Something I’ve always been critical of is the overly simplistic, lazy and fasle measure that is Customer Satisfaction.

Asking customers how satisfied they are on an 11, 7, 5 whatever point scale is a question they just don’t ever consider.

I’m not even sure about NPS anymore either. The mythical BBQ conversation (somehow an Australian-specific market research analogy) of ‘which bank would you talk to people at BBQs about” is stupid – no one speaks about banks at BBQs, people. They talk about their life, their kids, their jobs, their holidays, not banks, insurance companies, utilities. They might talk about experiences, but not the brands or banks themselves. I don’t think so, anyway – its not something we can keep bringing up in meetings anymore.

Let’s rephrase it simple customer centric terms:

• How happy are you with the service you receive from the bank?
• Or perhaps more importantly, are you not unhappy?
• Did the experience you had meet your expectations? Why or why not?
• Did you get done what you needed to get done? Do you need to go in again??
• Are you better off financially being with this bank? Are you making more interest on your savings or saving on your loans and fees?
• Did the bank make you want to do more business with them?

Ask customers to help you create measures around Customer Success not Customer Satisfaction:

• TASK COMPLETION – Did the customer complete the task they started?
• CUSTOMER EXPECTATIONS - Did the customer experience meet expectations?
• WEALTH CREATION - Is the customer creating better financial outcomes for themselves?
• REPEAT BUSINESS – Is this new business or repeat business?

Don’t get caught up in the miniscule percentages, the 0.3% movement in your customer sat. That’s not real, accurate or something you can lean on as real change.

Concentrate on the real customer outcomes – they got done what they needed to, had an ok time doing it, it benefitted them financially either in the short or long term, and if all goes well, they might come back and give you more business.

Let’s face it, in this current environment, you’ll be grateful for that right?

For those that don’t, it stands for Strengths, Weaknesses, Opportunities & Threats, a useful framework to review your business’ future.

As you might, I split SWOT into 2 parts.

The internal view. When reviewing strengths and weaknesses, we do an internal review of the business, and work out what we’re good at, versus what we need to improve.

The external view. When reviewing opportunities and threats, we analyse the opportunities we see in a given market or space, as well as the threats other competitors or factors play that may negatively affect us.

As banks, we’re often looking at ourselves to understand our strengths and weaknesses, as well as other banks to see who takes opportunities and creates threats.

However, I feel that as an industry rather than as organisations, we’re great at understanding our strengths and weaknesses, but very poor at understanding our opportunities and threats.

When was the last time you wondered when Bank A was going to open near you, or Bank B was going to launch the same product as you, or you looked at their new website? Probably pretty recently.

But when was the last time you asked, Apple have so much $ in the bank, and outlets like Apple stores, iPhones, iPads and iTunes, that they could start a bank? Or what the combination of Microsoft, Nokia and Skype might mean?

When was the last time you asked whether your local telco is a potential partner or rival? When was the last time you compared the Amazon customer experience to the one your bank provides? When was the last time you pondered if you could tie up with Nike, BMW or Burberry to create something really special?

When did you get to the bottom of exactly how PayPal works, or how Square works, or how Xero works?

Sure, analyse yourself, even analyse other banks. Understand who is doing what. But don’t just match your competitors.

Put your head up a little higher, and you’ll see a vibrant environment of players, competitors, and markets that need your attention.

• When it comes to social media just make a call and try – it wont kill you unless you let it
• Mobile and internet banking are the absolute no doubt future of real cost effective banking – make that your number 1 priority
• Sort out your internal technology environment – its costing you millions a year in lost productivity
• Hire people on values not skills – this is a more important commodity in future
• Always always involve the customer in anything that ends up frontline, and even back office – at worst you create something that customers want

If you want, number 6 could be ‘Don’t run the bank badly or else you’ll default or close down’

Pretty simple huh?

Photo – Incase, Flickr

These days, power means something different.

We used to live in an age of Power through Authority & Governance. But things are changing before our every eyes. The single, central and hierarchical structures of previous centuries are fast eroding in their control. Dictators are tumbled, governments and corporations are held accountable (to a point that’s possible), people are taking to the streets, and demanding like never before.

