Customer Experience: The New Age of Competitive Advantage
The notion of ‘customer experience’ has long been regarded as an ethereal, intangible concept by many industry segments, including financial services. The historic absence of being able to tie quantitative results from customer experience efforts to business objectives and financial outcomes has certainly been a contributing factor.
That line of thought is changing…rapidly. Consider the following findings from global thought leaders:
- Harvard Business Review: Customers with positive experiences spend 140% more & cost 33% less to serve.
- Bain & Company: Companies that excel in customer experience grow revenues 4–8% above their market.
- Forrester: Firms with high Customer Experience Index (CXi) scores have more customers who purchase again, don’t switch to competitors, and recommend the company.
The increased amount of digital activity today means consumer behaviours, preferences and attitudes can be tracked, measured and correlated to bottom line results.
And in a world of increasingly demanding, highly informed and technologically empowered consumers (particularly the Millenial generation), a superior and differentiated customer experience – at every touchpoint – will be the key to future success for most (if not all) companies.
Financial institutions and their advisors are in a unique position to capitalize on this dynamic given the prominent role that banking and investing play in every stage of life.
However, this requires a well-structured plan for collecting relevant data, analyzing the data for meaningful insights, and turning the information into action that positively influences the customer’s financial ‘journey’. While it may be easier said than done, the payoff of positive experiences can be significant (as can be the perils of a poor experience). It is therefore time that customer experience be taken seriously and put on every financial institution’s strategic agenda.