Success in retail banking requires meeting customers with the correct channel for the customer’s waypoint in that journey.
A waypoint is a point of reference when navigating a journey.
Not all waypoints are equal. Customers prefer different channels based on the waypoint in their customer journey. As a result, different channels have assumed different roles in the customer journey. The challenge for customer experience managers is to provide an integrated customer experience across all waypoints.
Kinesis’ research has identified specific roles for each integrated channel in the customer journey:
|Mobile||– Transaction Tool|
|Web||– Primary Role: Research Tool|
– Secondary Role: Sales & Transfers
|Contact Center||– Help Center|
– Source of Advice
|Branch||– Sales Center|
– Source of Advice
The mobile channel is seen by customers as a transaction tool; the website’s role is broader, as a research, transaction and sales channel; contact centers are primarily a help center; and the branch is primarily a sales and advice channel.
This post offers a framework to measure individual channels in a way that will provide both channel specific direction in managing the experience, as well as benchmarking each channel against each other using consistent measurements.
Two CX Risks: Exposure and Moments of Truth
In designing a customer experience measurement program, it is instructive to think of the omni-channel experience in terms of two risks: exposure and moments of truth.
Exposure risk is the frequency of customer interactions within each channel. Poor experiences in channels with high frequencies are replicated across more customers resulting in exposing more customers to poor experiences. Mobile apps are the most frequently used channel. According to our research, customers use mobile banking apps 24 times more frequently than visiting a branch. Mobile banking has most exposure risk. Websites are used by banking customers 16 times more frequently than a branch; followed contact centers, used 2.3 times more frequently than branches.
Moments of Truth
Moments of truth are critical experiences with more individual importance. Poor experiences in a moment of truth interaction lead to negative customer emotions, with similarly negative impacts on customer profitability and word of mouth.
Routine transactions, like transfers or deposits, represent low moment of truth risk, problem resolution or account opening are significant moments of truth.
Exposure & Moment of Truth Risk by Channel
Different channels represent exposure and moment of truth risk is different ways.
The mobile channel’s role is primarily a transaction tool. According to our research the mobile channel is the preferred channel for both transfers (58%) and deposits (53%). It, therefore, has the highest exposure risk and lowest moment of truth risk.
The website is a mixed channel between research, transactions and opening accounts. A plurality of customers (40%) consider the website their preferred channel to get information, followed by transfers (33%) and opening accounts (31%). As a result, the web channel has a mix of exposure and moment of truth risk.
The contact center is primarily viewed as a channel for problem resolution (51%), followed by an advice and information source (27% and 23%, respectively). It represents low exposure risk and elevated moment of truth risk.
Finally, the branch is the primary a source for advice and account opening (53% and 51%, respectively). With infrequent use and high impact customer experiences, the branch has very low exposure risk, and significant moment of truth risk.
Understanding Exposure and Moments of Truth Risk to Inform CX Measurement
This concept of risk, along exposure and moments of truth, provides an excellent framework for informing customer experience measurement.
Digital channels with high exposure risk should be tested thoroughly with usability, focus groups, ethnography and other qualitative research to ensure features meet customer needs and are programmed correctly. Once programmed and tested, they need to be monitored with ongoing audits.
Channels with higher moment of truth risk are best monitored with post-transaction surveys, mystery shopping and the occasional focus group.
|Exposure Risk||Moments of Truth|
|Design Focus Groups|
|Post Transaction Surveys|
Integrated CX Measurement Design
When measuring the customer experience across multiple channels in an integrated manner, we recommend gathering both consistent measures across all channels, as well as measures specific to each channel. Each channel has their own specific needs; however, consistent measures across all channels provide context and a point of comparison.
Cross-channel consistency is key to the customer experience. Inconsistent experiences confuse and frustrate customers, and risk erosion of the brand value.
The consistent cross-channel measures Kinesis prefers to use are measures of the brand personality and efficacy of the customer experience.
|Brand Personality||Efficacy of the Experience|
Likelihood of Referral
Brand Personality: To measure brand personality, Kinesis asks clients to list five adjectives that describes their brand personality. Then we simply ask customers if each adjective described the customer experience. We also ask clients to give us five statements that describe their desired brand, and measure the experience with an agreement scale. For example, a client may desire their brand to be described by the statements: We are committed to the community. We would then ask respondents the extent to which they are in agreement with the statement: We are committed to the community. These measures of brand adjectives and brand statements provide managers of the customer experience a clear benchmark from which to evaluate how each channel reflects the desired brand personality.
Efficacy of the Experience: Ultimately, the goal of the customer experience is to produce the intended result – results like loyalty, increased wallet share, or lower transaction costs. Kinesis has had success using three measures to evaluate the efficacy of the customer experience:
- Purchase Intent: Purchase intent is an excellent measure of efficacy of the experience. To measure purchase intent we ask respondents how the experience influenced their intention to either open an account or maintain an existing relationship with the financial institution.
- Likelihood of Referral: The use of measures of likelihood of referral, like NPS, as a proxy for customer loyalty is almost universally accepted, and as a result, is often an excellent measure of efficacy of the experience.
