Engaging Customers in FSI - Do Digital Channels hold the key

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  • In 2008 SAP and the EIU were involved in a series of workshops across Latin & North America and in EMEA to produce a study which really captured the key concerns and aspirations of those Financial Institutions who participated. The key output being that Reputation, Brand Value, and overall Customer Satisfaction would be the cornerstones of those business who emerge strongly from such a crisis.
  • Key Message: A customer-centric business strategy is at the heart of achieving higher levels of customer service, customer retention, and the resulting revenue growth in today’s market.Banking executives appear to recognize this, but the time has come to move from concept to execution.Per the EIU report of 2008 (Economist Intelligence Unit 2008 Financial Services strategies for growth – Focus on the Customer amidst market turmoil), a reputation for superior (customer) service will result in more prosperous institutions valued more highly by customers, depositors, investors and credit agencies. Identifying customer wants and developing products and services to meet them will expand market share and brand recognition at the expense of rivals hurt by market turmoil. These organisations will garner a larger share of wallet by cross-selling to each customer and through value-based pricing. The result: growing revenue and profit, higher share prices and better credit ratings, yielding the ability to attract deposits and premiums despite the funding crunch.
  • More from the article:Presenting a consistent face to the consumerThe banks and insurers surveyed feel that they need to work more effectively with customers, providinga consistent customer service approach in person, on the phone, on websites and any other means.Financial services firms are more than twice as likely to cite customer service as a core strength thanoperational excellence or product innovation. Nevertheless, they acknowledge room for improvement tokeep nervous customers on board and build long-term relationships.The need for personal contactThe role of personal contact and relationships has never been more crucial. Consumers haveunprecedented levels of choice and access to information. They have come to expect more transparencythan ever, with real-time data and financial advice available from free or low-cost websites. Strongerconsumer protection laws and the rise of consumer-oriented websites suggest that prices and sales termswill become more transparent as well.Survey respondents acknowledge this reality when 52% say that customers see their products moreas commodities than five years ago. Although most say that price is not the most important factor thatcustomers consider, they admit that price is becoming more important. Even commodity sellers have somepricing flexibility; competitive prices are the price of admission, but the ability to compete on service,convenience and other non-price factors allows some wiggle room.Increasing customer satisfactionMost respondents say higher customer satisfaction is a top-priority objective, second only to improvingefficiency. Higher satisfaction leads to more opportunities to cross-sell and upsell, two areas most in needof improvement. Another way to ensure more satisfied customers is to target the right ones—those whorespond to the firm’s value proposition—at the start. Approaching the right customers allows the firm toclose more sales and do a better job holding onto the customers once they have purchased.
  • Now, I am sure that everyone will agree. Advocacy is the true measure of Loyalty, where a customer will actively recommend your product or more likely service to friends, family, and colleagues. It is much more than incentivising one-off transactions based on a financial incentive, it’s about being consistent to the customer across all touchpoints.Forrester defines “customer advocacy” as — the perception on the part of customers that a firmdoes what’s best for them, not just what’s best for the firm’s own bottom lineThough banks have started to make progress in improving customer advocacy, they still near the bottom of the pack in the Financial Services community.Our research shows that a key driver of deeper customer relationships among financial services consumers is a trait we call “customer advocacy” — the perception on the part of customers that a firm does what’s best for them, not just what’s best for the firm’s own bottom line. When customers feel that a financial services firm acts in their best interest, they are willing to invest more, borrow more, and buy more products from the firm.Seven years ago, Forrester set out to find the corporate trait that does the most to create loyalty amongfinancial services customers. Loyalty, of course, is about more than simply retaining customers: Loyalcustomers are willing to buy more, borrow more, save more, and invest more with the financial firmsthey already use. We tested dozens of variables, including the length of the customer’s relationship withthe firm, the quality of the firm’s customer service, and the firm’s use of technology. One trait emergedabove all others: customer advocacy, which is the perception on the part of consumers that the firm doeswhat’s best for its customers, not just the firm’s own bottom line.
  • So despite the words and the well intentioned programmes what has changed…well, fundamentally the customer has changed.
  • What’s changed??? CUSTOMERS!!!We are dealing with a “New Kind of Customer” (socially networked, well informed and empowered through ability to interact directly with other customers)This is a transformational trend that is dramatically changing the way organizations need to approach customer relationships There is a need to look beyond traditional vendor-determined relationship management to a community-driven engagement management – both before someone becomes your customer and afterwards tooThis is both an opportunity and a threat for companies. Ability to rapidly transform will be key to success.So as we can see, the customer has changed, but its not just the CUSTOMER that has changed, the landscape has changed…
  • In the good old days of Customer Engagement, people were generally open and interested in hearing Brand-relatedadvertisements and messages. Partly because the mediums were new and different, and the messages that were being communicated were informative and entertaining, and it helped to bring people together.
