interacts with each customer on an individual basis. Unified business process automation that results in a singular, enterprisewide view of the customer to erase product, channel and process silos. A flexible enterprise platform that leverages information in corporate and third-party systems in every customer interaction without the need for massive overhaul or boil the ocean implementations. Real-time Predictive Decisioning Customers demand that the company deliver on its brand promise with authentic experiences that demonstrate the company will act consistently in the customer s best interest. Chordiant Cx leverages information about the customer, the situation, the level of risk and other criteria to make real-time decisions during a customer interaction. Real-time decisioning combines a company s business rules with in-context customer data and predictive analysis of likely behavior to generate individualized, appropriate next-best-actions and recommendations. For example, when a customer complains about an overdraft fee, real-time decisioning can use information about the individual s total value to the institution across product lines, how often the person has asked for fee reversals, and predictions about likely defection to determine the best response. Real-time decisioning can then turn the service interaction into a sales opportunity with a recommendation that the representative offer the customer additional overdraft protection for a low monthly charge. As a result, FSIs can treat each customer in accordance with that person s worth to the institution for true segment-of-one marketing, sales and service that satisfies expectations as profitably as possible. Conversations and interactions that were once static and product-based now become dynamic and customercentric. 9

12 Predictive decisioning can deliver customer focus for many different types of interactions. For example: Loan eligibility scoring, risk and pricing can be accurately determined at the point of sale. Real-time decisioning can take into account a consumer s FICO score, ability to pay, loan-to-value, payment history and other demographic data to determine an internal credit score as the customer applies for a loan. The customer knows immediately if the loan will be approved and gets a lock on the rate, increasing satisfaction. At the same time, the FSI gains the ability to increase qualified 1003 mortgage application conversion rates and broaden underwriting rules to penetrate more lending markets while effectively managing risk. In collections, real-time decisioning can maximize cash collected while balancing the cost of collection against the likely profit or loss that may accrue from the account in question. Decisioning can predict the profitability or likelihood of profitability of delinquent customers to justify investment in rehabilitation as well as recommend a rehabilitation strategy. In a bank branch, real-time decisioning can improve re-investment rates by prompting the teller to make a highly relevant retention offer to a customer who is redeeming a CD. Using information about the person, products owned and past investment choices, real-time decisioning can select the best investment recommendation and alert the teller to make the offer at the appropriate moment during the redemption process. Supply probability of self-cure & collection method success Recommend chargeback Disputes Collections Sales Supply dynamic profile & proposition propensities When real-time decisioning is centralized across functions, it can drive responses and interactions throughout the customer lifecycle. Supply cost-benefit analysis, service level recommendation, and retention offer Teller/Call Center Services Centralized Predictive Decisioning Account Origination Supply dynamic price, terms, and documentation Supply fraud likelihood Fraud Fulfillment Underwriting Supply probability of default & expected loss 10 Prioritize routing

13 Unified Business Process Automation For any FSI, business process automation that integrates front and back-end processing is a necessity, especially for the myriad service-oriented tasks such as identifying and verifying an account holder, ordering checks, changing name or address information, making a transfer, researching a missing deposit or stopping a payment. A key to retaining a strong brand is to leverage these processes so that they represent the brand during each customer interaction. When inbound processes become models of the brand, FSIs can greatly increase customer satisfaction, loyalty and revenue. Pegasystems enables this through unified process automation that: Ensures seamless cross-channel interactions Reuses common processes across lines of business (LOBs) and channels Balances customer expectations with business objectives Chordiant Cx starts by ensuring that process automation is cross-channel. Information captured, actions taken and tasks completed are visible and actionable from any channel. For example, a customer starts to complete an account switch kit online and then decides to visit the branch for further information. At the branch, the data captured during the online interaction is fully visible to the representative who can complete the sale by seamlessly continuing the process at the exact point the customer left off. Second, Pegasystems extends process automation across LOBs, enabling them to share and reuse common data and tasks. Functions can be reused across product types and channels, such as the delinquent account promise to pay or payment plan procedures for different loan products. This is particularly useful for account origination processes. While FSIs typically maintain a separate account opening process for each product, many tasks and activities are the same across these products, such as performing a consumer search, verifying ID and credit, reviewing interaction history, initiating data capture, linking accounts, generating documents, applying appropriate regulations and updating backend systems. At the same time, Chordiant Cx makes sure cross-channel, cross-lob process automation is flexible enough to account for special functions or requirements. An institution can accommodate unique policies, conditions, rules, workflow and tasks within a common business process to account for the specific needs of a product line, channel, customer segment, request type, timing or other criteria. With this level of flexibility, FSIs can effectively manage singular requirements within the common process so as to optimize the return on investment in process automation without increasing risk. 11

