| Serving for
Success
By Steve Klinkerman
As customer service
becomes a top strategic priority, institutions must be
clear about what it takes to deliver on that commitment.
After more than a decade's worth of
disruptive consolidation and cost-cutting, financial services
providers are rededicating themselves to serving customers.
In fact, executives cited service as the top means of
competitive differentiation in a recent global survey
conducted by Cap Gemini Ernst & Young. It's a heartening
development, yet one that carries its own challenges.
A variety of factors must come together
to fulfill this vision in a way that fosters growth in
profitable revenues. There's ample justification for the
effort, however, given the emergence of service as a top
strategic priority. Relationships are the foundation of
customer retention and cross-selling; service is the glue
that holds relationships together.
So where does the journey begin? One
step is putting responsiveness first. Encounters have
predictable elements and spontaneous elements, but no
matter how you slice it, something positive needs to happen
in the moments when customers and providers come together.
Pleasing clients, however, begins with discerning their
expectations. Only then can organizational resources be
deployed effectively.
The customer representative is at the
heart of the service outreach, and that's why senior executives
are spending so much time on the employee equation. It's
a long string of factors that includes hiring, training,
equipping, empowering, motivating, rewarding and measuring
performance. All bets are off, however, if another wave
of traumatizing mergers besets the industry.
Technology also plays a key role in
customer service. At the most elemental level, people
want their financial transactions to be easy and error-free.
One ongoing challenge is channel integration. Clients
want to freely roam among varying touch-points —
such as the branch, the automated teller machine and the
call center — and still have access to all transaction
capabilities and account information. Many institutions
still are struggling to meet this requirement, according
to Cap Gemini Ernst & Young.
Service has a strategic component as
well. Many strategists still have an "all things
to all people" mentality, and are unable to articulate
a vision that aligns unique organizational strengths with
the needs of prime customer segments. Players in this
category are at conspicuous risk of dissipating organizational
energies, but, in fairness, it remains exceedingly difficult
to transform organizations long accustomed to one way
of doing business.
Even the most focused players know that
service can become a profit-wrecking exercise if it's
not managed carefully. That's why solid financial discipline
is needed. The dot-com mania offers a prime example of
how companies of all types rushed ahead without having
clear business cases. The point is not to place blame
— it was a leap we all took together — but to
point out how added functionality sometimes neither sways
the great mass of customers nor enhances profitability.
Ingenuity is a key trait that will be
required of executives in dealing with all of the dimensions
of the service challenge, and this is where the story
becomes intriguing. Through new approaches and the use
of Internet technology, some providers are finding ways
to improve both the value and the efficiency of their
service activities, and the leaders in this arena certainly
stand to gain a competitive advantage.
Beneath the deceptively simple slogan
of service lies a vast undertaking, then, but the strategic
rationale has never been clearer. Instead of a fad, it's
a new era in financial services. It's not serving to get
by; it's serving for success.
Mr. Klinkerman is
editor-in-chief of Banking Strategies.
Copyright © 2003 by Banking
Strategies, published by BAI.
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