Independent Market Research Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks Sponsored by:
TABLE OF CONTENTS PAGE EXECUTIVE SUMMARY 1 Summary of findings Country comparisons Value-add: recommendations and next steps RESULTS 7 Interpreting the results GLOBAL RESULTS - TELEPHONE 9 Regional analysis GLOBAL RESULTS EMAIL 16 Regional analysis CONCLUSIONS 20 RECOMMENDATIONS 21 Identify and profile the customer Understand the customer s needs Recommend solutions Address solution questions Follow up the lead or close the sale IMPACT OF ADDRESSING THESE RECOMMENDATIONS 26 SUGGESTED NEXT STEPS 27 APPENDIX A NORTH AMERICA 30 Telephone results Email results APPENDIX B - EMEA 34 Telephone Results Email Results APPENDIX C AP&J 38 Telephone Results Email Results APPENDIX D - RESEARCH METHODOLOGY 42 Companies researched Overview of research framework APPENDIX E - LIST OF BANKS 46 FOOTNOTES 48 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
LIST OF FIGURES Figure 1 Figure 2 Figure 3 Figure 4 Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Global and Regional Averages Anonymous Interactions Country Comparisons Poor Customer Experience Country Comparisons Poor Conversion Rates Country Comparisons Missed Opportunities Country Comparisons Unintegrated Channels Country Comparisons Regional Analysis - Telephone Customer Profiling and Identification: Telephone Product Understanding and Recommendations: Telephone Lead Follow-Up: Telephone Sale Closure: Telephone Regional Analysis - Email Business Process: Identify the Customer, Understand their Needs and Recommend Solutions Business Process: Follow-Up the Lead or Close the Sale Number of Banks per Region as % of Total Surveyed LIST OF TABLES Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Solution Question Resolution Credit Cards: Telephone Solution Question Resolution Term Deposits: Telephone Ensuring a Positive Customer Experience: Telephone Solution Question Resolution Credit Cards: Email Solution Question Resolution Term Deposits: Email Ensuring a Positive Customer Experience: Email Telephone Results North America Email Results North America Telephone Results EMEA Email Results EMEA Telephone Results AP&J Email Results AP&J Countries Researched by Region Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
EXECUTIVE SUMMARY Greater levels of competition and commmoditization of banking products have continued to exert tremendous pricing pressure on Retail Banks. In order to differentiate, Banks must focus on delivering a superior customer experience by forming and maintaining solid customer relationships and tailoring service to the individual. Retail Banks can no longer afford to rely on passing custom. Today s banking customers are increasingly demanding and expect excellent personalized customer care. To guarantee success, Retail Banks must work to meet the customer s needs, providing quality service focused on responsiveness and tailored financial advice. Independent research, commissioned by Siebel and IBM into the world s top 300 Retail Banks 1 suggests that while there are enormous opportunities to drive improvements in revenue and customer intimacy, Banks globally face many challenges ahead. The objective of the research was to evaluate how effective the world s top 300 Retail Banks are at: Resolving customers product related service enquiries. Seeking opportunities to move the customer from a service related interaction to a value-driven sales discussion. Leveraging customer information throughout the sales process. Capturing interactions and identifying them as leads that require prompt and effective follow-up. Ensuring a positive customer experience. Summary of findings The research clearly indicates that Banks globally are failing to realize substantial revenue benefits because of their inability to effectively manage customer enquiries as potential leads, and to ensure a positive customer experience. Specifically research findings suggest that Retail Banks are: Failing to treat phone and email interactions as potential sales opportunities, rather than a pure service channel thereby losing the opportunity to convert customer enquiries into sales by offering the customer cross-sell recommendations. Not leveraging customer data to drive value-based product recommendations and cross/up-sell offers, nor to enhance the customer experience. Unable to capture, route and track customer requests for product information and collateral, and to systematically manage these as actionable leads requiring prompt follow-up. Inconsistent in their response to customer interactions, thereby negatively impacting the customer experience. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 1
GLOBAL AND REGIONAL AVERAGES GLOBAL AP&J N.AMERICA EMEA Anonymous Interactions Are not capturing the customer s basic contact details for identification or follow-up purposes 68% 53% 53% 89% Poor Customer Experience Banks researched failed to respond to customer email enquiries 32% 32% 24% 35% Poor Conversion Rates Made no attempt to understand the features the customer was interested in before making product recommendations 65% 66% 46% 73% Missed Opportunities Made no attempt to cross/up-sell related banking products during the course of the customer interaction 93% 85% 98% 98% Unintegrated Channels No visibility into previous customer interactions from related communication channels 97% 99% 93% 98% Figure 1 Global and Regional Averages Country Comparisons Anonymous Interactions The chart below shows the percentage of Banks per country that are not capturing the customer's basic contact details for identification or follow-up purposes and how each country compares to the global average. Mexico Japan India Canada Singapore Finland France Hong Kong Malaysia Australia USA Global Average Thailand 10.0% 12.5% 37.5% 44.4% 47.1% 50.0% 50.0% 55.6% 56.0% 57.9% 58.8% 68.2% 69.6% Belgium 70.0% Luxembourg 83.3% United Kingdom 85.7% Italy 90.0% Switzerland 90.0% Spain 91.3% Netherlands 94.4% Austria 95.0% Denmark Germany Korea Norway South Africa Sweden 0% 20% 40% 60% 80% 100% Figure 2: Anonymous Interactions Country Comparisons page 2 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
