Increase Revenue with Increased Experience

A recent Forrester Research report looked at 13 different industries and came to the conclusion that as a customer's experience (CxPi) with your company increases, so does revenue, specifically in the areas of:

• Incremental purchases from existing customers
• Retention
• New sales from word-of-mouth

OK, not really rocket science, but it shows that there is ROI in employee engagement.

According to Forrester, the banking industry was more effected by positive customer experience than all others in the area of retention. In banking, an increase in positive customer experience yields a higher rate of change in attrition than all other industries. In a time when customers are changing institutions at a significantly higher level - this becomes an important finding.

Want to put some hard numbers to customer experience? According to Forrester's report, the banking industry can expect a total annual impact averaging $21.20 per customer by improving your customer experience - with more than half of the impact coming from reduced attrition.

So, increased customer experience equals increased revenue - you can't argue with the logic. But we have some work to do. Credit unions ranked in the Top 10 of Forrester's 2010 Customers Experience Rankings with only 3 banks in the top 50. How do we improve?

• Create written Customer Service Standards for the entire company to follow.
• Relook at your sales process - do you speak "to" the customer or "at" them. Create a process that facilitates a CONVERSATION with the customer - then addresses their needs.
• Relook at your sales materials. Are they benefit oriented.
• Follow-up is key. Call it on-boarding, re-boarding or just doing your job. But the best experience a customer has with you can be out of your branch and in their home. Set standards and create a process to add value-based communication with your customers.
• Consistent training. Customer engagement is a culture, not a program. It starts with a new hire and continues every-day. Your staff must be engaged and understand that we are dealing with people's money. And when it comes to money, a little empathy, understanding and advise can go a long way!
• Talk to them. Before you make changes to your organization, talk to your customers and determine their needs.
• Let them have it their way. Whenever possible, let the customer create their own product. More and more institutions are turning to a build-your-own checking product. If not that, then package your products in a way that looks tailored to them.
• Measure your success. Start with baselines in: Attrition, services per household and average balances. Then track your progress regularly.

A positive customer experience can differentiate you in a competitive market place and generate incremental revenue. It can grow your institution organically and reduce attrition.

Want to chat about your customer experience culture? Call us.

Take care,

Eric

egagliano@MarketMatch.com

866-501-2233, ext. 106

4 Things to do AFTER August 15th

Despite your best efforts, your customers and members will likely learn about the Reg. E changes while shopping on August 16th.

You've sent them letters, called them at home, talked to them at the teller line and delivered emails ... but don't assume that your customers are ready for the Reg. E changes on August 15th.

In a recent survey by the Federal Reserve, only 3 of 9 participants understood the changes after reading an opt-in notice.

So, from a communications standpoint, August 15 is not the finish ... but the starting line. What should you do now?

1. Proactively Communicate with Declined Customers ASAP

The faster you can recognize and act on a declined debit card, the better. If you can call ... call. If you can send an email, that's fine too. If you have to, send a letter. The goal is to communicate with the customer BEFORE they call you to complain.

It's important for your staff to assume that EVERY declined debit card is a surprise to the customer and that it hit them at the most inopportune time and when they had no cash on hand.

• Be empathetic but not apologetic
• Assure them that this new federal regulation has impacted ALL financial institutions
• Let them know that you made several attempts to educate them and that you ultimately acted on their wishes
• Provide them with an easy way to opt-in now to avoid future declined cards at point of sale or at the ATM

2. Prepare Your Front Line and Call Center

• Again, make sure your staff is empathetic and assumes the worst case scenario for the customer
• Make sure that the team understands the Reg. E basics
• Arm them with a list and/or samples of all of the Reg. E communications that customers have been sent over the last few months
• Provide them the tools to help your customers opt-in immediately to avoid future issues

3. Add Opt-in to Your On-boarding Program

It's never too late for a customer or member to opt-in. Make sure that you're communicating, with real-world examples, what can happen if you opt-in (fee for convenience) vs opt-out (possible decline at transaction).

