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Introduction to Customer Management

• Candidates completing the Customer Management module should understand how a bank's customer-centric model is put into practice
• The importance of customer-centric culture in delivering the operating model must be understood
• Know the key roles in a customer-centric retail bank

Defining Customer Management

• Customer Management involves managing the relationship between an organization, its people, and its customers, aligning with strategy and business model
• This relationship defines the ability to gain, grow, and retain customers by deeply understanding needs, behaviors, and values
• Customer satisfaction is optimized and a relationship of trust and loyalty is established
• Business models vary in their outcomes for an organization
• Banks that wants to have a customer-centric business model must ensure this aim is aligned across itself, its people and its customers
• A bank can't apply customer-centric models to isolated departments and expect the results of a fully integrated customer-centric model

Characteristics of Customer-Centricity

• Product-centric companies design the best product on the market
• Marketing in product-centric companies is done via direct marketing
• Channel-centric models focuses on offering the most channels on the market and marketing via channel banners
• Customer-centric companies are focused on finding solutions to customer problems, achieved using event & life-cycle triggers and a product hierarchy within segments
• Product-centric processes is defined by products
• Channel-centric processes is defined by the capabilities of its channels
• Customer-centric process focuses on a matrix of actions and options based on the customer
• Organizational structure in product-centric companies is Rigid, with friction between teams
• Organizational structure in Channel-centric companies is Rigid, with friction between teams
• Organizational structure in customer-centric companies involves cross-organizational teaming and low friction
• Metrics in product-centric companies focus on profit and market share
• Metrics for channel centric companies focus on cost and channel efficiency
• Metrics for customer-centric companies focus on mutual value measures
• A product or channel-centric strategy requires different business alignment and a 'Product Management' or 'Channel Management' module

Core Capabilities for Customer-Centric Retail Banks

• A customer-centric retail bank will need to have core capabilities to deliver great customer experience, satisfaction, trust, and mutual value
• Customer management capabilities include:
  • Managing the relationship between an organization, its people, and its customers
  • Ability to gain, grow, and keep valuable customers
  • Understanding customer needs, behaviors, and value
  • Ability to engage specific customers or segments
  • Optimizing customer satisfaction and trust

Perspectives on Customer-Centricity

• A 2014 survey of 500 global marketers indicated that customer-centricity was critical for business success but often not implemented effectively
  • 73% said customer-centricity was critical to the success of the business
  • 14% said that customer-centricity was a hallmark of their company
  • Only 11% of respondents believed their customers would agree with that statement
  • Only 10% of senior marketers were highly satisfied with their organizations' ability to listen and respond to customer needs;
  • 18% believed that their back-office technology platforms could deliver on marketing promises
  • 10% were highly confident in using data to create insight and value
  • 20% had a comprehensive view of all touch points in the customer experience
  • 28% were personalizing experiences across online and offline interactions
• Many organizations cannot segment and profile their customers effectively due to technology, systems, and processes limitations

Key Roles in a Customer-Centric Bank

• Proposition managers own customer portfolios and develop propositions that realize customer dreams, solve problems, or help them get jobs done
• Proposition managers Collaborate with colleagues from other departments, including product management, marketing, risk management, compliance, and operations
• One key behavior is being able to empathize to avoid confirmation biases and misinterpretations
• Customer insight managers create customer insight and hypotheses by working with market research and customer analytics teams
• Customer analytics teams create customer segmentation models using behavior and value data to track customer contact

Managing the Bank-Customer Relationship

• A customer-centric strategy must operate differently from a product or sales-oriented culture
• Requires shift throughout organization to deliver mutual value through satisfaction and loyalty
• The culture must be reinforced through training, coaching, and communication with employees and customers
• Banks must shift from inward to outward-looking
• Banks should build customer offers around solving problems, not just generating income

Building a Customer-Centric Structure

• Building a customer-centric culture is challenging and should not be underestimated; many companies have struggled to adopt customer-centricity
• The most common barrier to customer-centricity is not having a customer-centric culture
• Banks must have a 'code of conduct' based on customer research to realign bank-customer relationships Mandates from regulators say that banks must treat their customers fairly and monitor the banks adhere to these rules
• Banks must provide understandable terms and conditions for their products and services, free from complex jargons
• While fairness is important, customers need not be treated equally
• More valuable customers might seek better service if they feel unappreciated
• Research helps uncover unmet needs and problems