14 For example, both mortgage and auto loan originations need to review and ascertain assets as well as disperse funds. Mortgages must capture details about the collateral (property type, location, etc.), the findings of an in-depth valuation and information about the legal representative. Auto loans capture different details about the collateral (the car), and use a much simpler valuation process that only requires checking the car s value against an external valuation service. There is no need to capture legal representative data as funds can be dispersed directly to a dealer, the customer or the seller. While both loan types share the common tasks of reviewing the collateral, ascertaining assets and dispersing monies, they do so in different ways and with different information. Chordiant Cx allows the institution to account for these variations, enabling adjustment within the common process for each product s review, ascertainment and disbursement variations. Traditional Static Linear Process Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Real-Time Decisioning drives flexible process targeted to customer Customer A Step 1 Next Best Action Step 2 Step 6 Step 8 Step 3 Step 7 Step 9 Step 4 Step 10 Step 5 By combining real-time decisioning with business process automation, Chordiant Cx eliminates static, productfocused processes in favor of streamlined processes that flex and adapt to the customer, the interaction and the company s objectives. Customer B Step 1 Next Best Action Step 6 Step 7 Step 8 Step 9 Step 10 12

15 Finally, Pegasystems combines process automation with real-time decisioning for interactions that balance customer interests with business priorities. By marrying process automation with decisioning, FSIs can continue to deliver highly customer-centric experiences while reducing risk and improving operational productivity. This combination is particularly useful for complex, regulatory-intense processes such as fraud and dispute management which are of significant importance to the customer relationship. A recent survey finds that after card loyalty, customer retention is highest for credit card providers that have strong fraud and dispute processing capabilities. Using real-time decisioning and unified processing, FSIs can efficiently manage fraud and dispute interactions to improve recovery rates while providing the support demanded by customers. For example: Scripts that automatically guide representatives through best-practices and make dynamic recommendations ensure expectations are properly set when a customer initially reports a fraud exposure or transaction dispute. Integrated with industry-standard fraud detection engines, real-time decisioning uses data elements from the detection engine to automatically initiate a case specific to the risk type identified, package the defined transactions and necessary documentation, back up the data and route the case to the appropriate representative. Next-best-action recommendations and rules-driven processes guide representatives through the disposition of a fraud or dispute transaction to eliminate erroneous chargebacks that do not comply with association rules, timelines or documentation requirements. 13

16 Enterprise Platform One of the stumbling blocks to successfully implementing a CEM strategy is the patchwork of disparate systems of record that exist in many companies. Older technology, these applications are built on rigid architectures that provide the scale required, but operate as silos, incapable of the data and process transparency needed to deliver an intentional customer experience. Chordiant Cx delivers a true enterprise platform as the foundation for real-time decisioning and unified process automation. The Cx platform s service-oriented architecture (SOA) conforms to J2EE, XML and other industry standards to facilitate interoperability with existing enterprise and third-party systems. This open, standards-based platform eliminates the need to move or replicate data, allowing company representatives and online customers to interact seamlessly and in real-time with information in native systems. Built for the rigors of enterprise computing, the platform also provides the scalability and adaptability needed to support complex processes, millions of customer interactions, thousands of users and hundreds of product offerings. The Cx platform provides the common set of reusable SOA business services that make it possible to share data, processes, rules and business functionality across LOBs, channels, enterprise systems and third-party services. Using these reusable services, FSIs can compress duplicate and redundant processes into a single, unified process while maintaining the unique characteristics of each. 14

