When you read a definition of Customer Experience you invariably will see two elements -- the lifetime experience of the customer, and the total experience of the customer day to day as he engages in transactions with the provider of the goods or services he is utilizing. In meeting continuously with UK banks over the last two weeks, I find an almost unhealthy obsession with branch experience as the be all and end all of the customer experience challenge. It is as if a poor customer experience across any other channel can be solved simply by a customer walking into a branch having a great service experience. I just don't buy that.
Last week when I was interviewed on CNBC the issue of Lord Levene's "Project NewBank" arose, where his stated goal is to primarily recreate the branch philosophy of the 1960s and 70s where a customer walking into a branch is recognized by the local manager, and given personalize 'back-to-basics' service.
"Hopefully we can give them all a proposition this time that is fairly straightforward, where when they go into their local branch they know who they are; if they don't want to go into their local branch they can go on the internet; if they want to phone up they can speak to someone they know - hopefully not a different person every time they call..." -- Lord Levene, Chairman Lloyds of London
Hang on...what is different about this to my bank today? Someone knows me in the branch, or I can get to the same person every time I call?
There seems to be a perception today in the UK that all that is needed to fix the poor perception of banks is to offer better service through the branch and telephone. But there are a bunch of other issues.
Convenience and expedience are core drivers
The problem is people aren't visiting branches as much as they used to because when you look at their core drivers in getting stuff done, namely expedience and convenience, the branch simply is no longer the best choice. In fact, if we offered decent customer experience through web, mobile and call centre, I believe it's likely that branches would be under even more pressure today. That's because as a customer, when I think about banking, I am task oriented -- I'm thinking of the quickest, most expedient way I can get something done. I'm not thinking I'll go down to a 'branch' because someone will know my name, my dog's name or that they are open at 9pm in the evening. The question always is -- how do I get this done the fastest most efficient way.
But isn't it about a rich face-to-face interaction?
That's all well and good but let's look at the reality.
I'm a "Preferred" customer of three different banks, in three different geographies. I have a relationship manager with each of these banks, either as an SME customer, or as a High-Net Worth individual with a core AuM that makes me theoretically of value to the bank as an ongoing relationship. So do I get a better experience face-to-face? Does my preferred status make my banking experience better?
With at least two of the three major banking relationships I have, my relationship manager has changed at least twice in the last 12 months. For one of these banks I've had only two contacts from them in the four years that I've had a relationship as a 'preferred' customer -- the first when I joined and the second when my balance slipped below the minimum level and they sent me a warning letter to ask me to top-up my account!
See the reality is this -- as a relationship manager for HNWIs in the Mass Affluent or SME space, I probably have somewhere between 200-400 clients assigned to me on average. That means I don't have time to give my customers advice, let alone invest time in a relationship where I give them good advice. Clients are simply a possible source of monthly sales revenue -- which keeps me employed. Keep in mind this is a dedicated 'relationship manager' which is what the banks tell me is a source of differentiation in the customer experience.
Then if we talk about face-to-face interactions for the average customer with a teller at a branch -- is this really a positive and pleasant experience? The reality is that today most customers are probably just as informed as tellers about the sort of product they are interested in because they already researched it quite heavily before they've walked into a branch. It would be hit and miss as to whether a teller or RM would actually be able to give you 'advice' or support that would differentiate the experience at the frontline in my humble opinion.
It's the total customer
To that end, I see banks working to put in place direct channel teams, and I see more of a focus on 'customer experience'. But what I don't see, is a way for banks to innovate the customer experience across the bank. P&L support for mobile, social media, internet and other such elements of the customer experience is still woefully inadequate because their real-estate based big brother still takes the absolute lions share of $$$. So what's wrong is that the P&L has not yet caught up with the customer. That's not a measure of willingness to support innovation, that's a reality of entrenched structures within the bank that don't want to lose the piece of the pie that they already have.
Ask a head of branches how he feels about losing 20% of his annual budget to support 'direct' channels and you'll find out very quickly what I mean...