Customer Waypoints & Channel Preferences in and Integrated Digital CX Delivery Model

What started decades ago as a migration away from the branch channel has accelerated during the Covid-19 pandemic – aided by technological advances that were not available just a few years ago.  This confluence of the pandemic and technical advances is culminating in an age where it is possible to deliver a seamless integrated digital first retail banking delivery model.  Such an integrated delivery model is based on the understanding that customers have different needs at different moments in their customer journey.  This delivery model matches channels strategically to these different needs at the correct moment for the customer.

Customer Journey Waypoints

A waypoint is a point of reference when navigating a journey.  Not only do the customer journeys take place across a multiple channels, but they take place across multiple transactions or waypoints as well.  To investigate how customers navigate digital and personal channels, Kinēsis researched customer channel preferences for six different customer journey waypoints: opening an account, problem resolution, seeking advice, getting information, making a deposit, and transferring funds.

Two CX Risks: Exposure & Moments of Truth

Business is often a process of balancing risks.  The customer experience is no different.  Managers of an integrated delivery model should be aware of the two primary risks they face: exposure and moments of truth.  Exposure risk is the sheer frequency of customer encounters in the channel.  Poor experiences in a high exposure channels spread this poor experience across more customers.  Moments of truth are critical experiences with more individual importance of the waypoint.  Poor experiences in a moment of truth interaction lead to negative customer emotions, with similarly negative impacts on customer profitability and word of mouth.

Waypoints and Channel Preferences

The foundation of an integrated digital first CX model is based on matching the best suited channels based on the needs of both the customer and the institution.  Customer channel choice is not uniform.  Rather, customers select channels they deem appropriate based on the waypoint of the customer journey they find themselves.  For customers conducting a transfer or deposit, mobile apps are the most popular channel (preferred by 58% and 53% of the customers, respectively).  Customers seeking information have a broader range of preferred channels, but a plurality (40%) prefers to seek information via the website.  The contact center’s preferred role is problem resolution (51%); while the branch is preferred to both seek advice and open an account.

The following table illustrates these different channel preferences for different waypoints in the journey, as well as overlaying channel use, satisfaction and the moment of truth potential for each waypoint:

Frequency of Customer Preferences by Waypoint

The above table illustrates the current state of the integrated digital first business model.  The digital channels, with the most exposure risk, are the primary customer choice for waypoints which represent low moment of truth risk. 

•     Automated transactions such as transfers and deposits are preferred with an app. 

•     The website serves as both an information center, and to a lesser extent transactional center. 

•     The contact center’s primary role is problem resolution, and as a result carries significant risk in terms of moments of truth. 

•     The branch is where customers come to seek advice as well as initiate or deepen a banking relationship by opening an account.

Again, managers of the customer experience should be cognizant of both their risk in terms of exposure and moments of truth.  With an average of nearly one visit every other day, poorly executed mobile experiences represent significant exposure risk, yet the nature of these transactions represent low moment of truth risk.  Fortunately, 88% of customers are satisfied with their financial institution’s app, with a near super majority of customers describing themselves as very satisfied.  The branch and contact center have the opposite risk profile.  With, respectively, an average of just 7 and 17 visits annually, they do not represent a significant exposure risk.  However, both the contact center and the branch represent significant risk with respect to encountering moments of truth.  While digital channels are the daily face of the institution, when faced with a moment of truth, customers appear to prefer a see a real face, or hear a comforting voice.  Customers interact with branches and contact centers much less frequently – but when they do – it is important.  In this light, the relative dissatisfaction with these channels (average satisfaction 4.2 and 4.0, respectively) relative to apps and websites (average satisfaction 4.5 and 4.4, respectively) is cause for concern.  The computers appear to be out performing the people – but they perform on an easier playing field.

The current environment with pandemic-related disruptions has pushed most customers into accelerating digital adoption.  However, there is an element of trust missing with digital delivery.  As most customers shy away from digital channels when their need advances up the moment of truth scale.  Trust will be key in deepening digital relationships.

Conclusion

Momentum toward digital banking has been building for decades as emergent technologies, aided by the pandemic, increase the utility and use of digital channels.  This confluence of the pandemic and technical advances is culminating in an age where it is possible to deliver a seamless digital first integrated retail banking business model. 

Such an integrated delivery model is based on the understanding that customers have different needs at different moments of their customer journey.  This delivery model matches channels strategically to these different needs at the correct moment for the customer.

Neither size nor a focus on technology provides an advantage in terms of the overall customer experience.  The evidence strongly suggests, being closer to the customer, and matching different waypoints of the customer journey to the channels best suited for the specific waypoint is the best CX model:

•     Automated transactions are preferred with an app. 

•     The website is best positioned as an information center, and to a lesser extent transactional center. 

•     Problem resolution in customers’ minds is the contact center’s primary role.

•     Customers visit a branch to seek advice or open an account.

In future installments of this five-part series, we will:

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About Eric Larse

Eric Larse is co-founder of Seattle-based Kinesis CEM, LLC, which helps clients plan and execute their customer experience strategies through the intelligent use of customer satisfaction surveys and mystery shopping, linked with training and incentive programs. Visit Kinesis at: www.kinesis-cem.com

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