Poor Customer Experience The chart below shows the percentage of Banks per country that failed to respond to customer email enquiries. 2 Japan 13.33% Australia 15.79% Korea 18.18% Hong Kong 19.23% Switzerland 20.00% USA 20.69% Belgium 22.22% Canada 22.22% Germany 25.00% Luxembourg 26.67% United Kingdom 27.78% Singapore 29.41% Spain 30.00% Sweden 30.00% Global Average 31.2% France 33.33% Norway 37.5% India 42.86% Austria 43.75% Malaysia 45.83% Denmark 50.0% Finland 50.0% Mexico 50.0% South Africa 50.0% Italy 51.85% Thailand 52.0% Netherlands 100% 0% 10% 20% 30% 40% 50% 100% Figure 3: Poor Customer Experience Country Comparisons Poor Conversion Rates The chart below shows the percentage per country of Banks that made no attempt to understand the features the customer was interested in before making product recommendations. 0.0% 16.7% 26.1% 30.0% 36.8% 42.9% Mexico Canada Spain Belgium Australia France 0.0% 16.7% 26.1% 30.0% 36.8% 42.9% 45.5% Korea 45.5% 47.1% Singapore 47.1% 50.0% Finland 50.0% 50.0% Luxembourg 50.0% 55.6% Hong Kong 55.6% 55.9% USA 55.9% 64.5% 70.0% 72.0% 72.5% 73.9% 78.6% 80.0% 83.3% 87.5% 88.9% 90.0% 95.0% Global Average Sweden Malaysia Italy Thailand United Kingdom Denmark South Africa India Netherlands Norway Switzerland Austria Germany Japan 64.5% 70.0% 72.0% 72.5% 73.9% 78.6% 80.0% 83.3% 87.5% 88.9% 90.0% 95.0% 0% 20% 40% 60% 80% 100% Figure 4: Poor Conversion Rates Country Comparisons Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 3
Missed Opportunities Figure 5 Oppty Chart The chart below shows the percentage of Banks per country that made no attempt to cross/up-sell related banking products during the course of the customer interaction. Japan Australia Singapore France India Malaysia Luxembourg Belguim Thailand Hong Kong Global Average USA Italy Austria Canada Denmark Finland Germany Korea Mexico Netherlands Norway South Africa Spain Sweden Switzerland United Kingdom 70.0% 73.7% 82.4% 85.7% 87.5% 88.0% 88.9% 90.0% 91.3% 92.6% 93.2% 97.1% 97.5% 0% 20% 40% 60% 80% 100% Figure 5: Missed Opportunities Country Comparisons Unintegrated Channels 10 73.9 88.9 95 96 96.6 99 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 The chart below shows the percentage of Banks per country that showed no visibility into previous customer interactions from related communication channels. Mexico Spain Luxembourg Switzerland Malaysia Global Average USA Australia Austria Belgium Canada Denmark Finland France Germany Hong Kong India italy Japan Korea Netherlands Norway Singapore South Africa Sweden Thailand United Kingdom 10.0% 73.9% 88.9% 95.0% 96.0% 96.6% 99.0% 0% 20% 40% 60% 80% 100% Figure 6: Unintegrated Channels Country Comparisons page 4 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
The sections below discuss these findings in further detail. Identify and profile the customer, understand their needs and recommend solutions Retail Banks globally showed either unwillingness or an inability to effectively capture valuable customer data during the course of the interaction. Agents consistently failed to record specific customer details relating to: Basic name and contact information for lead follow-up and to target future outbound marketing activity. Demographic characteristics to determine the appropriate customer segment for sales and marketing purposes. Product requirements to identify which products would best meet the customer s needs. Of greater consequence is that given Banks did not request the customer s name and contact details during the course of the interaction, Banks had no means of identifying whether the person they were interacting with was an existing customer or a prospect. This prevents the Bank from differentiating the customer experience according to customer value and constitutes a failure to leverage existing investments in CRM systems. Resolve customer questions Retail Banks capacity to provide customers with accurate answers to specific product questions was at best erratic. While most institutions performed well when using the telephone, results were notably worse when handling the same sets of questions by email. The customer is left with a series of questions which are either unanswered, or the responsibility is with the customer to migrate to other channels to identify the answer themselves. This is likely to have an impact on the customer experience, as well as potentially increasing the cost to the Bank of providing service if the customer is forced to migrate to a higher cost channel. Follow-up the lead and close the sale Retail Banks face serious issues with regard to recognizing and following up potential sales opportunities. Regardless of region, very few customer requests for marketing material or application forms were fulfilled. Similarly, only a handful of Banks globally made a follow up phone call to the customer following the initial enquiry. This is despite the fact that the enquiry is relatively well qualified being sourced directly from the customer, as opposed to leads generated by outbound marketing activities which are less qualified and come at a higher cost to the Bank. Retail Banks need to become more focused on closing potential sales. By not treating customer enquiries as potential leads Banks are losing out on the opportunity to increase number of products per customer, subsequent customer value and ultimately new revenue. Ensure a positive customer experience Retail Banks were generally able to provide customers with an adequate level of basic customer service. However, by and large, Banks were unable to capitalize on an opportunity to stand out from the crowd by leveraging the customer interaction to differentiate the customer experience. Most glaringly Banks showed an inability to manage cross-channel customer interactions, through an inability to link phone calls made and emails sent by the same customer. Integration of channels is an imperative in the success of Banks to attract and retain customers. Banks need to have the ability to recognize an enquiry started in one channel and close it in another channel. Failure to do so can lead to a customer feeling that their bank doesn t know who they are. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 5