17 Chordiant Cx in Action One of Europe s leading banking and investment firms uses the Chordiant Decision Management suite to dynamically present offers tailored to individual customers in both the call center and online. The impetus for this project was the decision to more effectively leverage contact center and online banking customer contacts for sales. In the contact center, agents could manually suggest standard, public campaigns, but could not tailor offers to the customer and did not receive guidance about when and which offer to present. Similarly, on the online banking site, customer activities were not tied to specific offers. The bank developed an initiative to systematically present offers that are tied directly to the purpose of the customer s call and individual profile. In concert with one of the largest international management consulting firms, the bank considered a custom, in-house implementation and decisioning solutions from multiple vendors before selecting Pegasystems. Dynamic Offers Respond in Real-Time to the Customer and the Interaction Implementation began in the contact center where three types of offers are now actively promoted to agents: Process-specific offers. When a customer executes a specific transaction, such as ordering traveler s checks, Pegasystems decisioning generates a relevant offer in real-time and prompts the agent to deliver this offer as part of the transaction process. For example, if the customer has a positive risk assessment, the agent will be prompted to offer a credit card with travel protection. However, if this offer was made to the customer a few days ago, or the customer just ordered a new credit card, the decisioning engine takes this information into account to generate a different recommendation which is still appropriate to the interaction. Customer-specific offers. Leveraging data about the customer stored in enterprise systems, Pegasystems dynamically generates offers based on real-time information about the individual s propensity to buy a specific product. For example, using information about the customer s existing product portfolio and current account balance, an offer is generated for a particular investment fund with a 10,000 Euro minimum. These offers are highly adaptable and can use the customer s responses to dynamically influence and modify the recommendation. If the customer indicates he or she does not want to invest more than 5,000 Euros, this parameter is used to generate a new offer for a different product that better meets the customer s needs and the bank s product requirements. 15

18 Traditional offers. If Pegasystems decisioning determines that neither process nor customer-specific offers are applicable, agents are prompted to offer the most appropriate of the current public campaigns. This choice is always the offer of last resort because it is the least targeted. With offers fully integrated into each customer interaction, agents are guided through the sales process, reducing training time and eliminating the need to search for and guess which offer might be best. The guidance ensures agents are provided with all necessary information about the product and that offers are made within the bounds of local, state and national regulations. Agents can choose not to make an offer. However, they must record why the offer was not made to justify their decision, such as queue hold times in the call center had reached a threshold or the tenor of the conversation was not appropriate for selling. The bank implemented the same offer strategy for its retail online banking customers within weeks of the contact center roll out. Now, targeted offers matched to the process and the individual are displayed as customers review accounts and execute online transactions. The results of the implementation for improving sales in both the contact center and online have been impressive: The bank now makes more than 100,000 offers per week on inbound calls to the contact center. The use of dynamic offers in the contact center has resulted in follow-up meetings that have generated a 30% sales rate for the recommended product and a 70% sales rate for similar products. On the Web, the offers have resulted in a respectable response rate of 2% of customers agreeing to additional contact with the bank about a displayed product offer. 16

19 Implementing a CEM Strategy Implementing a CEM strategy and program is not the same as implementing a new database, data warehouse, application or architecture. CEM requires a different implementation methodology than traditional technology. For CEM to be deployed successfully, FSIs need to engage the entire organization and place the customer at the heart of all implementation decisions. First and foremost, successful implementation requires thinking like the customer. Every detail must be considered in terms of the impact on customers, either via agents or directly throughout the delivery and on-going maintenance of a CEM solution as follows: Planning. Customers should be viewed as assets and their relationships with the organization should be planned to maximize the value of those assets. Planning should encompass all types of relationships offered, such as those styled for the young customer, for the small business customer and for the mature customer. Planning must consider the choice and order of presenting propositions through the stages of the relationship including the sequencing of outbound communications to stimulate contact, inbound contacts to enact the relationship and outbound communications to solidify those contacts. By simulating customer base changes and subsequently altering the decisions, different scenarios can be explored, strategies chosen and targets set. Chordiant Cx Business Director enables organizations to monitor Cx performance at a fine-grained level, such as visually monitoring response rates across channels and at different times of day or the cumulative value of conversations. 17