Now, we’re entering an age of Power through Relevance & Connection. People’s abilities to access and influence information, insight and each other has been as liberating for some communities as their actual freedom itself. The power of people connecting has creating huge underground and above ground movements that single points of power like a top heavy leadership structure cannot control.

How will your organisation harness this new seat of power?

Photo – Incase, Flickr

What does it take to be really customer focused as a large organisation? How do you ensure that your business is listening to customers, driving your people to think about customers, and create great customer experiences?

Focus on the following 3 core competencies:

1. Create powerful, aligned customer insight – a strong voice of the customer program sounds obvious, but ensuring your measuring the things that matter, that make a difference, and that create internal impact, both culturally and financially, is hard work. Get some great capability in your customer insight team, combining the market research, customer interview and insight, and analytics capabilities.
2. Drive the customer focus internally– through a range of initiatives, align the organisation to a central customer experience vision (aligned to the company’s purpose, values and brand) through co-ordinated internal communication, people policies such as hiring, incentives, equipping, and developing (learning and development; people management)
3. Design products and services using a user-centred design methodology– it might not seem natural to for a bank to employ a bunch of designers, but having 4-5 people in house to work on big and small projects makes a huge impact, creating powerful before-and-after stories that drive change. Plus, the experiences are just better – they look better, they run better, they’re more effective, they succeed quicker and make customers happier. Who doesn’t want that?

These 3 things are the most common things great customer focused companies have in common – and they do it explicitly and wholly. If you can say your CX team or bank has these capabilities in spades, you’ll be ahead in no time.

Photo – Incase, Flickr

Last week, I sat in a Hilton hotel room, probably like you, glued to the stream of news coming from North Africa and the Middle East. The images of people in the street were intertwined with economic data and business headlines. Delicate diplomatic, cross-border and political manoeuvres were dancing hand in hand with the rough, ass grabbing groove of desperate citizens taking control, with love and passion pouring from their hearts, ideas and direction from their minds, hope and urgency from their mouths. As someone sitting in the comfort of a plush king single in multi-national chain, it may for compelling and contemplative viewing (as opposed to understandable and scary reality). I hope you felt the same.

Given what’s happening in the world, on so many dimensions, we all should be putting something forward right now. We should all be making some sort of commentary on what we think is happening, what we need to do, and how we think it might end, or simply segway into the next monumental moment in history. It’s our obligation to add to the debate. You can’t say you don’t have the means – the tools, the outlet, the opportunity – to do so.

What’s coming together here? I don’t want to say the words ‘perfect storm’ (guess I just did) – that implies some sort of catastrophic, uncontrollable act of god, where in reality, its mankind that is making these dramatic movements in history.

1. Consumer Economics
   The Global Financial Crisis may be one of the most critical moments in rebalancing our social structure. The consistent delivery of the financial system over 2+ decades through the 90s and 2000s meant that money was a given, simply something almost atmospheric, leading to complacency, abuse and misaligned priorities. Not just in Wall St traders and hedge fund managers. In us all. Losing our houses, second cars (and second houses), even our job security, perhaps has made us face ourselves in the mirror and question what fills our lives with happiness – objects, products, things; or experiences, interactions, relationships. The definition of money, value, cost, investment, I hope have changed forever. The definition of consumer economics – the system of supply, demand, exchange, value amongst individuals – has hopefully hit reboot.
2. Generational Change in many dimensions
   Poor old Gen Y. At once they are touted as the Generation Of Change, at the same time as being labelled as lazy sloths, sponging their parents for both money and esteem. They are harshly judged, for their time has yet to be realised. In the past, a youth movement made little more than a fly to swat away from the front door of Downing Street or the White House. Now, through genuine coordination, intent and sheer determination, they are shunting governments from their hibernation. It’s taken a Facebook generation (and a Google employee) to create huge change in places where suppression was a lifestyle, not a burden or curse. It’s taken young people to feel responsible for the important things in the world, whilst Gen X and older kick back into their comfort zone. They are to be commended, nurtured, and unleashed.
3. Technological Awesomeness
   Jobs-ian gadgetry bares a double edged sword – at once it bursts through technical complexity and connects us in a human and user centric way to reach information and other people that otherwise might have been left alone; at the same time, we chain ourselves to these devices as if it were a drip feeding stimulant. They are both what will set us apart, educate and elighten us; and will prove that we can often simply ‘plug into the system’, which is often controlled by others.
4. Redefinition of power
   I love Annual Reports. They’re like a current day version of a museum – complex and important information, corporate terminology, and best of all, headshots of important people. They show you who’s in power, at the same time, they make you wonder what they clearly know, and what you clearly don’t or ever will. Wikileaks has been a good reminder that the traditional power structures are but a thumbdrive away from deconstruction, from recalibration, from embarrassing justification. Long may this continue.