- Customer Advocacy: Beyond likelihood of referral, agreement with the statement, My bank cares about me, not just the bottom line, is an excellent predictor of customer loyalty.
Channel Specific Attributes
In addition to consistent cross-channel measurements, it is important to focus on channel specific customer experience attributes. While consistent measures across channels provide a benchmark to brand objectives, measuring specific service attributes provides actionable information about how to improve the customer experience in each specific channel.
In designing channel specific research features, ask yourself what specific service attributes or behaviors do you expect from each channel. The answer to these questions will depend on the channel and your brand objectives. In general, they typically roll up to the following broad dimensions of the customer experience:
Specific Channel Dimensions
|Digital Channels||Personal Channels|
For digital channels, the best specific attributes to measure are ones associated with appeal, identity, navigation, content/ presentation, value, trust. For personal channels, such as contact centers and branches, we find the best attributes are associated with dimensions of reliability, responsiveness, empathy, competence, and tangibles.
Not all waypoints in the customer journey are equal. Customer experience researchers need to consider the role of each channel in the customer journey and design measurement tools with both channel specific observations, as well consistent measures across all channels.
The migration away from the branch channel that started decades ago has accelerated in recent years – aided by the confluence of the pandemic and technical advances. Banks now operate in an age where it is possible to deliver a seamless integrated digital first retail banking delivery model. Such a digital first business model needs to accomplish two objectives in the digital space: it must foster trust and deliver personalization.
Kinēsis’ research into issues of trust and personalization, suggests there is much work financial institutions need to do to achieve the objective of fostering trust and delivering personalization. Nearly as many customers do not trust their primary financial institution as those who do. Meanwhile digital channels exhibit a weaker relationship between trust and satisfaction compared to non-digital channels.
Customer perceptions of trust and satisfaction with their primary financial institution vary greatly based on what they value in the relationship with a financial institution. Importantly, for managers of the customer experience, what customers value in a relationship with a financial institution also reflects channel preference and selection.
Understanding customer segments should inform channel management.
In our research, Kinēsis segmented survey respondents into four groups based on their answers to a battery of questions regarding which retail financial services are most important to them. This segmentation grouped respondents into four attitudinal segments which we describe as follows:
|Show Me The Money|
These customers seek financial value from financial institutions. They are significantly more likely than other respondents to feel value for money and competitive rates and fees are most important when doing business with a financial service provider.
These customers value personalized service from their financial service providers. They tend to feel the most important attributes of a financial service provider are personalized service with polite and knowledgeable staff, providing quick and efficient service and fast resolution to any issues.
Customers who grouped into this segment are were more likely to value a broad range of products, loyalty programs, ethical and sustainable business practices, recommendations and an appealing brand.
|Don’t’ Make Me Wait|
These customers value efficiency. Almost exclusively they respond quick and efficient service and fast resolution to any issues are most important to them.
Let’s explore how customer attitudes and values can reflect themselves in trust, satisfaction and behavior.
Trust in Financial Institution
Customers who value products and services have stronger trust in their primary financial institution, while those who value efficiency display weaker trust.
When asked the extent to which they agreed with the following statement, “My primary financial institution looks after my long-term financial wellbeing.” Customers who value products and services professed the strongest agreement with this statement, and were significantly more likely to agree with this statement compared to customers who value efficiency.
Satisfaction with Financial Institution by Channel
Customers who value products tend to be more satisfied, while customers who seek financial value tend to be less satisfied.
In general, automated channels appear to have higher satisfaction compared to personal channels. Customers expressed the highest satisfaction for mobile apps and the lowest satisfaction for contact centers.
Preferred Channel to Open Account
Customers who want quality products and services are significantly more likely to want to use a mobile app to open an account, as opposed to visit a branch.
About half of the respondents preferred to open an account at a branch, about one-third would prefer to use the website, while only one in ten would prefer a mobile app to open an account. The customer segment most likely to find appeal in using the mobile app are those who value products and services.
Preferred Channel for Problem Resolution
The contact center is the preferred channel to resolve a problem, followed by the branch.
Customers who want quality products and services are significantly more likely to want to use a mobile app to resolve a problem, as opposed to visit a branch.
Preferred Channel for Information
When asked how they prefer to get information, a plurality of customers prefer to use the website, followed by the contact center.
Customers who seek service quality are significantly more likely than financial value seekers to want to visit a branch to get information.
Preferred Channel for Advice
It is clear most customers still prefer the branch when seeking advice. Seeking advice is a type of transaction we refer to as a moment of truth, with high importance on the relationship with the customer, and it’s clear a little hand holding is appreciated across all segments.
Customers who seek service quality are significantly less likely than others to want to visit a website to seek financial advice.
Preferred Channel for Funds Transfer
The majority of customers prefer mobile apps to websites for funds transfers.
Customers who seek quality products or services are significantly more likely to prefer mobile apps to transfer funds, compared to those who seek service or efficiency.
When segmenting customers by what they value in a financial institution, differences begin to appear between customer segments in both measures of trust, satisfaction and behavior.
Customers who value products and services tend to trust and be more satisfied with their primary financial institution. This most likely reflects the transition from a branch centric model to a digital first model. Customers who are product oriented are less likely to require personal attention. Not surprisingly, these customers are also more likely to use a mobile app to complete a variety of transactions.