  • Don’t just transact but think customer engagementAnd today, unless the messages are personalized and relevant to what they are interested in, most people just tune it out and don’t listen. In fact they actively look for ways to reduce or eliminate these ‘noise’ through legislation and or other tools like spam filters, caller id screening, etc.The way to reach today’s audience is to engage them and provide relevant and valuable information that they are looking for. Information that’s educational and can help connect to other source of experience and information. Increasingly the relevance of your interactions are driven by the customer’s location and their need for convenience. Customers are connected anytime/anywhere to email, friends, favourite brands, etc... For instance, they are willing to give Brands real-estate on their mobile devices via apps, but only if these apps add value and don’t spam them with irrelevant offers.So, not only is your multi-channel capability absolutely essential – but so is your ability to serve the ‘always connected’, ‘multi-device’ consumer and ensure that when your message reached them it is contextual to their needs.
  • I want to start with Social. Human beings are essentially social creatures and the adoption of social platforms such as Facebook/Twitter/LinkedIn have enabled – indeed proven – that we have a great capacity and desire to make meaningful connections with each other. We now live in a connected world where people can collaborate and unite across geographical boundaries, cultures, and religions.I had the pleasure of listening recently to Barry Libert of OpenMatters, a renowned thought-leader in the social sphere, and he described the rise of social networking as being almost akin to them eating the world. The stats certainly bear some reflection when you consider that point. It took China and India several thousand years, before census records began, to reach their respective populations of 1.3 and 1.1Bn people today. It has taken Christianity over 2000 years to gain a membership of some 1Bn people globally. Yet in the space of a few short years we’ve seen Facebook grow to a membership of 900m+ and Twitter recently surpass the population of the United States in member numbers. And what’s more, they continue to grow, to consume, to ‘eat the world’.
  • What has mobile allowed us to from a connected perspective?We are now connected anytime/anywhere to our email, our friends, our favourite brands…our media…our business information. It has altered the basic human consumption model to the extent that social and mobile networks are consuming the world.Gone are the days when you needed to queue to use the phone or visit no.47 to watch television“There are now more wireless devices being used in the United States than there are people. According to CITA there are 327M . According to Gartner by 2013 mobile phones will overtake PCs globally as the most common Web Access device, becoming THE primary device by 2015. Against this backdrop where does CRM fit? Is it still relevant?
  • The Digital Customer has redefined the way people use the Internet. It is no longer a place simply to look up textual information. It is a place to meet friends, to watch video, to play games. IT IS A PLACE FOR INTERACTIONS. The Internet is now such a key part of peoples lives, as is the ability to reach someone on the phone wherever they are, that if people can’t access the Internet / phone then they feel cut off, isolated, unable to go about their daily lives.The rise of the mobile device (phone/tablet) as an Internet connected device has played a key part in this evolution, and this is changing peoples expectation of what the internet and e-Commerce is. In the average persons consciousness a mobile device, be it a smartphone or a tablet, is not seen as complex technology requiring knowledge of operating systems / computers to use. The user experience is not (usually) frustrating. Such devices are inherently consumer devices and the Internet a source of information, entertainment and friendship.From a purely eCommerce/Digital channels perspective it once again asserts this need to have a truly omnichannel strategy for customer engagement. A recent report by marketing giant Ogilvy (http://www.ogilvy.co.uk/blog/thought-pieces/the-new-mobile-shopper-from-armed-to-charmed-ogilvy-research-suggests-big-opportunity-for-mobile-crm-programmes-to-win-consumer-trust/) cites the following:85% of Innovators (Advanced Mobile device Users) searched Google from a phone while in a store to get information on a product. Already 24% of the Early Majority are doing this, with the number increasing to 40% of the Early Majority who own Smart Phones67% of Innovators scanned a barcode or QR code with a mobile phone while 13% of the Early Majority are already doing this, increasing to 18% of the Early Majority who own Smart Phones90% of Innovators looked at a product in-store and then ordered it online while 64% of innovators looked at a product in-store and then ordered it from a phone while still in the retail environment.Already this demonstrates an advanced usage of the technology (already available) to enable such user interaction further emphasizing the need for a holistic strategy to manage the experience across ALL customer channels.TALKING POINTS: Talk about the massive revolution currently underway  PCs  tablets Hard disks  SD cards Servers  CloudFacebook as Internet Passport / Identity / SSO And how mobiles are replacing / obseleting many familiar technologies (diary, pen and paper, watch, maps, compass, sat nav, portable games machine, portable DVD, camera, mp3 player...)Mobile phone / tablet has / is replacing many familiar technologies (due to malleable nature of the technology): Map / compass / sat nav MP3 / iPod Pen and paper / note book Handheld games console Camera / video camcorder / Dictaphone Diary / calendar Address book Torch Portable DVD Player Newspaper eBook Reader etc.Technology is changing human physiology:Can ask people which finger they would use to push a door bell.Younger generation hold up their thumbs, as technology such as Xbox, texting etc. has changed the dominant finger in humans.“Touch” is the new “click” Technology drives consumer behaviour and visa versa.
