Customer Relationship Strategies: Who’s In Charge?

Effective customer relationships mean letting the customer control the interaction.

Instead of pushing products to customers, financial institutions should allow customers to customize products to better suit their needs.

BY STESSA COHEN

A “customer relationship” strategy, by definition, seems to make a lot of sense. Why would a financial services institution not want to pursue stronger relationships with its customers?

The problem is that banks assume that they, not customers, are in charge of the relationship. In order to implement a customer relationship strategy, most institutions segment their customers — into consumers, small businesses, mass affluent, retirees, etc. — and then ask their product managers, delivery channels or lines of business to sell the products that the bank has determined meet the needs of those segments.

Wouldn’t it work better the other way around, with customers able to customize the products and services that they determine best meet their needs?

For too long, banks have attempted to force feed customers their vision of appropriate product/service packages and customer service parameters. The banks that have the courage to put a halt to customer relationship strategies and focus on empowering customers instead may just be the ones consumers can relate to.

Here are some tactics to consider:
STOP ASSUMING YOU KNOW WHAT CUSTOMERS WANT. Since the consumer dictates the rules of engagement, your job is to make it easier for the new or existing customer to find, evaluate and choose the products and services that meet their financial requirements — from your institution or another supplier.

ASPIRE TO MORE INSIGHTFUL BEHAVIORAL ANALYSIS. For example, how do your customers wish to communicate with the bank? By phone? E-mails? And how do those preferences align with bank services and products?

TAKE THE CUSTOMER VIEW OF MONEY. Banks see money as “the end” but consumers see money as a means to an end — to pay household expenses, buy a used car or save money for an emergency fund. Do your channels and channel technology support the ways customers want to use and move money within and outside your bank?

SUPPORT CUSTOMER DESIRES FOR PRODUCT FLEXIBILITY. You can’t force customers to use the branch teller or ATM or Web site or mobile phone. But you can make sure customers have the tools to create their own personalized product set. Tools such as a pricing and product configuration engine must be available in all channels, from branch to Web site to contact center.

UNDERSTAND CUSTOMER PREFERENCES AND BEHAVIORS THROUGH MULTI-CHANNEL INTEGRATION AND BUSINESS INTELLIGENCE. For example, the bank can provide a centralized customer-managed profile that contains the customer’s preferences for where and how they want to receive alerts, statements, new loan information or other offers. Then the bank must deliver on these promises and have governance in place so that all bank communications and activities (such as a loan sale campaign) obey the customer’s stated preferences.

IMPROVE YOUR CREDIBILITY BY SOLVING PROBLEMS ON TIME, EVERY TIME AND AT EVERY CHANNEL AND THEN REWARD STAFF ON THAT BASIS. Choose technology to improve problem reporting from the customer, from any channel within the bank, and then keep customers informed of the status of that problem resolution.