The research clearly indicates that Banks are not effectively leveraging their customer interactions to increase their products-per-customer ratio, maximize revenues, or build customer loyalty. Bank executives who recognize this, and take quick and effective action to address the challenges in their customer relationship management processes, will reap significant financial benefits. Value-add: recommendations and next steps In addition to presenting research findings and conclusions, this document offers a range of recommendations and next steps to help Bank executives develop a roadmap for overcoming the challenges identified by this research within their organization. page 6 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
RESULTS Interpreting the results The objective of the research was to evaluate how effective the world s top 300 Retail Banks are at: Resolving customers product related service enquiries. Seeking opportunities to move the customer from a service related interaction to a value-driven sales discussion. Leveraging customer information throughout the sales process. Capturing interactions and identifying them as leads that require prompt and effective follow-up Ensuring a positive customer experience. Contact was initiated through the widely used customer communication channels of telephone, web, and email using an Anonymous Buyer survey. The term 'Anonymous Buyer', also described as 'Mystery Customer', is a term used to describe where the researcher takes on the form of a prospective customer, interacting with the organization as a customer would be expected to. Both Credit Cards and Term Deposits (or the equivalent product per country) were used as the basis for initiating the product related enquiry. A comprehensive research and assessment system was designed and documented to ensure that research objectives were achieved and that assessments were applied consistently across all targets 3. A range of measures were determined to evaluate the performance of each Bank as follows: Identify and Profile the Customer Capture customer details Reference previous interactions Understand customer s profile Understand the Customer s Needs Understand desired product features Recommend Solutions Recommend solution Cross/up-sell related solutions Resolve Solution Questions Resolve solution questions & concerns Follow Up Lead 4 or Close the Sale Send marketing collateral Personalize collateral fulfilment Follow up lead Close the sale Ensure a Positive Customer Experience Number of call attempts required Number of IVR menu hierarchies Call time allocated between IVR, on-hold, or speaking with an agent Email successfully sent Email never responded to Number of days to respond to email Email responses referring to alternative service channels To this end, Banks have been evaluated according to two criteria: Sales Effectiveness the ability to effectively manage customer enquiries, across channels, as potential leads and track, route and promptly follow-up. Customer Experience the ability to provide prompt resolution to product enquiries and leverage customer data to differentiate the customer experience. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 7
The results have been analyzed at a global level with regional comparisons drawn across the three regions North America (N.America), Europe Middle East and Africa (EMEA) and Asia Pacific and Japan (AP&J). Results are categorized by channel - telephone or email. Results have also been provided on a country-specific basis to enable comparisons between the three regions included in the research. Please refer to Appendix A, B and C for regional tables containing country results. page 8 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
GLOBAL RESULTS - TELEPHONE Regional analysis Sales Effectiveness - Across all three regions, many Retail Banks missed an opportunity to leverage an inbound phone interaction to generate a sales opportunity. As depicted in the diagram below, whilst each region had mixed results from a customer experience perspective, neither region scored well in terms of sales effectiveness. An opportunity exists therefore for each bank to capitalize on the customer experience, by transitioning from a positive service interaction into a sales-based dialogue with each customer. Customer Experience Results here were mixed, with EMEA clearly falling well short of both the regional and global benchmarks. A likely reason for this failure on the part of EMEA Retail Banks is variation among individual national market standards, given that the sample comprised 15 countries. In essence, institutions based in the Nordics and UK will generally have customer service requirements at the same level as those found in North America. However, similar Banks in developing parts (such as Southern Europe and South Africa) of EMEA still have some way to go to meet such standards. What is clear is that if these institutions do not change the poor manner in which they treat telephone interactions, a loss of business is nearly certain. These issues are discussed in depth in this chapter. AP&J EMEA Global NA Sales Effectiveness AP&J NA Global EMEA Figure 7 Regional analysis - telephone Customer Experience Figure 7: Regional Analysis - Telephone Identify and profile the customer Retail Banks were surveyed on their ability to proactively capture customer contact details 5. This information is used to identify whether the person the Bank is interacting with is a customer or prospect of the Bank, and for follow-up purposes. Globally, 32% of Retail Banks made a proactive attempt at capturing customer contact details during customer interactions. When examined from a regional perspective, the results are varied. 53% of Retail Banks in North America and AP&J, respectively, failed to capture customer details, while EMEA institutions fell short an astonishing 89% of the time. Historically the competitive dynamics have not been uniform across EMEA, competitive pressure has for example not been as intense in Southern and Eastern Europe, as in the Nordics, the UK or Benelux. As a result some banks and banking regions across EMEA have not invested as much as their North American and AP&J counterparts in multichannel customer management strategies. In fact, according to a recent Datamonitor study, European retail banking CIOs recognized this shortfall and indicated that investing in handling customers over a variety of channels in a coordinated manner was their top priority. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 9