  • But if that isn’t enough….. They are starting to be aware of thisSo let’s take a global bank and look at some fairly well established figures (albeit smoothed out for losses or extraordinary items but in general a reasonable assumption)We see a revenue of around 200k per employee and income to the bank of around $40k…So lets look at some competitors….. We are going to look at technology companies as that’s what banks are seen as these days….So first let’s take Google….Ah I hear you say…. Banks have costly branches…. Well ……………… says they will need to recue by 50-90% ……But branches can be trendy and value adding…. so lets take Apple…. Branch analogy looks good! Great branches, great products etc etc and actually Jim Hagermann Schnabe likes HANA to these 2 Google fast and Apple smart….But for those of you who still take some convincing let’s look at another bank, albeit a different one…. Mention revenues These look like bank of the future to me….. This could be banks operating as a cottage industry against the industrial revolutionIt’s not us that needs to try and convince the banks…. The strong will survive with massive change and reinvention…. The weak or the indecisive will eventually be eaten or failSo what is the impact of that…….
  • The reason I chose Lego as a great example here was not just because Lego used Loyalty to completely re-invent their business model (as they demonstrated at Sapphire 2 weeks ago) but because they fundamentally understood both their ‘customer’ and their ‘buyers’. Most Lego customers fall into the 5-12 age bracket but the people ‘buying’ were parents and grandparents. What Lego set out to do was find a way to bring this ‘audience’ together and reward them for their Loyalty.LEGO runs SAP CRM Loyalty Management solution and in all of their POS stores and on their website and call center. Any customer interactions made through any channel is made available in a central system, so that customer who make a purchase online and receive awards points can redeem them simultaneously through the call center or POS.LEGO has developed a segment pyramid. To of the pyramid are the “Lead Users” (most engaged customers who even co-create products), “one-to-one” (maintains on-going dialog), “connective community” (online collaborative community, where they share and work with staff), “household” who purchased LEGO products at some time. LEGO runs different loyalty programs with different incentives for these audience members, all with the goal of moving their customers up the pyramid.LEGO currently has over 4 million active loyalty members and the numbers are growing. And their loyalty programs helped them to achieve 37% increase in revenue in 2010 despite global recession.
  • 170 Branches, 5000 staff, 700K Customers – embarked on a major business transformation project with customer loyalty and growth at the core.One of our customers ATB Financial based in Canada transformed their Core Banking and Front-Office applications with SAP to deliver greater agility to both the business and its customers and to extend their reach as a National Banking group across Canada. They used a blended approach involving Social Media and 1-1 communications to reach out to their customers to personalise their experience and guide them through the innovative changes – they alsohad the foresight and ability to acknowledge, adapt, and resolve when things went wrong.They maintained a consistency and transparency in their operations from top to bottom (within their organisation) and across channels to delight their customers and earn their loyalty and trust.Just out of interest does anyone know how many social media initiatives across Twitter/Facebook/YoutTube there are where there are verified banking Avatars and User Accounts? 2,400. How many are actively engaging customers in a conversations? Less than half a percentage point. Check out visiblebanking.com
  • To recap, you have just seen capabilities to listen and prioritize based on sentiment and keywords, followed by the ability to provide real-time responses after automatic routing and assignment. This was supported by a view into the social profile and social interaction history. Rounded of by embedded analytics to provide insights into trends and the team’s performance.