Preference for financial value and efficiency do not appear to have significant behavioral differences, however, attitudinally, they display different feeling of trust and satisfaction. Customers who value efficiency display weak trust in their primary financial institution; while those who seek financial value are generally less satisfied with their primary financial institution.
Customers who value service quality are most likely to be left behind in a switch from a branch distribution channel to a digital first deli very model. These customers represent 25% of all bank customers. They are less likely to use a website and app and more likely to visit a branch.
As the industry transitions to a digital first delivery model, managers of the customer experience will need to pay close attention to the customers who value personalized service and human interaction in the customer journey to foster both trust and satisfaction.
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:
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.
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:
A New Normal: Implications for Bank Customer Experience Measurement Post Pandemic – Planned Interactions
Part 2: Research Tools to Monitor Planned Interactions through the Customer Lifecycle
As we explored in an earlier post, Three Types of Customer Experiences CX Managers Must Understand, there are three types of customer interactions: Planned, Stabilizing, and Critical.
Planned interactions are intended to increase customer profitability through the customer lifecycle by engaging customers with relevant planned interactions and content in an integrated omni-channel environment. Planned interactions will continue to grow in importance as the financial service industry shifts to an integrated digital first model.
These planned interactions are frequently triggered by changes in account usage, financial situation, family profile, etc. CRM analytics combined with Big Data are becoming quite effective at recognizing such opportunities and prompting action toward planned interactions. Customer experience managers should have a process to record and analyze the quality of execution of planned interactions with the objective of evaluating their effectiveness – regardless of the channel.
The key to an effective strategy for planned interactions is relevance. Triggered requests for increased engagement must be made in the context of the customer’s needs and with their permission; otherwise, the requests will come off as clumsy and annoying, and give the impression the bank is not really interested in the customer’s individual needs. By aligning information about execution quality (cause) and customer impressions (effect), customer experience managers can build a more effective and relevant approach to planned interactions.
Research Plan for Planned Interactions
The first step in designing a research plan to test the efficacy of these planned interactions is to define the campaign. Ask yourself, what customer interactions are planned through these layers of integrated channels. Mapping the process will define your research objectives, allowing an informed judgment of what to measure and how to measure it.
For example, after acquisition and onboarding, assume a bank has a campaign to trigger planned interactions based on triggers from past engagement. These planned interactions are segmented into the following phases of the customer lifecycle: engagement, growth, and retention.
Often it is instructive to think of customer experience research in terms of the bank-customer interface, employing different research tools to study the customer experience from both sides of this interface.
In our example above, management may measure the effectiveness of planned experiences in the engagement phase with the following research tools:
|Customer Side||Brand Side|
These post-experience surveys are event-driven, where a transaction or service interaction determines if the customer is selected for a survey. They can be performed across all channels, digital, contact center and in-person. As the name implies, the purpose of this type of survey is to measure experience with a specific customer experience.
Ultimately, employees are at the center of the integrated customer experience model.
Employee surveys often measure employee satisfaction and engagement. However, there is far more value to be gleaned from employees. We employ them to understand what is going on at the customer-employee interface by leveraging employees as a valuable and inexpensive resource of customer experience information.
They not only provide intelligence into the customer experience, but also evaluate the level of support within the organization, and identify perceptual gaps between management and frontline personnel.
|Overall Satisfaction Surveys
Overall satisfaction surveys measure customer satisfaction among the general population of customers, regardless of whether or not they recently conducted a transaction. They give managers valuable insight into overall satisfaction, engagement, image and positioning across the entire customer base, not just active customers.
|Digital Delivery Channel Shopping
Be it a website or mobile app, digital mystery shopping allows managers of these channels to test ease of use, navigation and the overall customer experience of these digital channels.
|Transactional Mystery Shopping
Mystery shopping is about alignment. It is an excellent tool to align the customer experience to the brand. Best-in-class mystery shopping answers the question: is our customer experience consistent with our brand objectives? Historically, mystery shopping has been in the in-person channel, however we are seeing increasing mystery shopping to contact center agents.
In the growth phase, we measure the effectiveness of planned experiences on both sides of the customer interface with the following research tools:
|Customer Side||Brand Side|
Awareness of the brand, its products and services, is central to planned service interactions. Managers need to know how awareness and attitudes change as a result of these planned experiences.
|Cross-Sell Mystery Shopping
In these unique mystery shops, mystery shoppers are seeded into the lead/referral process. The sales behaviors and their effectiveness are then evaluated in an outbound sales interaction.
These shops work very well in planned sales interactions within the contact center environment.
|Wallet Share Surveys
These surveys are used to evaluate customer engagement with and loyalty to the institution. Specifically, they determine if customers consider the institution their primary provider of financial services, and identify potential road blocks to wallet share growth.
Finally, planned experiences within the retention phase of the customer lifecycle may be monitored with the following tools:
|Customer Side||Brand Side|
|Critical Incident Technique (CIT)
CIT is a qualitative research methodology designed to uncover details surrounding a service encounter that a customer found particularly satisfying or dissatisfying. This research technique identifies these common critical incidents, their impact on the customer experience, and customer engagement, giving managers an informed perspective upon which to prepare employees to recognize moments of truth, and respond in ways that will lead to positive outcomes.