Figure 8 The European banking landscape is fragmented; in many countries, a personal approach is preferred over remote sales or service, whether by email or telephone. The fact that many service centers are not equipped or mandated to sell new services to customers translates into a failure to capture prospective customer data. Contact links listed on websites, may not direct customers to the right agent pool in a distributed, multifunctional contact center environment. Regardless of region, there are significant implications for Retail Banks in their inability to proactively capture customer details during interactions. Most obviously, it limits their ability to follow-up on the customer enquiry and pursue it as a sales lead. Furthermore, it means that the majority of customer interactions are truly anonymous, where the agent has no understanding of whether the caller is an existing customer, their profile, their value to the bank and the status of any previous interactions. This limits their ability to provide a tailored response which addresses the specific needs of that customer. Banks were evaluated on their ability to proactively reference an email that had been sent to them a few days prior to the customer initiating a phone interaction. This test provides a simple indication of the multichannel capabilities of each bank. The global average 6 of Banks able to link interactions across phone and email channels for a single customer was 3%. Across all regions, this number was consistently low. North American Retail Banks were strongest with a success rate of 8%, while EMEA Retail Banks succeeded in 3% of cases. AP&J Banks trailed with approximately 1% actively referencing previous emails. Therefore 97% of global Banks treated the email and phone call from the same person and relating to the same query as two unrelated enquiries. Retail Banks need to improve on cross-channel integration in order for a customer to feel known to the bank no matter what channel of contact they care to use. By failing to do so, customers, particularly those who are reliant on electronic communications, could quickly lose faith in these institutions. Also Banks fail to minimize their operational and administrative cost through duplicating effort across channels. Retail Banks were also evaluated on their ability to understand the customer s personal profile regarding key demographics including age, income, marital status and any products currently held with the Bank. Banks that proactively attempted to understand the customer averaged 13% globally. Retail Banks in North America and EMEA performed similarly as 82% and 85% respectively neglected to query the customer, while those in AP&J fell short in 94% of cases. Whilst this test is impacted by Privacy Regulations relevant in each country, Retail Banks need to make an effort to capture relevant customer details for a number of important reasons. Such details increase their ability to understand their customers key demographics, which enables them to accurately segment the customer and provide differentiated recommendations, pricing, and customer service. Global average 32% Global average 13% North America 47% North America 18% EMEA 11% EMEA 15% AP&J 47% AP&J 6% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% % of banks that proactively captured customer contact details % of banks that attempted to understand the customer s profile Figure 8: Customer Profiling and Identification: Telephone page 10 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
Understand the customer s needs Retail Banks were further evaluated on their attempt to understand the particular product features which a customer was interested in as part of making solution recommendations. On average, 35% of Retail Banks globally made a proactive attempt to do so. Regionally, there was significant variance, with the strongest showing in North America at 54%. Retail Banks in EMEA were notably less responsive, with only 27% querying the customer on the features of interest. This result was similar in AP&J, where 34% of banks called attempted to determine the specific product features of interest. Retail Banks need to continually harvest a detailed record of what particular features their customers are looking for. This information is important in ensuring that the product or solutions being offered to the customer aligns with the customer s specific product needs. Beyond this, such information is key in determining the appropriate cross/up-sell opportunities for each customer. Recommend solutions An important dimension that Retail Banks were examined on was their ability to cross / up-sell related products during the interaction. Globally, the frequency rate was 7%. Results on a regional basis were poor with only 2% of Retail Banks in North America and EMEA attempting to cross / up-sell. Institutions in AP&J were marginally better with a result of 15%. These results should be of concern for Retail Bank executives, in that in nearly one of every 10 interactions with Figure customers, 9 new revenue opportunities were not maximized through effective cross / up-selling. This will have an impact on the bank s ability to grow products-per-customer, and to drive customer loyalty through increased share of the customer s wallet. Global average 35% Global average 7% North America 54% North America 2% EMEA 27% EMEA 2% AP&J 34% AP&J 15% 0% 20% 40% 60% 80% 100% % of banks that proactively attempted to understand the customer s desired product features 0% 20% 40% 60% 80% 100% % of banks that attempted to cross/up-sell during the interaction Figure 9: Product Understanding and Recommendations: Telephone Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 11