Code of Conduct

• Customer-centric banks use their code of conduct to:
  • Empower customer-facing employees
  • Value customers and treat them as individuals
  • Solicit customers' opinions
• It resolves queries, problems, and complaints quickly at the first point of contact
• They must handle the issue and offer on-the-spot solutions when possible
• The delivery Products and services should meet customer expectations, keeping accurate records.
• Providing clarity on the process necessary to complain and how regulators and ombudsman can help
• Complaints are viewed as positive feedback for performance improvements

Creating a Sense of Urgency

• Businesses must respond to how consumers want things done, driven by internet-enabled smartphones
• Banks should aim to meet needs of customers, not of the bank
• Some customer service considerations:
  • Reply immediately, within same day and certainly within 48 hours
  • Advise customers of transactions as they occur
  • Provide access to account information and services
  • Reduce customer effort of re-entering information
  • Open/manage service channels around customer needs
• Banks must understand what causes friction when customers move channels and must rectify through process re-engineering

Acquire, Grow and Retain Customers

• A customer-centric strategy requires a banks to better attract new customers as well improve their mutual satisfaction
• Banks must operate around customers, not products and services
• Six principal activities of retail banks for their customers:
  • Keep their money and data safe
  • Handle payments (incoming and outgoing)
  • Keep track of what they receive and spend
  • Lend money
  • Pay interest on savings
  • Offer other products, such as insurance.
• Customer-centric banks offer a range of customer propositions designed to solve a problem or help get a job done

What Retail banks must know about their customers

• A bank must have a deep knowledge of what make each of their customers tick
• It must have a single view of their bank so the banks can understand the customer's;
  • Demographics
  • Potential needs through their product holdings
  • Current and potential future value to the bank
• Banks must understand customers' needs, life-cycle events, and problems
  • What is unfulfilled
  • What they are expecting to deal with in future
  • Having a time line means the banks can build a picture of when and where they can help accomplish a customer's goals
• Customers should have a mutual beneficial and trustworthy relationship with banks
• A bank needs to construcut accurate predictions of a customers value is important .
• An interaction with a bank can provide valuable information to the bank. In the past this can be shown to provide;
  • Anti-money laundering checks
  • Credit scores
  • How customers transact with the bank

Customer Interaction

• Customer interacts with the bank shows their overall attutues
  • Are they who use salary to pay mortgage?
  • Do they use free services such as overseas travel?
  • Do they browse then never buy?
  • Do they open emails?
  • Do they respond to marketing?
  • What channels do they use over others

Customers and Prospects

• Both customers and prospective customers (prospects) are important to the bank, but to varying degrees
  • Customers already have a product (or products) and have an ongoing relationship with the bank.
  • Prospects do not but if they are in buying process, the bank wil have a relationship with them
• The bank knows more about a customer than a prospect
• Banks need constant stream of prospects for business growth, to replace lost customers

Customer Value

• To determine what course of action for customers and segments, the banks must track customer value
• Some measures of this include:
  • Historic value
  • Current Value
  • Future value
  • Lifetime value

Segmentation

• Segmentation has four methods:
  • Demographics by Age, Income, gender and family makeup
  • Psychographic solely based on attitudes and aspirations as well as psychological criteria.
  • Geographic by region state city or neighborhood.
  • Behavioural by content consumed and interaction frequency.
• The bank determines which segments may not be valuable and decides whether to engage with or close them
• Senior executives must decide whether to engage with the customer's needs by questioning and developing what they need to do to direct what is valuable
• value is then realised with the help of techniques such as market opportunity and sales and customer management

Gathering customer feedback

• Methods used to gather feedback include:
  • Satisfaction surveys - Used to be paper based but now sent online
  • Event-driven surveys - Used to be paper based but now sent online post an interaction with the banks
  • Crowdsourcing through the Internet
  • Online communities
  • Focus groups
  • Customer complaints
• Customer insight is the realisation of peoples drivers can create actionable change

How can a bank operate a strategy to outcompete its rivals.