Employees observe firsthand the relationship with the customer. They are a valuable resource of customer experience information, and can provide a lot of context into the types of bad experiences customers frequently experience.
|Lost Customer Surveys
Closed account surveys identify sources of run-off or churn to provide insight into improving customer retention.
|Life Cycle Mystery Shopping
If an integrated channel approach is the objective, one should measure the customer experience in an integrated manner.
In lifecycle shops, shoppers interact with the bank over a period of time, across multiple touch points (digital, contact center and in-person). This lifecycle approach provides broad and deep observations about sales and service alignment to the brand and performance throughout the customer lifecycle across all channels.
Comment tools are not new, but with modern Internet-based technology they can be used as a valuable feedback tool to identify at risk customers and mitigate the causes of their dissatisfaction.
Call to Action – Make the Most of the Research
For customer experience surveys, we recommend testing the effectiveness of planned interactions by benchmarking three loyalty attitudes:
- Would Recommend: The likelihood of the customer recommending the bank to a friend, relative or colleague.
- Customer Advocacy: The extent to which the customer agrees with the statement, “My bank cares about me, not just the bottom line?”
- Primary Provider: Does the customer consider the institution their primary provider for financial services?
For mystery shopping, we find linking observations to a dependent variable, such as purchase intent, identifies which sales and service behaviors drive purchase intent – informing decisions with respect to training and incentives to reinforce the sales activities which drive purchase intent.
As the integrated digital first business model accelerates, planned interactions will continue to grow in importance, and managers of the customer experience should build customer experience monitoring tools to evaluate the efficacy of these planned experiences in terms of driving desired customer attitudes and behaviors.
A New Normal: Implications for Bank Customer Experience Measurement Post Pandemic – Three Types of Customer Experiences
Part 1: Three Types of Customer Experiences CX Managers Must Understand
COVID-19 Crisis Accelerating Change
The transformation began decades ago. Like a catalyst in a chemical reaction, the COVID-19 crisis has accelerated the transformation away from in-person channels. Recognizing paradigm shifts in the moment is often difficult, however – a long coming paradigm shift appears to be upon us.
Shifts away from one thing require a shift toward another. A shift away from an in-person first approach is toward a digital first approach with increasing integrated layers of engagement and expertise.
Digital apps allow for a near continuous engagement with customers. Apps now sit in customer’s pockets and are available to the customer on demand when and where they need them. This communication actually works both ways with the customer providing information to the bank, and the bank informing the customer. Managers of the customer experience can now deliver contextually relevant information directly to the customer. Automated advice and expertise is in its infancy, and shows promise. Chat bots and other preprogrammed help and advice can start the process of delivering help and expertise when requested.
Contact centers are the next logical layer of this integrated customer experience. Contact centers are an excellent channel to deliver general customer service and advice, as well as expert advice for more sophisticated financial needs. Kinesis has clients with Series 7 representatives and wealth managers providing expert financial advice via video conference.
The role of the branch obviously includes providing expert advice. Branches will continue to become smaller, more flexible, less monolithic and, tailored to the location and market. Small community centers will focus on community outreach, while larger flagship branches sit at the center of an integrated hub and spoke model – a model that includes digital and contact centers.
Three Types of Experiences
Every time a customer interacts with a bank, regardless of channel, they learn something about the bank, and adjust their behavior based on what they learn. This is the core component of customer experience management – to teach customers to behave in profitable ways. It is incumbent on managers of the customer experience to understand the different types of customer experiences, and their implications for managing the customer experience in this manner. Customer experiences come in a variety of forms; however there are three types of experiences customer experience managers should be alert to. These three are: planned, stabilizing, and critical experiences.
Planned interactions are intended to increase customer profitability by engaging customers in meaningful conversations in an integrated omni-channel environment. These interactions can be triggered by changes in the customers’ purchasing patterns, account usage, financial situation, family profile, etc. CRM analytics combined with Big Data are becoming quite effective at recognizing such opportunities and prompting action. Customer experience managers should have a process to record and analyze the quality of execution of planned interactions, with the objective of evaluating their performance.
The key to an effective strategy for planned interactions is appropriateness. Triggered requests for increased spending must be made in the context of the customer’s needs and with their permission; otherwise the requests will come off as clumsy, annoying, and not customer centric. By aligning information about execution quality (cause) and customer actions (effect), customer experience managers can build a more effective and appropriate approach to planned interactions.
In future posts, we will look at planned experiences and consider their implications in light of this shift toward a digital first approach.
Stabilizing interactions promote customer retention, particularly in the early stages of the relationship.
New customers are at the highest risk of defection. Long-term customers know what to expect from their bank, and due to self-selection, their expectations tend to be aligned with their experience. New customers are more likely to experience disappointment, and thus more likely to defect. Turnover by new customers is particularly unprofitable because many defections occur prior to the break-even point of customer acquisition costs, resulting in a net loss on the customer. Thus, experiences that stabilize the customer relationship early ensure a higher proportion of customers will reach positive profitability.