4. Communicate Reg. E Changes to Merchants & SEGs

This regulation will impact local merchants as customers will be declined more at the point of transaction. Use this as an opportunity to build relationships with existing and prospective local merchants by providing free education on the regulation.

Take care,

Eric

937-426-9848

egagliano@MarketMatch.com

Business Lessons Learned From the Triathlon

As I write this, I am 72 hours from competing in my first triathlon: 1,000 meter open water swim, 15 mile mountain bike and 5 mile trail run.

I consider myself a trail runner.  In fact, until a few months ago, I couldn’t swim more than 25 yards without being winded and I could count on my fingers the number of bike miles I had ridden in years.

But I was a good runner!   Not great, by any means - I hadn’t won a race since high school – but I regularly placed in my “past his prime” age group for my monthly trail series.

Now, I can swim over a mile without drowning and comfortable bike well enough to compete … but my running miles have significantly dropped off and I haven’t placed better than 4^th in my age group all year. 

The lesson: FOCUS!

Professionally, we are being asked to do much more with much less.  The choice we need to make is: Do we want to be outstanding in one area, or serviceable in many.

The answer my be different for each of us, but ask yourself what is best for you and what is best for your institution. 

Yes, there are those gifted few who either have the DNA or unlimited time to train for all three events and who can excel in all of them.  But the fact is that there are few world-class swimmers, bikers or runners who are also elite triathletes.  You don’t see Lance Armstrong, for instance, competing in the Ironman.

Those of us with limited resources are typically best served to stay focused and excel in one area.

My suggestion?  Focus on your existing customers.  They cost the least to sell to and there is likely a world of opportunity with those customers who have already walked into your doors to begin a relationship.

You can be good at acquiring new customers and furthering your brand, but if you excel in on-boarding and customer share-of-wallet, you'll make the largest splash for the bank or credit union with the budget you have.

As for me … I’ll try to survive the swim and not loose too much ground on the bike, so I can dominate on the run.

Take care,

Eric

Online Account Opening

Thanks Al Gore ... this internet thing might just work out after all.

BAI Bank Strategies estimates that by 2015, 50% of new accounts will be opened online -- is your institution ready?

Consumers are getting more and more comfortable picking and clicking:

• Gen Y is the most likely demographic to look to online resources
• More than 60% of online shoppers are women
• People with children are more likely to conduct business online than those without
• People conducting online transactions are looking for immediate results

In short, they are your key target and they are motivated!

Reevaluate your website - With this target, your reputation and your website may have a greater impact than your physical branches or staff. Create a web advisory council or hire a third party to evaluate your site's look and flow.

Make it easy to open the account(s) - This takes teamwork from compliance, IT and marketing. The more a consumer can complete online (without having to print and mail applications) the more likely they are to complete the process. With government regs in mind, make every effort to allow customers who want to open an account online to actually open the account ONLINE.

Make it secure - It goes without saying...

Add value - These consumers are typically online savvy, however, a little extra education can't hurt. As they are trusting you with their money, help these customers protect it with regular tips on how to keep their online identity secure.

On-Board - Opening an account online is a convenience ... not an excuse to never have direct human contact with your staff. It may be more important than usual to implement a formal on-boarding process with online account openers. Assign a Services Representative to:

• Write a hand written thank you note the day the account is opened. This can follow an email notification that should be automatically, electronically delivered to the customer immediately after the account is opened.
• Place a follow-up phone call a week or two after account opening to assure the delivery of their debit card, checks, or any other relevant materials. Also inquire about the satisfaction of the account opening process.
• Place another personal phone call after the customer's first statement delivers to assure satisfaction. Invite the customer into the branch or schedule a call to discuss further financial needs.

This will be a vital target for us as our industry and consumer needs evolve. Those institutions who are early adopters will have a leg up.

If you're having success in this area today, or if you have questions for those who are, please post a comment in this blog.

Take care,

Eric