This is a blog about banking. About banking customer experience. But the world, in 2011, is changing rapidly, more than in the previous 10 years. Perhaps more than banks can handle.

Banks and organisations like it are the irresistible object; the large, solid thing slowly ploughing through the sand towards the future. The things above, and other trends and movements like it, are the unstoppable force, battering against convention, and demanding a better way.

Will banks understand that they are part of this tension, this change? Will they understand they at once are crucial players, as well as barriers? They are pillars of the economic community, yet have been somewhat responsible for recent turmoil. They are continuing with dependable stoicism, yet won’t put their head up to see the wave coming. They fight with each other for dominance, yet can’t see new models will most likely superseed some of them. They ‘understand customers’ yet do they really?

So now you need to ask yourself…

Are you working inside the irresistable object, or riding the wave of the unstoppable force?

I’ve recently had an interesting industry lunch hosted by FST and HP, and was prompted and poked by Mel, an HPer to get blogging. So Mel, thanks for the prompt. Here goes.

One of her colleagues was telling me how he’s noticed a range in maturity across various banks in Asia at their current appetite and capability when it comes to adopting new technology, business models, customer experiences.

We discussed at length, and I appreciated the HP expertise on this.

There are a couple of conclusions here for me based on this idea of varying maturity.

The definition of terms

Let’s first look at what the opposite of varying maturity looks like. If all participants in an industry are equally mature, they can be all poor, all average or all good (or god forbid even all great!). If all participants display a variety in quality and excellence, then they have varying maturity.

A highly equal maturity industry is one where all participants are equally capable. A low equal maturity model is where there is great variance in the offerings or capabilities of the participants in one industry.

A high performance industry is one where all participants perform at a high level most of the time. A low performance industry is one where all the participants perform at varying or low levels of quality.

Whats a high maturity and high performance industry look like?

There are certain industries that have a generally high performance rate amongst the participants – these industries that demand high performance often come with strong demand in quantity and quality from their customers. The consumer technology market may be one, where the volume and incermental innovation and improvement is at such a rate, that the benchmark is being set by the next guy within days or weeks, not years or decades.

Whats a low maturity and low performance industry look like?

There are certain industries that do not have the raging demand from customers, or need to truly innovate, and can surive amongst their peers by offering an average experience, or even varying wildly from the norm. This leads to varying performance, and sometimes low performance at least in customer experience delivery. But strangely, this often comes with no less performance on the P&L statement. Only in banking, where fees and margins are the main revenue source, can customer experience be so low on the list of creating value.

Of course we know this is fast becoming a thing of the past.

One of the really powerful things about the potentially fatal commodisation of an industry is that it drives crazy areas of differentiation. And in banking we cant differentiate through a cool new feature like a digital camera can (when was the last really interesting product that came from a bank?), or through a new interesting branch layout – this only affects a few people.

Banks need wholesale high maturity and high performance in all parts of their customer service and experience value chains – in non-jargon jibberish, we need to be obsessed with how the customer has to deal with us, and always look to deliver the best, seamless and appropriate experience we can.

‘The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.’

Rupert Murdoch made this comment in February 2008 about the future of the newspaper business.

This view of the future applies to all industries, particularly those with large and small players, with old and new organisations, and with the threat of disintermediation and business model disruption on the immediate horizon.