20 Monitoring. Every decision, the subsequent customer behavior and the economic and resource-level implications of that behavior must be captured. Individually, this data forms the basis for future interactions with that customer. Collectively, monitoring forms the basis for reporting on the performance and compliance of the propositions as well as the decision logic and processes used to do so. This provides the basis for simulating the implications of changes in the customer base, as well as the impact of regulatory events and competitor s actions. Control. The implementation must enable the institution to continuously control the customer experience and balance that experience with organizational objectives. Parameters must be embedded in the decision logic to provide decisioning flexibility, allowing decisions to be switched on or off, levels of activity, such as offers or interventions, to be moved up or down, or a process path to be changed based on real-time monitoring of the current situation and future projections. Cross-Organizational Decision Making. Successful implementation also requires organizational silos to be eliminated. For example, if the deployment will result in the same deals for customer acquisition as for retention, then the acquisition and retention teams must work together during the implementation. Change Management. A final, critical implementation factor is appropriate staff preparation for change in organizational behavior. As important as it is to engage customers with compelling experiences, it is equally important to engage staff. CEM will not succeed without the buy-in of the people who must execute the strategy. For example, contact center staff may pride themselves on delivering great customer service. They do not see themselves as sales staff, are not trained for sales and were not initially expected to sell as part of their job. Through appropriate change management training, support agents can be successfully transitioned to an advisor role capable of selling. Agents can be taught that they are delivering even better service by making offers that are perfect for the individual. They an also be trained to make these offers in a conversational manner to which customers are receptive. 18

21 Implementing a CEM Strategy A simple way to guide a CEM implementation is through the following DREAMS strategy: Differentiation. The experience is uniquely transformed through the blending of customer insight with real-time decisions and guided processes that drive next best action for both company and customer. Align your culture and train staff and departments around creating the best experience with each interaction, not just selling. Relevance. Effective customer experience requires the optimal balancing of a customer s intent with the business s objectives as they evolve throughout the life-cycle of the relationship. Do so by leveraging insight in real-time and ensuring the right information is in the right hands at the right time. Esteem. Manage customers as assets and recognize that all interactions with them have an impact on their value. Awareness. Create a corporate memory of each customer so that you are aware of the individual s history and relationship across the enterprise. Align multiple LOBs with customer need and value. Mind s Eye. Brand every process by considering what the experience should be and what the marketing opportunity is, even when a customer is leaving. Plan and blend all communications, including outbound marketing communications, so that they consider the overall relationship with the customer and look at all dialogues to determine the next best action. Strategy. Align all departments to common customer-centric goals and make sure all major decisions consider the impact on the customer. 19

22 Conclusion Today, FSIs recognize that product and price alone will not help them differentiate their brand. With rising customer demand for responsive and personalized interactions, the path to the coveted trusted advisor relationship lies in the customer s experience with the institution. By implementing a CEM strategy through Chordiant Cx, FSIs gain the ability to deliver a new level of service that not only meets, but exceeds, customer expectations for individually-focused interactions. Tiered service guarantees can be achieved with pricing based on multiple customer factors such as the size and depth of the relationship, known customer preferences and overall customer profitability. New products and services can be brought to market faster with the ability to easily adapt common services to accommodate unique product and channel needs. Consistent, personalized service can be implemented across the full range of channels from the branch and the ATM to the contact center and the Web. The result is compelling experiences that align the conversation to the individual. CEM represents the future of the relationship between global FSIs and their customers. Looking forward, those institutions that act quickly to implement a comprehensive CEM strategy will acquire a strategic advantage. Over time that advantage will help them build deeper, more profitable relationships and capture market share from less customer-focused competitors. 20

23 About Pegasystems Pegasystems (NASDAQ: PEGA), the leader in Business Process Management, provides software to drive revenue growth, productivity and agility for the world s most sophisticated organizations. Customers use our award-winning SmartBPM suite to improve customer service, reach new markets and boost operational effectiveness. Our patented SmartBPM technology makes enterprise applications easy to build and change by directly capturing business objectives and eliminating manual programming. SmartBPM unifies business rules and processes into composite applications that leverage existing systems empowering businesspeople and IT staff to Build for Change, deliver value quickly and outperform their competitors. Pegasystems suite is complemented by best-practice frameworks designed for leaders in financial services, insurance, healthcare, government, life sciences, communications, manufacturing and other industries. Headquartered in Cambridge, MA, Pegasystems has offices in North America, Europe and Asia. Visit us at Copyright 2010 Pegasystems Inc. All rights reserved. PegaRules, Process Commander, SmartBPM and the Pegasystems logo are trademarks or registered trademarks of Pegasystems Inc. All other product names, logos and symbols may be registered trademarks of their respective owners.