Customer Management & Experience

Transcription

1 1 Customer Management & Experience Roland Berger perspectives on client-centric banking Dubai, 07 May 2013

2 2 Executive Summary Customer Management is the conscious effort to maximize revenue by building a bank's interaction with clients on a thorough understanding of what motivates them do business with the bank Conventional focus of customer management on business banking needs only (and credit!) does not suffice to make SME relationships profitable To make Customer Management matter in a bank's operational, everyday reality, it needs to spell out the "customer experience", i.e. how client needs and preferences will actually be addressed For an effective design of "experiences", the bank needs to understand what clients really value beyond their economic and industry sector profile Customer Management guides the bank to action by identifying the critical enablers and that need to be in place to deliver these "experiences" consistently, and any need for improvement

3 Customer Management defines the targeted customer experience for each SME segment/ profile along the customer life cycle Defining customer experiences Key Consideration > Customer management is to define the customer experience along the client life cycle > Is relevant accross business banking and retail banking offering > Customer experience as a segment & profile-specific bundle of available products & pricing bank & value added services coverage and communication channel Relevance > Perceived level of customer experience is the central test whether the bank's value proposition is effective > Opportunities for cross-selling and increased share of wallet only stem from satisfied clients > Trigger word-of-mouth of promoters as most effective marketing tool Steps towards best practice > Define target "customer experiences" as a key element in value proposition design > Value-based profiling captures banking-relevant features of clients beyond economic-sector factors > Attention to key enablers/ challenges: identify change initiatives that address the "critical attributes" for delivering on client expectations 3

4 In order to realize the full potential of SME relationships, customer management focuses on business and retail banking needs Successful SME Banking: understand the full set of client needs & their potential Opportunity to grow share of wallet beyond traditional lending focus Fee income On-balance sheet, risk capital business Fee income Financial Advisory / Wealth Mgmt Private Insurance Private Accounts Consumer Finance Mortgages Business Loans Trade Finance Business Accounts Payments & Collections Business Insurance Retail Banking Services Business Banking Services Cross-Segment Cross-Selling Capture private business from professional clients including Affluent/Mass Affluent Capture professional business from private clients including small corporates and free professions 4

5 Defining and monitoring "customer experiences" is essential for sustainable success in a relationship-business KEY ASPECTS COMMENTS TOOLS Understand client needs and expectations Analyze, segment and prioritize clients Define profilespecific customer experiences Detailed investigation of factors that shape client banking choices and needs beyond income and life-cycle: values. Compare attitudes to bank and its competitors Matches data on clients with bank financials to prioritize clients and set break-even costs. Key criteria are overall client value p.a. and frequency of interaction with the bank Customer experiences are value propositions with focus on delivery to client. They should match commercial value of clients - cost-effective ways of fulfilling his priority needs. > Focus groups, surveys > RB Profiler > Client data > Product data > Profitability analysis > Survey: critical attributes > Int'l/ domestic benchmarks > Cost-benefit / break-even 4 Identify & address gaps for bank to deliver Assess bank's status quo for need to improve key enablers that matter for "critical attributes" to clients: staff qualification, coverage models, process quality & speed, communication > Operational performance analysis > Management interviews 5 Prepare, pilot, implement Prioritize and plan implementation of change initiatives. Determination of relevant KPIs. Early piloting and testing > RBpoint / Project Mgmt > Budget, performance mgmt 6 Measure, learn & adapt Standardize feedback on client satisfaction, identify lessons learned and action. Related KPIs in performance mgmt > Financial & non-financial KPIs > Focus groups, surveys > Internal surveys 5

6 A systematic planning of the customer experience paves the way towards satisfied, loyal and profitable clients Project steps and tools towards defining the customer experience Insights on Behavior and Needs Survey clients on their key expectations Identify criteria on which bank underperforms peers Define ways to address "critical attributes" with differentiated offers Define value proposition / service for key client profiles Translate into Customer Experience plans (objectives, activities, time/frequency) Further specify into a Customer Engagement Plan for sales force, RMs, branch staff Enhance Plan Monitor Implement 6

