Retail Banking

Retail Banking

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Retail Banking: Zapping customer experience

Do you have a positive experience when engaging with your bank? In 2015 there was a 52% chance that you didn’t - an increase of more than 2% from 2013.

In fact, the global picture for customer experience in retail banking is far from positive. One might find this less than positive picture surprising, especially when set against the huge effort that has been pumped into mobile and online banking services over the same period.

There appears to be a key implication here. Focusing on making interactions ‘easier’ (i.e. through using mobile and online channels) is no guarantee to improving customer satisfaction in the wider experience.

How committed are retail banks to their customers experience? For all that’s said by the core retail banks about their desire to focus on customers, a trawl of press releases and articles from the UK’s largest providers does not reveal all that much. Try and find a senior executive talking about customer experience, satisfaction or engagement and you’ll struggle to pin down anything that feels really significant. Perhaps it’s understandable.

The good ship ‘retail banking’ has recently been navigating  some fairly tricky watersi and most directors might therefore be forgiven for pushing customer satisfaction down their list of ‘things that keep me awake at night’. Even so, maybe they should be more concerned - customers with a positive experience are more than three times as likely to stay with their bank as those who have a negative one.

In short, the status quo feels like a missed opportunity. By not appearing to place customer experience right at the top of their list of priorities are the retail banks missing a great opportunity to attract new customers? It’s a question perhaps best answered by holding up a company making a customer-centric strategy work extremely effectively.

Enter Zappos. Founded in 1999, Zappos is a US- based online retailer of shoes and clothing. Zappos has leveraged the delivery of an exceptional customer experience to build a highly successful business. At the centre of this exceptional experience is human interaction. Instead of removing the human touch from its customer interactions Zappos encourages them. It does this because it believes “person to person interactions are still the most effective methods of interaction …. It leaves customers feeling heard and ultimately WOWed”.

It is this WOW factor that has generated the ‘word of mouth’ publicity responsible for bringing in new customers and retaining old ones. Sitting behind this WOW philosophy are a number of radical initiatives and methodologies. The strategy must be working.

In 2009, just 10 years after it was founded, Zappos was acquired by Amazon in an all-stock deal worth around $1.2 billion.

So what are the pillars of the WOW philosophy, and how do they relate to retail banking?
  1. The customer is first, everything else comes second – As it’s an online retailer almost all customer interactions occur through the company’s call centre. Customer contact via the phone is encouraged and made as easy as possible through prominent displaying of contact details on the company’s website. Furthermore, Zappos disregards cost focused performance metrics that they feel could undermine customer experience during these person-to-person interactions, e.g. call volume and duration targets. By way of illustration, after a night on the town Tony Hsieh, the company’s founder, bet a Skechers rep that he could call his company’s customer service division  and not only would someone answer at 2am but they would give him a list of the nearest late-night pizza restaurants. It was a bet that he won.
  2. Ensure the whole company buys into the vision - Zappos offers every trainee completing its joiner programmes  $4,000 to quit. The idea is that this incentivises anyone not truly brought into the customer-first culture to jump at this early stage. Then, to ensure all levels of management and staff are fully tuned into what the customer wants/needs, every staff member also has to complete a six - week rotation working in the call centre, plus complete an annual ‘refresher’.
  3. Empower frontline staff – Zappos call centre staff are often able to use their intuition and experience when talking to a customer, rather than by following a standardised script or consulting a manager.  Again, this approach has been taken because it is felt this is the best way to interact with customers ‘humanly’. It also has the benefit of raising staff morale, as workers feel like they have licence to deploy their skills and/or experience.
Whilst I am sure that there are critics of the Zappos model, it does at the very least offer something different when set against the backdrop of steadily declining ‘positive’ customer experience in the UK retail banking space. To illustrate this point it might be better to look the issue from the other direction.

Imagine that a well known retail bank other than your own deployed the Zappos model, placing customer experience at the centre of everything it did. Your friends rave about it, the review sites say it’s exceptional, you get to interact with actual people …. Would you really still have no intention of switching?

Think of regulatory uncertainty, large fines levied for product miss-selling, changes to the branch-based operating model, legacy IT issues, public and political scrutiny, etc..

About the author

Rory Shepherd-Barron
Rory Shepherd-Barron
Rory is an Associate Consultant working within the Strategy and Operating Model capability team. His professional interests are centred around competitive advantage in the digital age, finance and government. Outside of work Rory can be found dragging either his skiing or surfing gear around Europe. Prior to joining Capgemini, Rory worked for a Big 4 accountancy firm in their FS Tax Advisory service and then with the United Nations Capital Development Fund on microfinance and Local Economic Development in North Africa.

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