The keys to an effective stabilizing strategy are education, consistency, and competence. Education influences expectation and helps customers develop realistic expectations. It goes beyond simply informing customers about the products and services offered. It systematically informs new customers how to use the bank’s services more effectively and efficiently: how to obtain assistance, how to complain, and what to expect as the relationship progresses. For an integrated digital first business model to work, customers need to learn how to use self-administered channels and know how, and when, to access the deeper layers offering more engagement and expertise.
In future posts, we will look at stabilizing experiences and consider their implications in light of this shift toward a digital first approach.
Critical interactions are events that lead to memorable customer experiences. While most customer experiences are routine, from time to time a situation arises that is out of the ordinary: a complaint, a question, a special request, a chance for an employee to go the extra mile. Today, many of these critical experiences occur amidst the underlying stresses of the COVID-19 crisis. The outcomes of these critical incidents can be either positive or negative, depending upon the way the bank responds to them; however, they are seldom neutral. The longer a customer remains with a financial institution, the greater the likelihood that one or more critical experiences will occur – particularly in a time of crisis, like the pandemic.
Because they are memorable and unusual, critical interactions tend to have a powerful effect on the customer relationship. We often think of these as “moments of truth” where the institution has an opportunity to solidify the relationship earning a loyal customer, or risking the customer’s defection. Positive outcomes lead to “customer delight” and word-of-mouth endorsements, while negative outcomes lead to customer defections, diminished share of wallet and unfavorable word-of-mouth.
The key to an effective critical interaction strategy is opportunity. Systems and processes must be in a position to react to these critical moments of truth. An effective customer experience strategy should include systems for recording critical interactions, analyzing trends and patterns, and feeding that information back to management. This can be particularly challenging in an integrated Omni-channel environment. Holistic customer profiles need to be available across channels, and employees must be trained to recognize critical opportunities and empowered to respond to them in such a way that they will lead to positive outcomes and desired customer behaviors.
In future posts, we will look at critical experiences and consider their implications in light of this shift toward a digital first approach.
In summary, the most common cause of spread is believed to be airborne by inhaling virus particles exhaled into the environment. The infectious dose of a virus is the amount of virus a person needs to be exposed to in order to establish an infection. We currently do not know the infectious dose for SARS-CoV-2. Estimates range from a few hundred to a few thousand virus particles. One virus particle will not cause an infection. To be infected one must exceed the infectious dose by either being exposed to a cough or a sneeze. Absent coughs or sneezes, under normal activity one must be exposed to the virus over time to exceed the infectious dose.
This post draws ocorn the foundation of the first to discuss the implications of the pandemic on the customer experience.
Modern day customer experiences exist in a finely tuned ecosystem, where the dramatic changes as a result of the pandemic have off set the delicate balance, causing problems from supply chain disruptions to an immediate shift away from in-person channels.
Furthermore, the pandemic represents what I call a moment of truth regarding the relationship with customers. Moments of truth are specific experiences of high importance, where a customer either forms or changes their opinion of a brand in meaningful and lasting ways. How brands respond to moments of truth, particularly in this time of global crisis, will strengthen or weaken the customers’ relationship to the brand.
Moments of truth are specific experiences of high
importance, where a customer either forms or changes
their opinion of a brand in meaningful or lasting ways.
Customers are stressed. They feel uncertainty, fear and, frankly, exhaustion. Ongoing concern for personal safety, education of children, and the well being of loved ones is exhausting. This uncertainty and fear drives customers to seek shelter from resources they trust. Brands which become a trusted resource, which provide comfort, true comfort, in the face of this crisis have an opportunity to not only do the right thing, but cement their customers’ relationship with the brand. On the other hand, brands which fail to do so, risk destruction of their customer relationships.
Care for all Stakeholders
Perhaps the most important way brands can respond to the moment of truth presented by this crisis is showing true care for stakeholders in the brand: customers, employees, and the community.
Care for Customers
Brands must communicate care for customers. Drawing on a personal example, March of 2020 was a particularly worrisome time for me. At that time, the Seattle area was considered one of the epicenters of the outbreak, mandatory stay at home orders where being introduced – fear ruled – fear driven by uncertainty; uncertainty with respect to the safety of myself and loved ones; uncertainty with respect to the financial future; uncertainty with respect to the state of the entire globe.
Amidst all this uncertainty and fear I received an email from Citigroup entitled “Covid-19. Let us know if we can help.” It communicated personal care for me, encouraged alternative channel use: online, mobile and 24/7 contact center assistance, and contained links to CDC guidance.
A week later the campaign continued with an update on the actions Citigroup was implementing based on the pandemic; again, educating me to digital tools available, offering personal assistance if needed.
Two and a half months later, in June, I received an email expressing “heartfelt thanks” for adapting to changes and remaining loyal. It described ways Citigroup was assisting with a variety of COVID-19 relief, specifically introducing a partnership with celebrity chef Jose Anres’ World Central Kitchen Campaign distributing meals in low-income neighborhoods in big cities like New York, and monitoring the globe for food shortages elsewhere. This not only demonstrated care for me personally, but care for the community.
Care for Communities
Citigroup’s donations to the World Central Kitchen campaign is one example of care for our communities. There are countless examples of brands offering community support.