  • There is a shifting design principle coming in as a result of the ‘consumerisation of IT’. Smart organisations are designing their customer-facing applications with a Mobile First mentality (always keeping the desktop in mind) but thinking how an application or a process will be consumed by the typical end use using the most popular devices available. It represents a massive shift from presenting customers with systems which force them to comply with your own internal processes but in turning the design argument on its head it creates a better sense of engagement for the customer.A good measure of customer engagement, a first step on the route to Loyalty, is the battle for app real estate on the customer’s mobile device – the App also allows you to control the customer experience. There is no option to simply navigate away to an external URL, it can become an immersive experience and if integrated with a Loyalty platform capable of pushing Real-Time (Relevant) Offers to the customer based on integrated customer insight
  • Social Context – Back to know your customer – know your audience – understand your capacity to reachDesigning solutions to meet the needs of the user – That’s the Mobile First connotation.
  • Over 1M+Customer enquiries per year

Transcript

  • 1. Customer Advocacy in Financial ServicesDo Digital Channels hold the key?Jamie Anderson, Global Marketing Director, Web Channel & eCommerce SolutionsSAP AG
  • 2. Reputation recognised as key to restoring customer confidence and trust in FSI back in 2008.“ “Reputation has always been important. Now it is the difference between riches and ruin. At times like these, peoples desire for security, trust and feeling their money will be safe will dominate consumer behavior” Alastair Campbell, Director Project Finance at Standard Chartered Bank Economist Intelligence Unit 2008 Financial Services strategies for growth – Focus on the Customer amidst market turmoil © 2012 SAP AG. All rights reserved. 2
  • 3. “Satisfying customer needs is a key priority”“ Satisfied customers buy more products and services and are willing to pay more for them. If we have the right products, the right tools and the right customer-service experience, we will have a very sticky relationship with our customers. They will value us and come back to us to buy their next product” Jim Smith, Executive VP at Wells Fargo Economist Intelligence Unit 2008 Financial Services strategies for growth – Focus on the Customer amidst market turmoil © 2012 SAP AG. All rights reserved. 3
  • 4. Further industry data analysis confirms executive focus on customer satisfaction“ Financial services firms are more than twice as likely to cite customer service as a core strength than operational excellence or product innovation… …52% say that customers see their products more as commodities than five years ago.” Source: Economist Intelligence Unit: 2009 Beyond Transactions Creating Value Through Partnerships in banking and insurance © 2012 SAP AG. All rights reserved. 4
  • 5. Urgency for action: Banks score at the bottom of Forrester‟s ranking for Customer Advocacy Customer Advocacy The perception on the part of customers that the firm does what‟s best for them, not just what‟s best for the firm‟s own bottom line.“ Loyal customers are willing to buy more, borrow more, invest more, and stay longer with the firms they already use. … Customers who rate their firms high on customer advocacy are most likely to consider those firms for future purchase. But … a majority of customers still don‟t feel that their firms have their best interests at heart. Forrester Research, Inc., Customer Advocacy 2011: How Customers Rate US Banks, Investment Firms, And Insurers, March 2011 © 2012 SAP AG. All rights reserved. 5
  • 6. Edelman‟s 2012 Industry Trust Barometer showsTrust in Financial Services continues to decline© 2012 SAP AG. All rights reserved. 6
  • 7. Today‟s customers are empowered like never before… Transparency Democratization of information Variety of Social networkingtouch points and communities Customer Implications  Shift in negotiation power from Vendors to Customers  Evolution from „Relationship Management‟ to „Total Experience Management‟  New communications and interaction channels to manage on top of traditional ones  Greater needs for adaptability and responsiveness© 2012 SAP AG. All rights reserved. 7
  • 8. The Good Old Days© 2012 SAP AG. All rights reserved. 8
  • 9. Now
  • 10. Social Networks are eating the World 1.3B 1.1B 1.0B 900M+ 330M+ 310MBarry Libert, Open Matters © 2012 SAP AG. All rights reserved. 10
  • 11. Mobile is fuelling the new human consumption model2012: 327M U.S. 2013: mobile phones most 2015: mobile phonesmobile phones consumer web access primary computing devices deviceCITA, Gartner © 2012 SAP AG. All rights reserved. 11
  • 12. Enter the world of the new „Digital‟ Customer MOBILITY RICH CONTENT SOCIAL APPS “Touch” replaces the “Click”© 2012 SAP AG. All rights reserved. 12