The newspaper business is currently feeling this pain; travel and real estate are facing irrevocable change within their industries; and banking will be next.

Innovation is one of the ways we can counter or even capitalise on this event horizon.

How customers manage their money

A customer might log on via the internet to: view their account balances; make payments and transfer funds via an iPhone app; pay a friend back for a lunch debt by bumping phones together; or find an ATM on the way to lunch using augmented reality; then video chat to a call centre agent via Skye regarding their financial advice needs; or discuss these needs in person with a retail representative using a collaborative touch screen table; and share this information later with friends that have similar needs.

All of this can be done today using existing online and digital technology. And not one of these tasks needs to be facilitated by a traditional bank brand as we know it. A collection of offerings from brands such as Mint.com, Apple iPhone, Skype, Facebook and PayPal can replicate the banking function, and even the relationship, as we used to know it. This is part of the new future that large financial services organisations must prepare for.

A perfect storm has emerged …

So why is this upon us? And what is happening that is making this change occur at such breadth and pace? A perfect storm has formed on a range of fronts:

• Economic conditions were drastically shunted. In a post-GFC economic environment, business models have been stretched and tested. While Australia’s banks and financial institutions have fared relatively well through the global financial crisis, the Australian market has not been totally unaffected, and pressures on wholesale funding remain an ongoing issue.
• Consumer behaviour changed irrevocably. After 10 to 15 years of economic prosperity, consumers have become far more comfortable with certain kinds of debt instruments and they are now able to make purchase and service decisions much quicker, and with greater knowledge and understanding.
• Technology capability embedded itself in our lives. Information technology is ubiquitous, with people’s lives seemingly busier than ever amidst the promise and presence of technology designed to make life simpler and more efficient.
• Changing business models now compete alongside traditional models. This new access to consumption and technology has created new industries and supply chains that deliver products and services to consumers.
  … with lasting consequences
• Trust and security are now highly valued. Large banks and financial services have some advantages here, but they need to convince customers through actions rather than words.
• Customers have greater access to products/services and more knowledgeable about their options.
• Control of the conversation is now shared between the consumer and the organisation. Consumers can now have conversations with other consumers more easily than with large corporations like banks.
• The preferred channel for certain tasks is becoming clearer, with online and digital channels widely preferred for simpler tasks, and face-to-face or voice-to-voice channels preferred for more complex tasks, such as sales conversations or problem resolution.
• Digital interfaces are evolving from a graphical user interface (GUI) (click a link using a mouse on a PC browser) to a natural user interface (NUI) (touch a button using your finger or hands on a mobile device).
• The proliferation of offerings from hardware and software providers such as Apple, Google, Microsoft and Nokia means we must evolve digital interactions from website development to multiple platform display and support.
• Peer-to-peer lending as provided by brands like Zopa means anyone can provide the financial offering of a bank.
• Disintermediation is a reality unless a strong focus on customer centric servicing and adoption of new technologies is established.

Incremental innovation must be accompanied by seismic shifts

There are essentially three key components of creating an innovation response to the new paradigm:

• establish an innovation culture and process;
• create strategic innovation awareness and change; and
• move fast on the tactical dimensions of online innovation.

Rather than a scatter gun or an ad hoc approach to innovation, an innovation culture needs to be created.

In this environment: people become aware of and open to the idea of lateral thinking; a flow of innovative thinking, ideas and practices is generated; processes are developed to enable this flow of ideas to flourish until they are proven; and a method of measurement will be required to analyse the quality, performance and ultimately the return on investment associated with new ideas.

In his excellent book Innovation and the Future Proof Bank, James Gardner, former head of innovation at Lloyd’s TSB, describes five strategic dimensions of business innovation, each with varying levels of potential disruption:

• new business models (PayPal can be described as a disruptive model, Zopa even more so);
• new channel capabilities (mobile is the predicted boom area);
• new markets (e.g. gen Y and the emerging markets in Asia);
• new experiences (better processes such as a mortgage application process); and
• new product forms or evolutions (the credit card was perhaps the last real product innovation).

These are the dimensions in which innovation can enable your business to make a seismic shift towards the future, or be obliterated by an unforeseen threat.