- A beer brewery, Brewdog, shifted production away from beer to hand sanitizer.
- A Spanish sports retailer donated scuba masks to hospitals.
- EBay offered free services to small business forced to switch from brick-and-mortar to ecommerce to keep their small business afloat – pledging $100 million in support of this endeavor.
Care for Employees
Employees are important. They animate the brand and drive customer loyalty – particularly in moments of truth like these. Research has determined that in many retail and service environments, there is a positive correlation between employee satisfaction and employee retention as well as customer loyalty. They are not immune from the fear and the stress of this crisis. Additionally, frontline employees spend all their time in the brand-customer interface. They are the personal representatives of the brand.
Additionally, given these front-line employees spend the majority of their time in the brand-customer interface, they tend to have a level of understanding about the customer experience that management often misses.
As a result, it is incumbent on brands to attend to the stresses employees are under, demonstrate concern, and develop communication channels for employees to feed customer experience intelligence to management.
I’ve always been an advocate of meeting customers in their preferred channel; meeting them where they are today and delivering a seamless experience. Obviously, over the recent decades there has been a migration from in-person channels to increasing self-directed, alternative channels. The pandemic has immediately accelerated this shift. Be it telehealth, online banking, in-home instruction of our children, or a restaurant delivering through UberEats, providers of all types now face increasing pressure to bring their business to their customers’ homes.
Emotional Well Being
As observed earlier, this pandemic is a moment of truth between many brands and their customers. In our experience, customers primarily want three things from a provider: 1) empathy, 2) care/concern for their needs, and 3) competence. We see this constantly. Customers want to do business with brands that empathize with them, care about their needs, and are capable of satisfying those needs in a competent manner. Brands that seek to attend to the emotional needs of their customers during this moment of truth will earn the loyalty and positive word-of-mouth of their customers.
In-Person Precautions and Mitigation Strategies
While the pandemic has accelerated an ongoing transition to alternative channels, some industries require an in-person experience. Based on current science, in-person interactions can be relatively safe if followed within CDC and public health guidance outlined in the first part of this series:
- Physical Distancing: Estimates of exposure time all assume close personal contact. Physical distancing decreases the likelihood of receiving an infectious dose by putting space between ourselves and others – current recommendations are 6 feet.
Furthermore, many in-person transactions can now be done touch free. I recently had to rent a car, and was pleased to meet the rental attendant outside holding a tablet. The attendant took down all my information, I never had to touch or sign anything. In a different transaction, requiring a signature, I was offered a single use pen to keep.
- Masks: Masks are a core tool to provide physical distancing between individuals. Masks do not primarily act as a filter for the wearer, but suppress the amount of droplets an infected person can spread into the space around them. This reduces the risk that others will exceed the infectious dose of the virus.
- Ventilation: Well ventilated areas disperse virus particles making it less likely a dose exceeds the infectious limits. Like my car rental agency, brands should endeavor to provide well ventilated spaces for employees and customers to interact – not only to protect customers but employees as well.
- Length of Exposure: Finally, brands should design service encounters to be as time efficient as possible. Again, the CDC advises a 15-minute exposure limit for close personal contact. Social distancing through physical distance, masks, and ventilation should increase this safe exposure limit. However, strategies should be implemented to make service encounters as brief as possible. For example, if you require information from your customers as part of the service interaction, collect this required information online or over the phone prior to an appointment. This could help to make customers and employees safer and more comfortable.
- Hand Washing & Sanitizer: Hand washing and sanitization is the primary defense against transfer infections.
Putting it All Together
Putting all this together, let’s look at an industry Kinesis has the most experience with. Kinesis’ largest practice is in the banking and financial services industry. Recently the American Bankers Association (ABA) released the results of an industry survey regarding publically announced responses of US banks to the pandemic. 
Many banks are applying some of the concepts discussed above in creative ways. A review of a random selection of banks reveals the following responses ranked from most common to least common:
- Enhanced deep cleaning and disinfecting of work spaces;
- Implementing social distancing in work spaces, including branches;
- Encouraging use of alternative delivery channels, such as mobile and internet banking;
- Personalized assistance to customers negatively impacted by the pandemic;
- Increased donations to charity/ partnering with the local community to mitigate the effects of the pandemic;
- Allowing employees to work remotely if possible;
- Limiting access to branches (closing branch lobbies, limiting hours, appointment only banking);
- Paid time off for employees to self-quarantine or to care of school age children;
- Rotating schedules of customer-facing staff to reduce risk (one institution has applied a 10 days on 10 days off policy); and
- Educating customers of pandemic related fraud/scams.
 Geddes, Linda. “Does a high viral load or infectious dose make covid-19 worse?” newscientist.com, March 27, 2020. Web May 14, 2020.
 “America’s Banks Are Here to Help: The Industry Responds to the Coronavirus.” ABA.com, April 29, 2020. Web. May 19 2020.
As bank contact centers transition from service hubs to sales centers. It is instructive to investigate which service attributes and behaviors will yield the most ROI in terms of driving sales through the contact center channel.