  • 13. Market View 20121. Banks need to evolve to where their customers are to get the word out – largest growth areas are mobile, social media, video and interactive ads.2. Delivering the correct product at the optimized price on the preferred channel for each customer should be the goal of all financial institutions3. 2012 will be a year of shifting alliances and competing press releases as various mobile wallet platforms attempt to claim the leadership position© 2012 SAP AG. All rights reserved. 13
  • 14. And If That‟s Not Enough…Executive Board of Banks are starting to be aware of THIS!!! Per Global Bank Google Apple Paypal Employee Revenue $200k $1,500k $2,000k $50,000k Profit $40k $391k $513k $3,500k Source – The Banker – October 2011 X 10 X 13 X 88© 2012 SAP AG. All rights reserved. 14
  • 15. The good news is that technology CAN help“ “71% of CEOs agree that technology will have a significant impact on future business.” IBM CEO Survey 2012© 2012 SAP AG. All rights reserved. 15
  • 16. Four „Fab‟ things to consider when engaging the DigitalCustomer© 2012 SAP AG. All rights reserved. 16
  • 17. #1 Know your Customer / Know your Audience 4M Loyalty Members 37% Revenue© 2012 SAP AG. All rights reserved. 17
  • 18. #2 Be Transparent, Be Engaging, Be Social© 2012 SAP AG. All rights reserved. 18
  • 19. The Average Social Media Strategy for FSIs “Of the 1650+ Banking Twitter Accounts tracked since 2010 > 90% are inactive. Less than 0.05% wear the „verified account‟ badge” Cristophe Langois,CEO, www.visiblebanking.com© 2012 SAP AG. All rights reserved. 19
  • 20. Customer Service is becoming the new Marketing…“A recent study by Boston-based, Cone inc, discovered that 4 out of 5consumers reversed purchase decisions based on negative online reviewsregarding products and services” Blog source: Do you trust Strangers? – B2Community http://www.business2community.com/content-marketing/10-ways-to-achieve-multichannel-commerce- part-6-do-you-trust-strangers-0161670© 2012 SAP AG. All rights reserved. 20
  • 21. …and „Trust‟ is gained through the voice of your customer76% of consumers trust peer recommendations, 49% trust the opinions ofstrangers, whilst 35% will trust what they read on Brand websites” Source: Neilson, Advertising Trends – June 2011© 2012 SAP AG. All rights reserved. 21
  • 22. SAP Social Customer Engagement OnDemandTeam-based social engagement for an excellent customer experience Social media listening Get a prioritized list of important messages Detect sentiment and keywords Understand brand-level trends and buzz Real-time Facebook and Twitter message response Route, assign and escalate messages Organize messages with tagging, flagging, favorites Collaborate among team members Respond rapidly and consistently with integrated Social Knowledgebase Increase efficiency with response templates Complete social profile and history Capture the complete social interaction history View public social profile and message timeline Determine Social influence Manage consumer data Analytics Embedded charts and dashboards for critical information Measure team performance and impact with built-in KPIs Explore messages and people with tag clouds© 2012 SAP AG. All rights reserved. 22
  • 23. #3: Think Mobile First – Contextual & ConvenientSolution Highlights Driving improved customer Comprehensive self-service offerings engagement. Delivering Convenient and personalized alerts & notifications convenient and superior Innovative new transactional capabilities, such as remote check deposit, person-to-person payments, card customer service, one activation/cancellation experience at a timeKey Benefits Greater customer satisfaction through convenient self- service Improved operational efficiency Embedded Loyalty drives retention and greater cross-sell capabilitiesCustomer Examples © 2012 SAP AG. All rights reserved. 23
  • 24. With Mobile Banking, StandardBank of South Africa isconnecting the ‘Unbanked’ forthe first time.Standard Bank of South Africaempowers their employees towork where the Unbanked areand have revolutionized the waytheir employees can providebenefits to their customers.Standard Bank is enabling itsUnbanked consumers toconnect to financial systemsand enable financialindependence. And they do allof this with SAP.
  • 25. #4 Blended Service / Exposing Core Processes to Channel Increased FCR rate from 65% to 90% Raised customer satisfaction index by 20 percentage points© 2012 SAP AG. All rights reserved. 25
  • 26. ABC‟s of delivering Connected Engagement supports Engaging CRM Differentiated Customer Experiences Web ChannelAlways Be Connected Network Service IFAs Understand your Mobile Sales customers‟ devices history, sentiment, prefere nce … and expectations Social Payments monitoring Make every interaction Loyalty count, take the Contracts opportunity to listen Customer and learn Security Employee experts Deliver on your promises, Business Transaction Intelligence live your brand History Collaboration Marketing© 2012 SAP AG. All rights reserved. 26
  • 27. Thank you!© 2012 SAP AG. All rights reserved. 27
  • 28. ContactJamie AndersonGlobal Marketing DirectorCRM Web Channel & eCommerce SolutionsE: j.anderson@sap.comT: +44 7825 833047T: @collsdad