On a smaller level, for those digital and online channel managers under the channel strategic dimension, there are tactical online innovations that can be made. Current trends in this space include mobile and wireless ideas, security and biometric innovation, user-generated content and social media, the simplification and improvement of the user interface, and the massive area of micro, contactless and other payments innovations.

Regardless of your approach, simply keeping your hand on the rudder and steering forward in a straight line may not give you the edge against competitors. The level of innovation that your business needs to stay ahead of the competition may be something as small as a specific channel idea, or an entire business model change.

But, standing still is not an option.

Sidebar content:

10 insights on digital innovation in financial services

• Digital technology is already here.
• Digital is the ultimate scalable environment.
• Mobile services will boom in all forms.
• The role of physical outlets will not diminish, but will change forever.
• A multi-channel mix is unavoidable.
• Your brand needs to be anywhere, anytime on any device.
• The power is in the cross-integration.
• Good user experience and design are critical differentiators.
• Customers are more in control now than ever – don’t waste that opportunity.
• It’s not just about online and social networks, it’s about digital connections and relationships.

Quick thanks: To Brett King for opening this part of my brain. Buy his book!

1. The Dreamer
You’ll need to think of quite illiogical possibilities, of seemingly odd pairings of ideas, of ideallic future states for the business that will require drastic transformation, yet seem impossible to ignore or aim for. You’ll need to articulate these visions in ways that non-change agents can understand, and sell the future, and the first step towards it.

2. The Strategist
You’ll need to formulate a way to get the right movement forward to align with the objectives of interested parties – like management, shareholders, etc. You’ll need to create both incremental change that adds to a large amount, or introduce ground breaking change that is too compelling to ignore.

3. The Agitator
You’ll need to be prepared to take a different view to those in the room, to put the mirror of the real world up to the face of the business, and show whats really going on. You’ll need to bring some harsh and simple reality to the table, and fight to get this heard. This may not prove popular. But not many change agents are, and rarely survive long.

4. The Networker
You’ll need a strong network across the business to simply survive, let alone thrive. But you’ll also need to use the network to get some of the less formal or traditional initiatives potentially happen. A seemingly random collection of people from across a business, sometimes called a multi-functional team, can achieve odd results when doing things ‘under the radar’

5. The Connector
You’ll be in a rare position that your new network will make you vital in creating connections across the business. When you hear about project A relates to topic Z, and so does project B, you connect the people together and become a key link in reducing double up in the business.

6. The Influencer
You’ll realise that agitation doesn’t always work, but given its your natural instinct to do so, its hard to play the game. Influencing others to make a positive change of direction will become a skill you’ll need to garner funds, resources, approval, etc.

7. The Designer
You’ll need to appreciate the finer craft of delivery, and of customer and user experience, as this will prove the difference in uptake in your ideas. A new idea packaged in a better way than others can manage means a better chance of success – just ask Apple about their iPod.

8. The Journalist
You’ll need the curiosity of the journalist – about every topic, in every field, in any time – as others will throw all manner of logic to rebutt your ideas. You’ll also find that this wide understanding of the world feeds your creative mind, and creates left-field thinking. And just like a journalist you’ll need excellent communication and writing skills!

9. The Project Manager
You’ll need to be very organised to get ideas flowing through, and people in line to assist you. You’ll need to show the business that you can create structure where they thought structure couldn’t exist.

10. The Deliver-er-er
You’ll need to produce the goods, deliver to market, and create customer response. This can take time, often means short term flame and pain, but in the long term must align to a change strategy.

Normally, a project like the large online project we ran usually ends up with the standard ‘design by committee’ outcome, or struggles to avoid it but somehow can’t avoid it. What we’ve managed to do with this project is engage dozens of people, help them understand the change we’re undertaking, and let them leave the briefing feeling like they’re across the process, and even support the decisions we’ve made and give ongoing support.

So we’ve been able to own the process yet share the outcome.

Controlling the way the project is run is different to allowing all to understand and support this control, and even be involved in the decision making process. This has been a unique benefit that you should strive for in your project – it creates an efficient and focussed outcome.