Beyond the attributes measured in the previous post, Kinesis also performed mystery shop observations of specific behaviors across six institutions with national scope to determine their relationship to purchase intent.
While the importance of a good first impression is true, across the four greeting behaviors measured, there does not appear to any significant differences between shops with positive purchase intent and shops with negative purchase intent.
|Greeting||Increased Purch Intent||Decreased Purch Intent|
|Greet by identifying the name of the institution||99%||97%|
|Greet by identifying themselves||100%||97%|
|Ask how they could assist||100%||98%|
This is mostly due to the high rate of performance across these greeting behaviors. Greetings are strong across all shops regardless of purchase intent.
With respect to broader service behaviors, the behaviors with the largest gaps between shops with positive purchase intent and those with negative purchase intent are: suggesting additional products and asking for the business (each with about 2 times as many shoppers who experience positive purchase intent observing these behaviors compared to shoppers who experience negative purchase intent). Use name, use of understandable descriptions and clarity of speech round out the next three.
Hold & Transfer Behaviors
When the shopper was placed on hold, five behaviors were measured. Of these, giving an estimate of how long the customer will be on hold, and returning if the hold time exceed the original estimate to advice of the status of the call were the behaviors with the strongest relationship to purchase intent. Again, both with about 2 times as many shoppers who experienced positive purchase intent observing these behaviors compared to shoppers who experienced negative purchase intent.
Additionally, five transfer behaviors were measured. Of these, the behavior with the strongest relationship to purchase intent by far is returning to explain any delay after 60 seconds. With five times as many shoppers who reported positive purchase intent observing this behavior relative to those who reported negative purchase intent.
Finally, at the conclusion of the call, asking how else the agent could be of assistance and thanking the shopper for choosing the institution were the two behaviors with the strongest relationship to purchase intent.
Of the behaviors measured, a couple of common themes tend to be present in the behaviors with strong relationships to purchase intent. The behaviors with strong relationships to purchase intent tend to deal with the themes of personalized service and valuing the customer.
These behaviors with strong relationships to purchase intent group into these two themes as follows:
- If transfer hold time exceeds 60 seconds, explain delay and ask if customer wants to continue (this behavior 5 times more likely in shops with positive purchase intent compared to negative)
- Give estimate of hold time (2.1 times more frequent in shops with positive purchase intent compared to negative)
- If hold exceeds estimate, return with status update (1.8 times more frequent)
- If transfer, stay on line until completed (1.6 times)
- Use of name (1.5 times)
- Ask how else could assist (1.5 times)
- Suggest additional products or services (2.1 times more frequent in shops with positive purchase intent)
- Ask for business (1.9 times)
- Thanks for choosing the institution (1.5 times)
To maximize purchase intent, focus agents on behaviors which personalize the service in an empathetic manner (care for the customer and their needs) and value their business.
Historically, bank contact centers have served primarily as service hubs, serving customers who call for information or are seeking assistance dealing with a problem in need of resolution. As banks continue to transition into an omni-channel model where customers can interact with the institution across a broad spectrum of channels, the contact center is transitioning into a sales hub, where customers who have researched a product online may still want to speak with a person prior to completing the purchase. As a result, contact center agents will require a new set of sales skills.
To help understand some of the new skill sets required of contact center agents as they transition from a service to sales role, Kinesis conducted mystery shops of six institutions with national scope to identify what customer experience attributes will yield the most ROI in supporting this sales role.
Our conclusion is customers want empathy and competence. They want agents who both care about their needs and can satisfy those needs.
Kinesis performed an analysis of purchase intent to identify the attributes with the most potential for ROI in supporting a sales role. We asked shoppers to rate the experience across a spectrum of service attributes on a 5-point scale where 1 is poor and 5 is excellent; as well assigning a purchase intent rating on a similar 5-point scale. We then cross tabulated the results by purchase intent to identify which attributes have the largest gap between shops which reported positive purchase intent and those which reported negative purchase intent.
Confidence in the Agent, valuing as a customer, interest in helping and explain the products in understandable terms are the four attributes with largest gaps between shops with positive purchase intent and negative, followed by professionalism and job knowledge. Friendliness/courtesy was the attribute with the smallest gap. While friendliness is important, when it comes to driving purchase intent, the attributes with the largest gaps are those related to care and competence. Customers want agents who care about their needs, and are capable of delivering on those needs.
Previously, we also explored the relationship of specific sales and service behaviors to purchase intent.