7 Understand client needs and expectations Consistently managing a satisfying client experience starts from more detailed client insight than conventional segmentation RB PROFILER APPROACH: 360 MARKET AND CUSTOMER INSIGHTS For SME clients: Profile of Owner/ Entrepreneur + Firm Values, needs, interests a Values & Needs Interests & attitudes Brand usage & awareness Borrowing, Saving, Inv't behavior etc. 360 Product preferences & usage Stage of company life-cylce, age of owner b Usage of communication & distribution channels Business revenues, private and business budget Behavior c Industry sector and socio-economics COMMENTS > Conventional economic-sectoral segmentation leaves out many key drivers of client behavior and is too largegrained to adequately represent the diverse spectrum of SMEs > Systematic client satisfaction requires a more detailed understanding of relevant needs and expectations > Combination of different segmentation criteria provides holistic view > The most attractive client segments can then be offered dedicated, clearly differentiated value propositions that set the bank apart from its peers and will enhance client satisfaction, loyalty and profitability 7

8 Understand client needs and expectations Deployed at leading banks, RB Profiler creates actionable transparency on clients RB Profiler deployment in SME and Retail Businesses A IDENTIFY B PRIORITIZE C APPLY > Customize set of values to business > Survey clients (incl. focus groups) > Identify "Archetype" client profiles > Understand the Archetypes > Determine their economic relevance > Select / prioritize target clients > Compare fit with bank status quo > Determine strategic options > Design fitting value propositions 8

9 9 Understand client needs and expectations RB Profiler combines a large data pool on client values, needs and preferences with project-specific research via surveys & focus groups Roland Berger's RB Profiler methodology: tapping a wider set of client data Sociodemographic details Age, sex, education, etc. Technology usage Internet usage key figures Economic/ sectoral details Revenues, personal income, etc. Financial services Usage of financial products, services etc. General brands usage Usage of preferred brands Values, needs & desires Detailed description of values profile CHINA SPAIN GERMANY COMMENTS > RB Profiler data pool contains information about consumer values and desires, and exten-sive additional data > A data pool of 14 years of RB Profiler expertise in >250 projects and 35 countries is readily available > Individual research for our projects (surveys and focus groups) ensure clientspecific results

10 Identify & address gaps for bank to deliver A successful embedding of "customer experience" in value propositions is not achieved with a CRM tool alone IMPERATIVES Consistently deliver the segment/ profile specific customer experience Deliver these propositions by strong cross-functional collaboration Develop capabilities to continuously deliver target customer experiences KEY ENABLERS / CAPABILITY DRIVERS > Review / Align: periodic review of customer value propositions > Up-skill: training & qualification > Enhance: improvement of the credit application process > Systems: CRM tools for effective client date mgmt > Monitor: ensure implementation of customer experience plan > Measure: Customer-based metrics and feedback loops > Institutionalize: Customer Mgmt Team as internal experts CHALLENGES TO ADDRESS > Product-centric approach in specialist units > Divergence of customer experience across channels and outlets > Integrity and adequacy of client data and data tools > Management of sales force activity > Ability to generate timely feedback 10

11 Customer management has to define and enforce delivery the customer experience with benefits for both bank and customers Advantages of Customer Management operationalized into "customer experience" Bank perspective > Customer management enforces a customer experience that is differentiated by segment/ profiles to attract the right customers > Customer experience targets both business and retail banking needs > Consistent customer experience enables crossand up-selling and mobilizes promoters, making more of our relationships > Differentiation allows us to invest adequately in sales and service according to customer value Greater value capture from customers Customer perspective > The bank knows my specific needs in my business (and private affairs) and hence provides me with relevant proposals > The bank has prepared itself to deliver a consistent level of customer experience throughout my relationship > The bank values me as a customer and I will therefore receive attention and pricing that shows it Increased customer satisfaction Source: Roland Berger 11

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