Resolve customer questions Retail Banks were evaluated based on their ability to address the customer s queries relating to the specific products they were interested in. The tables below list each of the questions the customer had questions relating to core product features and characteristics. Average North EMEA AP&J America What is the annual interest rate? 75% 73% 61% 93% What fees and charges apply to this card? 80% 80% 66% 96% Is there an interest free period? 64% 67% 40% 93% What should I do if I lose my card? 80% 78% 69% 96% What is the process for redeeming loyalty awards/points? 73% 72% 58% 93% How can I apply for the card? 83% 80% 73% 96% Table 1 : Solution Question Resolution - Credit Cards: Telephone Average North EMEA AP&J America What are the interest rates you are offering? 88% 94% 73% 99% What fees and charges may apply to my deposit? 79% 86% 59% 100% What is the minimum deposit required? 83% 94% 67% 97% What if I want to withdraw my money before maturity? 79% 70% 67% 100% What happens at maturity? 84% 88% 71% 99% How can I set up my deposit account? 86% 92% 74% 96% Table 2 : Solution Question Resolution - Term Deposits: Telephone From a global perspective, Retail Banks ability to provide answers to credit card questions was mixed. Institutions in AP&J showed adeptness at answering routine questions, while those in North America and particularly in EMEA demonstrated a need for improvement. From the standpoint of term deposits, results were also mixed. While AP&J institutions were once again strong in answering customer queries, North American Retail Banks also showed relative strength. However, EMEA institutions posted a failure rate that is concerning. page 12 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
Follow-up the lead or close the sale Globally, 24% of Retail Banks made a proactive offer to send customers marketing material or an application form during the course of the interaction 7. Regionally, this proportion was varied, with institutions in AP&J showing the highest relative score. However, Retail Banks in North America and EMEA failed to proactively offer such sales and marketing collateral in 76% and 89% of interactions, respectively. The fact that such a high proportion of interactions with customers did not result in the customer being asked to be sent an application form or marketing collateral should be of concern to executives. This implies that these institutions are missing the opportunity to not only inform existing and new customers of products they offer, but also the opportunity to apply for relevant services. As such, new revenue generation and customer loyalty development opportunities are missed. When it came to fulfilling the customer s request for application forms or marketing materials, only 20% of Banks globally succeeded 8. There was noted geographic variance, with AP&J Banks fulfilling such customer requests 40% of the time. However, North American and EMEA institutions only fulfilled customer requests 12% and 7% of the time despite the customer specifically requesting this information. Retail Banks should be concerned over their ability to respond to customer needs and fulfill such requests. By failing to provide marketing materials and application forms, Retail Banks leave themselves open to accusations of unresponsiveness with regard to the customer relationship, resulting in potential lost business and long-term dissatisfaction. It also raises questions regarding the bank s ability to route, track and fulfill customer fulfillment requests. Of the 20% of Banks globally that successfully fulfilled the customer s request for marketing material, less than 9% of Banks actually personalized the interaction. This was achieved by sending a personalized letter to the customer with the mail piece, referencing the previous interaction and providing a contact point moving forward. Regardless of region, the results were poor. AP&J performed best, with 20% of Retail Banks sending a personalized letter with materials, while North American Banks succeeded just 6% of the time. EMEA institutions posted the poorest result with only 1% of material being sent out with any personalization. Personalization is a simple method of enhancing the relationship between Retail Banks and clients. However, the overwhelming majority of interactions undertaken show that these institutions are making virtually no effort to solidify either new or existing relationships. These Retail Banks risk losing prospects to other institutions that are willing to go the extra mile to provide an enhanced experience for their customers. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 13
Global average 24% Global average 20% North America 24% North America 12% EMEA 11% EMEA 7% AP&J 38% AP&J 40% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% % of banks that proactively offered to send related marketing collateral % of banks that fulfilled marketing collateral request Global average North America EMEA 1% 9% 6% AP&J 20% 0% 20% 40% 60% 80% 100% % of banks that personalized marketing collateral request Figure 10: Lead Follow-Up: Telephone Banks were then evaluated on their ability to proactively follow-up the initial interaction with the customer as a sales lead, in order to establish if the customer was interested in the product or whether there were any outstanding actions with which they could assist. It is worth noting that globally, only 1% of Retail Banks globally took such action. Regionally, 1% of North American and AP&J interactions resulted in lead follow-ups, while in EMEA the follow-up rate was a surprising 0%. Globally, Retail Banks are missing an opportunity to convert an inbound inquiry into a sale, by not providing effective lead follow-up. Such follow-up is crucial to developing long-term relationships and revenue streams with customers. Banks will benefit by viewing the phone channel as more than merely a service channel but as a sales vehicle. Once the initial call has been completed, the interaction status should not be closed but left open, in order to capture the enquiry as a lead, route it to the appropriate department for follow-up, and by