• To perform such a strategy
  • Must come up with a solution that has not been done.
  • Offer something that is not offered or desired to be offered by its rivals.
  • The banks should be what and how banks can use the data for good and what the employees should focus on.
• Banks should understand their customers by allowing bankers to listen to more than they are to speak, giving understanding to concerns and attitudes.
• Don't use present solutions, create new ones.

From a customer perspective

• From the information and from focus groups can provide managers insights on similar themes in order for a deep understanding of their customers
• The bank must then come up with a solution that's able to solve customers wants while testing them
• All employees whether front or back faced should see this, especially if they don't interact with the customer face to face in an understandable format.

Technology improving customer understanding

• A data repository of customer information and transactions used by data analysts to understand customers that include behaviour and value
• An immature bank will have data warehouses but a mature bank will have a diverse amount of data that allows a bank to be operated in a cloud data center or locally.

How customer data analyst can process information:

• Customer analytic software helps the process by;
  • Identifying target customers
  • Understand the customers' needs
  • Identify how bank products meet customer criteria
• CRM is at the core of building customer experience, in addition of this, the building of trust and loyalty and the creation of sustainable value must be factored as well.

CRM system provides a single view of information for all the banks employees and this includes;

• Profile the details on customers like contact preferences and credit score.
• Future life-cycle events with how the customer plans to use the bank
• In progress cross-sell and up-sell opportunity
• CRM systems are a problem if used for sales management, however, this problems isn't a problem with better adoption practices.

Omnichannel banking

• Allows access to banking and transactional information without limiting a customer to a channel
• Banks need to access to who to allocate resources better and understand which segment of customers to engage with grow or deploy.
• Events are specific individual life-cycle events, such as planning to retire.

Improving Customer Satisfaction Through Personalisation and TimelyOffers

• Campaigns can be done two major ways with a combination that is best
  • Outbound -Traditional physical mail or text messages.
  • Inbound - Online banners when browsing to show the customer
• Customer consideration
  • Is the campaign consistent?
  • What the customer is using.
  • What the product is
  • what channel the customer is on

Contact Management

To manage analyse and report after contact:

• The loop should be closed with every step to provide customers with the best journey while tracking it
• Learning from every interaction will lead to improved customer experience
• Banks have a decline of customer loyalty that is eroded by other banks that may compete for their customer
• Being customer centric leads to defence against other offers and is a good reason to attract prospects to products and services. Customer satisfaction therefore improves trust and loyalty.

Banks Optimise Satisfaction

• This starts with both what the bank understands and what the customer wants
• Banks optimise by removing regular interactions and completing a job, ensuring its seamless and adapting with the new journey option
• Banks undertake a strategy that ensures the customers get the best experience through better interactions, and by taking on board new channels to improve the customer's journey
• Urgency is demanded through Internet E-commerce and it's having affects on how it works

Through interactions, priorities are in need of automation.

• Banks that are customer-centric use the channels, interaction and automation
• One response is the banks will predict the best actions for individuals, which could be as simple a as selling a customer a sale. This can happen thanks to Omnichannel banking

Evolution of Banking

• In the very start, banks and their customers used to interact through branches which all activity happened. A bank was reliant on profits from the products.
• As they branched out into banking, internet, and mobile banking they became multichannel, with specialist managers.
• This process shows a split between the originating banks, as the revenue takes place in other channels Multichannel banking
• A Non systematic approach to interact with customers but more like having multiple highly integrated customer service
• Customers are free to chose whether they end up starting back from scratch or moving with the flow What it does?
• By thinking of how customers journey is, that allows a customer-centric approach.
• Customers can access banks at any given time, which comes from customers now a day expecting banks to be available at any given moment at any place.

Most Banks are operating on outdated and unstandardised ways

• Being customer focused may be difficult or impossible if the banks has a business centred organisational model
• This process shows a split between the originating banks, as the revenue takes place in other channels Multichannel banking
• A Non systematic approach to interact with customers but more like having multiple highly integrated customer service Customers are free to chose whether they end up starting back from scratch or moving with the flow What it does?
• By thinking of how customers journey is, that allows a customer-centric approach.
• Customers can access banks at any given time, which comes from customers now a day expecting banks to be available at any given moment at any place.

Process in many technology components components is:

• the customer the bank cultures needs to move from a product, sales organisational value to a customer value focus.
• By looking at measures and metrics, the banks can deploy strategies so that the overall customer journey is as effective as possible