The CX journey to customer lifetime value

Harvard Business Review defines customer experience (CX) as “the cumulative impact of your customers’ end-to-end journey with you, the multiple touchpoints over time, which create a true competitive advantage to companies that get it right.”

While that is an accepted definition for retail, CX for financial institutions has historically been considered from the post-sale or transactional perspective, i.e., after the account is opened. This practice led to a one-sided, linear customer experience that is less about an institution learning their customers’ needs and more about telling them what they can provide.

Pre-purchase strategies, however, are now the norm. The developing world of CX pushes financial institutions to adopt a broader view of engagement — one that focuses on analyzing every part of the customer journey, beginning with the moment a consumer first encounters the brand.

Legacy financial systems have been built around data processing, but customer expectations have changed. Now they expect their institutions to know enough about them to answer the questions that create happiness and improve their lives: “What do I need now?” and “What will I need in the future?” Financial institutions that can quickly respond to these needs control the profitability of the entire future relationship with their customers.

Technology alone is not the answer

Financial institutions are making their biggest strides in technology investments that deliver a modern customer experience. But there are consequences to treating technology and the digital experience as a check-the-box task.

Customer experience is not a technology problem — it’s a culture problem. Tech is simply one piece of the puzzle for an effective, holistic CX program designed to deliver a complete, omnichannel customer experience. Every area of an organization has a role to play — not just the CX or marketing teams. Delivering a smooth cross-channel brand experience that is compelling and consistent is critical to building trust, confidence, brand and credibility.

A major issue facing institutions is the way digital innovation has changed customer expectations. As consumer IQ quickly rises, so must the financial industry’s ability to adapt to customers’ demand for real-time, one-to-one quality engagement where, when and how they want it.

Consumers engage companies in so many ways. We call them channels, but consumers don’t. Ask any of your customers about their channels, and you’ll probably get a blank stare because they don’t think about channels. They think about the easiest way to get what they want at that moment.

Never underestimate the importance of continuously monitoring, improving and maintaining an accurate and quality online experience. Making it easy for consumers to find their way to your digital or physical front door is a significant touchpoint for delivering on core values and building brand authenticity — a high percentage of new account applications are abandoned before completion. A true customer experience strategy seamlessly connects those digital and physical moments of truth across their journey.

Analytics bring you closer to your customers

Customer information is coming harder and faster than ever before, leading to a data challenge for many institutions. Extracting valuable insights from data can lead to better understanding of customers and help create more relevant experiences. A 2019 study by Forrester Research, however, found that fewer than half of banking providers are effectively using their customer data to this end.

Knowing what to do and where to do it is so powerful for changing and improving culture and service. The ability to analyze data along the entire process and determine how it impacts KPIs is necessary to achieving business objectives. The deep insight afforded by data lets you break down a seemingly limitless customer journey into smaller, bite-size action items.

Try visually mapping out the customer journey and applying metrics to it along the way. This method is highly useful for helping to identify friction points and prioritize where investments and process improvements should take place.

Some financial institutions are making great strides in personalization and understanding where customers are in their journey. It’s more than just understanding the lifecycle; it means knowing where customers are in the lifecycle and engaging them at the right time and in the right place.

Marketers now need to know not only about how the customers are transacting today, but also about what services they might need tomorrow. The ability to suggest appropriate products and services for what customers need right now is personalization in action.

This requires an understanding of both consumer behavior as well as the technology to engage customers — when, where and how it matters — and to drive conversions. Seasonal campaigns are becoming a thing of the past. Now, we’re looking to new technologies and resources to drive one-to-one, personalized, always-on engagement.

CX proves its value over the long haul

CX is unlike everything else you measure. It’s not a short-term or line-item metric — it’s longer. The ultimate goal of CX is to meet the needs and goals of customers, enriching their lives, not only now, but for years to come, resulting in higher customer lifetime value. A 2017 study by McKinsey & Co. concluded that brands that improve CX see an average revenue increase of 10% to 15%.

Try considering the impact of engaging consumers lower in the funnel at the point of sale. The opportunity at that point is to compete on price. But by taking a personalized, always-on engagement strategy, institutions can get customers to stay longer and increase their lifetime value.

I think you’ll find that over time, a holistic, behaviorbased CX strategy is a game-changer in becoming the trusted resource your customers turn to again and again.

Carrie Stapp is the senior vice president of product management for Harland Clarke.

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