ensuring that timely follow-up is provided. Only 13% of Retail Banks made a proactive attempt to close the sale during the phone interaction by offering to take the customer through their application process over the phone. Interestingly, North American Banks posted the best results, with a frequency rate of 39%. However, Banks in EMEA and AP&J performed significantly poorer, with only 4% and 10% of Banks respectively, proactively offering this to their customers. Closing the sale is clearly one of the most important aspects of any customer interaction, but Retail Banks around the world are missing out on such opportunities. Despite customers taking the initiative to enquire over the phone and email channel, they are forced to complete applications themselves either at branches or via post. This runs the risk of losing the customer to another institution that they may also have enquired of. It also means more work and delay for the prospect, leaving questions surrounding the eagerness of the bank to provide good service. In some cases this may have been due to limitations on each Bank s ability to capture applications through the telephone channel, as opposed to having the customer complete an application form and lodge through the branch or mail channel 9. page 14 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
Global average 13% North America 39% EMEA 4% AP&J 10% 0% 20% 40% 60% 80% 100% % of banks that attempted to close the sale during the telephone interaction Figure 11: Sale Closure: Telephone Ensure a positive customer experience The following matrix indicates the range of measures impacting the overall customer experience. They are based on objective measures such as the timeliness and responsiveness of the interaction. Average North EMEA AP&J America Number of call attempts 1 1 1 2 Number of IVR menu hierarchies 2 1 1 5 Percentage of call time spent in IVR system 9% 12% 8% 9% Percentage of call time spent on Hold 15% 21% 17% 9% Percentage of call time spent speaking to Agent 75% 67% 74% 82% Table 3: Ensuring a Positive Customer Experience: Telephone Around the world, Retail Banks are performing strongly with regard to enhancing the customer experience for telephone-based interactions. This is resulting in prospects spending very little time attempting to get through to the relevant person/department in the retail bank. Upon making contact, there is little in the way of cumbersome IVR menus to navigate. The allocation of call time between IVR, On Hold and Agent suggest that banks are focused on answering the customer s call within an acceptable timeframe. This is in line with the move by Retail Banks to focus on customer service as both a competitive means of differentiation and to drive customer loyalty. However both EMEA and North America may benefit from reducing the length of hold time that customers experience as it is currently relatively high. This can, if left unresolved, significantly impact satisfaction levels and runs the risk of losing customers through their unwillingness to wait for an unreasonable length of time before their call gets answered. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 15
GLOBAL RESULTS EMAIL Due to the one way nature of the email interactions some dimensions could not be evaluated including; identify and profile the customer, understand the customer s needs and recommend solutions. This is discussed further in the Research Methodology section (see Appendix D). Retail Banks were evaluated on their ability to resolve solution questions, follow-up the lead or close the sale and ensure a positive customer experience using email as the primary contact channel. Regional analysis Sales Effectiveness - Across all three regions, Retail Banks missed an opportunity to leverage an inbound email interaction to generate a sales opportunity. As depicted in the diagram below, whilst each region had mixed results from a customer experience perspective, no region scored well in terms of sales effectiveness. An opportunity exists therefore for each Bank to capitalize on the customer experience, by transitioning from a positive service interaction into a sales-based dialogue with each customer. Customer Experience Results here were mixed, with EMEA clearly falling well short of both the regional and global benchmarks. North America certainly performed the strongest from a customer experience perspective. These issues are addressed in-depth throughout this section. AP&J EMEA Global NA Sales Effectiveness AP&J Global NA EMEA Figure 7 Regional analysis - email Customer Experience Figure 12: Regional Analysis - Email page 16 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
Resolve solution questions The following matrix differentiates the effectiveness of Retail Banks in each region to successfully address the customer s product related concerns. These concerns relate to the core product features and characteristics. Average North EMEA AP&J America What is the annual interest rate? 31% 18% 25% 46% What fees and charges apply to this card? 32% 25% 24% 46% Is there an interest free period? 30% 14% 20% 51% What should I do if I lose my card? 32% 16% 25% 51% What is the process for redeeming loyalty awards/points? 26% 16% 21% 39% How can I apply for the card? 41% 53% 25% 54% Table 4: Solution Question Resolution - Credit Cards: Email Average North EMEA AP&J America What are the interest rates you are offering? 38% 28% 27% 59% What fees and charges may apply to my deposit? 36% 17% 31% 55% What is the minimum deposit required? 40% 35% 23% 64% What if I want to withdraw my money before maturity? 38% 37% 20% 61% What happens at maturity? 32% 28% 17% 54% How can I set up my deposit account? 39% 41% 17% 64% Table 5: Solution Question Resolution - Term Deposits: Email In terms of addressing product queries through the email channel, Retail Banks around the world show considerable room for improvement. Banks in AP&J performed well, but fell short of achieving the same high results as through the phone channel. Email results differ from telephone results in some cases substantially. The reasons for this vary between Banks but can be characterized by the following examples: Not specifically addressing each of the six questions posed by the customer in the email enquiry. Providing generic email responses based on scripted email templates that did not specifically address the questions raised. Referring the customer to an alternative service channel (i.e. website, telephone or branch) to locate the answers to their specific questions themselves rather than addressing the customer s concerns in the email response. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 17