Cross Tabulation By Purchase Intent
|Greeting||Increased Purch Intent||Decreased Purch Intent|
|Greet by identifying the name of the institution||99%||97%|
|Greet by identifying themselves||100%||97%|
|Ask how they could assist||100%||98%|
|Hold||Increased Purch Intent||Decreased Purch Intent|
|Ask permission to be placed on hold first||85%||73%|
|Give the reason for being placed on hold||100%||88%|
|Give an estimate of how long you would be on hold||56%||27%|
|If the actual hold time exceeded the estimate, representative returned to the call to of the status||88%||50%|
|Thank for holding upon returning||96%||81%|
|Transfer||Increased Purch Intent||Decreased Purch Intent|
|Explain the reason for the transfer||99%||98%|
|Ask permission to transfer||84%||65%|
|Stay on the line until the transfer was answered by another representative||53%||33%|
|If hold time exceeded 60 seconds, return to explain delay and ask if you want to continue to hold.||35%||7%|
|Service||Increased Purch Intent||Decreased Purch Intent|
|Use name at least once during the call||66%||44%|
|Use proper grammar||11%||96%|
|Allow customer to speak first and finish your thought||99%||93%|
|Clarify all requests prior to processing the transaction||100%||80%|
|Maintain a friendly demeanor and pleasant voice throughout the call||100%||91%|
|Describe products or services in a manner that was easy to understand||100%||70%|
|Suggest additional products and/or services||71%||34%|
|Avoid bank jargon or other technical financial terms||100%||95%|
|Ask for business||88%||47%|
|Conclusion||Increased Purch Intent||Decreased Purch Intent|
|Thank for calling||98%||92%|
|Ask how else they could assist||95%||65%|
|Thank for choosing the institution||92%||66%|
|Mean Attribute Ratings||Increased Purch Intent||Decreased Purch Intent|
|Interest in Helping||4.9||3.8|
|Explaining products in understandable terms||5.0||3.9|
|Level of confidence in the representative||4.9||3.2|
|Valuing as a customer||4.9||3.5|
Increasingly banks must operate in a multi-channel environment. While the changing role of the branch, combined with automated channels such as online and mobile, are getting a lot of attention, there remains a key role for the contact center in delivering an effective customer experience. Central to this key role is designing an effective customer experience, comprised of the right sales and service behaviors – those which influence customer attitudes and behaviors in a profitable way yielding the most return on investment.
To provide direction with respect to what sales and service behaviors will yield the most return on investment, Kinesis conducted a series of mystery shops to identify which sales and service behaviors have the most influence on purchase intent. In addition to observing specific sales and service behaviors, mystery shoppers were also asked to rate how the call would have influenced their purchase intent if they had been a real customer. This purchase intent rating was then used as means of calculating the strength of the relationship between each behavior and purchase intent.
To determine the relationship between these service attributes and purchase intent, the data for these different studies was cross-tabulated by the purchase intent rating and subjected to significance testing. [i]
When the percentage of calls in which purchase intent significantly increased is tested against the percentage of calls where purchase intent significantly decreased, nearly all the sales and service attributes are statistically significant at or above a 95% confidence level.
|Significantly Increased||Significantly Decreased||Test Statistic|
|Explanations easy to understand||99%||45%||9.0|
|When thanked, respond graciously||98%||42%||8.5|
|Friendly demeanor / pleasant voice||100%||60%||8.4|
|Express appreciation for interest / thank you for business||92%||20%||8.3|
|Ask probing questions||79%||10%||6.4|
|Offer further assistance||85%||25%||6.2|
|Speak clearly and avoid bank jargon||98%||68%||5.8|
|Listen attentively to your needs||80%||25%||5.3|
|Mention other bank product||99%||75%||5.3|
|Invite you to visit branch||64%||10%||4.6|
|Explain the value of banking with bank||57%||5%||4.4|
|Offer to mail material / mention website||66%||20%||4.3|
|Ask your name||68%||25%||3.8|
|Ask for your business / close the sale||57%||21%||2.9|
|If no one available to assist you, offered options||100%||0%||2.2|
The differences between the highest and lowest purchase intent for product knowledge and ease to understanding explanations are the most significant, while a professional greeting is the least significant.
Dividing these behaviors into rough quartiles and comparing them side-by-side, reveals some interesting observations:
Explanations easy to understand
When thanked, respond graciously
Friendly demeanor / pleasant voice
Express appreciation for interest / thank you for business
Ask probing questions
Offer further assistance
Speak clearly and avoid bank jargon
When thanked, employee respond graciously
|Listen attentively to your needs
Mention other bank product
Invite you to visit branch
Explain the value of banking with bank
Offer to mail material / mention website
|Ask your name
Ask for your business / close the sale
If no one available to assist you, offered options
The attributes with the most significant differences between high and low purchase intent ratings appear to be those associated with reliability and empathy. It appears mystery shoppers valued such “core” attributes as product knowledge or interest/enthusiasm for the customer. They seem to be less concerned with more peripheral service attributes, such as asking for names, etc. Influencing purchase intent is not as simple as merely using the customer’s name or answering the phone within a short period of time. Rather it is a much more challenging undertaking of being competent in your job and having the customer’s best interests at heart.
[i] Significance testing determines if any differences observed are the result of actual differences in the populations measured rather than the result of normal variation. Without getting into too much detail, significance testing produces a test statistic to determine the probability that differences observed are statistically significant. A test statistic above 1.96 equates to a 95% confidence level, which means there is a 95% chance any differences observed are the result of actual differences in the populations measured rather than normal variation. For all practical purposes a test statistic over 3.1 means there is 100% chance the differences observed are statistically significant (although in reality the probability never reaches 100%). Finally, in interpreting the following analysis, it is important note that test statistics are not lineal. A test statistic of two is not twice as significant as a test statistic of one. The influence on significance decreases as the test statistic increases. However, the test statistic does give us an opportunity to rank the service attributes by their statistical significance.