Follow-up the lead or close the sale Retail Banks showed little skill in following up leads or closing sales generated by email, with a success rate of only 7%. This was despite having full details of the customer s email address as part of the customer s initial email enquiry. Regionally, results were poor across the board, with the highest frequency rate achieved in EMEA, at 14%. In AP&J and North America, success rates were only 2% and 1%, respectively. These poor success rates show clearly that many Retail Banks are unwilling to treat email as more than a means of basic communication purely to resolve the customer s request for information. Email agents are not identifying service enquiries as potential sales opportunities, nor are they capturing the enquiry as a lead and routing it to the most appropriate department for follow-up. It also shows that regardless of region, Retail Banks do not recognize the email channel as a potential sales vehicle which could be mined to drive incremental revenue. Ensure a positive customer experience The following matrix details the range of interactions impacting the customer experience. These are based primarily on objective measures such as the timeliness and responsiveness of the interaction. Average North EMEA AP&J America Emails successfully sent 94% 97% 94% 91% Email sent to invalid email addresses 3% 3% 4% 1% Banks with no email facility 4% 0% 2% 8% Emails never responded to by the Bank 31% 23% 35% 31% Email responded to within 1 business day 56% 62% 58% 51% Email responded to between 1 and 2 business days 17% 16% 18% 17% Email responded to between 2 and 3 business days 8% 9% 3% 13% Email responded to between 3 and 4 business days 5% 2% 5% 6% Email responded to beyond 4 business days 12% 10% 14% 12% Email responses referring to the use of the phone channel in place of addressing the customer's specific concerns 33% 76% 31% 9% Email responses referring to the use of the web channel in place of addressing the customer's specific concerns 33% 49% 35% 20% Table 6: Ensuring a Positive Customer Experience: Email page 18 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
In general, prospects succeeded in sending emails to Retail Banks, with success rates in all regions exceeding 90%. This is reassuring given that an undeliverable message to an advertised email address not only frustrates a potential customer but does nothing to secure a positive customer experience. Only 4% of Retail Banks surveyed had no email facility, again a reassuring figure, however those 4% would need to consider the opportunities to drive revenue and sales leads that an email channel could present them with. The AP&J proportion of Banks lacking an email facility was notably high at 8% 10, relative to institutions in North America and EMEA, where nearly each bank had email capacity. In terms of responsiveness, Retail Banks in each region responded to over 50% of successfully sent emails within one day. This prompt level of response is certainly a factor in securing a positive customer experience. But, disturbingly, 31% of Retail Banks globally did not answer emails, with the highest proportion in EMEA with a failure rate of 35%. Similar proportions were found in AP&J (31%) and North America (23%). The failure to respond to emails should be of major concern to Bank executives. A refusal to acknowledge queries is certain to lead to an erosion of customer satisfaction. Another startling occurrence is the percentage of Banks in North America and EMEA that referred the customer to the phone channel to answer their queries. Given that this is a more expensive channel to administer this is an unusual move. Again it suggests that Banks are not investing either time or money in the email channel and failing to recognize the benefits that could be gained in terms of achieving a positive customer experience via email which in turn could lead to increased sales. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 19
CONCLUSIONS In today s more competitive market place, Retail Banks cannot passively wait for business to come to them, nor can they afford to treat all customers the same customers expect personalized service, responsiveness and quality guidance to help them understand which products and services would be right for them. In order to compete, Retail Banks must capitalize on all customer interactions irrespective of channel in order to deepen customer relationships, build loyalty, generate sales and ultimately maximize revenue. In spite of this, the research clearly indicates that Banks globally are missing a considerable opportunity to realize substantial revenue benefits because of their inability to effectively manage customer enquiries as potential leads, and to ensure a positive customer experience at all times. Specifically research findings suggest that Retail Banks are: Failing to treat phone and email interactions as potential sales opportunities, rather than a pure service channel thereby losing the opportunity to convert customer enquiries into sales by offering the customer cross-sell recommendations. Not leveraging customer data to drive value-based product recommendations and cross/up-sell offers, nor to enhance the customer experience. Unable to capture, route and track customer requests for product information and collateral, and to systematically manage these as actionable leads requiring prompt follow-up. Inconsistent in their response to customer interactions, thereby negatively impacting the customer experience. With changes in the marketplace leading to increased competition between Banks and higher customer expectations, institutions cannot afford to neglect these shortcomings. To do so means they run the risk of losing potential new business to competitors. To address them however will deliver significant financial benefits to the Bank and its shareholders in the form of: Increased product-to-customer ratio A greater share of customer wallet A greater market share to secure leadership position Revenue maximization Loyalty building and reduced customer attrition Driving customers and prospects to preferred interaction channels and freeing-up branch employees for other work. page 20 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks
Identify and Profile the Customer RECOMMENDATIONS 1 Identify and profile the customer 2 Every interaction, whether sales or service related, should begin with an attempt to identify the customer. This provides the Bank 3 with the context for the interaction, while ensuring that the customer experiences a seamless dialogue that takes into account all of their previous interactions. Each interaction provides an opportunity for 4 the Bank to review and update the customer s information so that it can be leveraged during sales and marketing processes. 5 "The need for enterprises to recognize their customers will become paramount." 11 Customer identification must also include authentication tokens to ensure secure access to customer information and to comply with local country privacy rules. Retail Banks should implement stringent and auditable authentication procedures to ensure the security of their customer information. Tier There 1 are a number of basic details that should be validated and/or captured in order to identify each customer s profile. The following data, as a minimum, should be used to provide the context for each customer interaction: Contact Details Segment Data Tier 2 Interaction History Account History Marketing History The customer s basic contact and authentication details (eg name, telephone number, email address, etc.) Value of the customer to the Bank, and related segment level data, including credit risk/assessment Details of previous interactions that the customer has had with the Bank and their respective status Details of each account held by the customer at the Bank, including transaction details and associated balances Marketing campaigns and offers with which the customer has been targeted, in addition to real-time cross/up-sell recommendations which leverage the customer s profile Tier 3 In situations where prospects are contacting the Bank as a result of a marketing offer or campaign, authentication does not play a primary role. However, it is just as important to capture basic customer identification and profiling information to help determine the suitability of the offer during the interaction. Customer information should be held in a central repository/data-store or should be readily accessible from a single banking application - so that it can be accessed by all employees of the Bank in a timely and secure fashion. Retail Banks that do not have access to a single source of accurate and relevant customer information will not be able to ensure the quality of customer profiling and/or authentication processes. Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks page 21
Identify and Profile the Customer 1 Understand the customer s needs Taking the time and effort to understand the customer s needs and current circumstances, as they relate to specific banking products, yields enormous 4 benefits both to the Bank and to the customer/prospect. "The key to enterprises being able to deal effectively with clients is to know who they are. But that does not just mean knowing the 'who' and 'what' of the relationships, but also the 'why'. It will include understanding what customers want, why they want it, what the key levers are and how to use the information" 12 Customer Benefits Tier 1 Customers perceive that the Bank is taking the time and effort to understand them as an individual. Information previously provided to the Bank is leveraged in the context of future interactions and product recommendations. Product recommendations are aligned with the customer s need creating value in their relationship with the Bank. Performance Metrics Impacted: Customer Satisfaction, Customer Loyalty, Products-per-customer Tier Bank 2 Benefits 2 3 The fit between the customer s needs and the proposed product offer/recommendation can be pre-qualified. Credibility with the customer can be established by providing solutions of value based on an accurate needs assessment. Current and validated information can be maintained for existing customers. Basic information on prospects is captured so that leads can be tracked and executed to meet campaign and customer acquisition objectives. Performance Metrics Impacted: Customer Satisfaction, Customer Loyalty, Products-per-customer, Lead Tier 3 Conversion Rate, Campaign ROI 5 Customer needs should be established by leveraging all of the customer-specific information the Bank already owns within their existing systems. In most circumstances, the Bank will be required to ask further leading and qualification questions (such as risk tolerance, product need, etc.) to augment existing information held. Banks should look to automate the needs discussion through leveraging scripted questionnaires (i.e. smartscripts) which prompt the agent to ask the customer a series of questions based on their product interest. This ensures consistency in the customer needs assessment process, while providing the vehicle for collecting relevant customer data. The ability to gather such customer data and store it in appropriate systems of record provides core customer and prospect data that can be used for future marketing and sales endeavours. Once captured, customer needs information should be accessible to other agents and channels within the Bank so that a continuous and consistent needs based discussion can be entered into with the customer. This necessitates a single system of record, which must be exposed to customer-facing agents through all delivery channels as appropriate. page 22 Customer Experience and Sales Effectiveness within the World s Top 300 Retail Banks