Tag Archive | Customer Experience Strategy

The 5 Service Dimensions All Customers Care About

Reprinted with permission from Chris Arlen, of Service Performance.

by CHRIS ARLEN

Not All Dimensions Are Equal

All dimensions are important to customers, but some more than others.

Service providers need to know which are which to avoid majoring in minors. At the same time they can’t focus on only one dimension and let the others suffer.

SERVQUAL research showed dimensions’ importance to each other by asking customers to assign 100 points across all five dimensions.*

Here’s their importance to customers.

The 5 Service Dimensions Customers Care About

SERVQUAL

What’s this mean for service providers?

#1 Just Do It

RELIABILITY: Do what you say you’re going to do when you said you were going to do it.

Customers want to count on their providers. They value that reliability. Don’t providers yearn to find out what customers value? This is it.It’s three times more important to be reliable than have shiny new equipment or flashy uniforms.

Doesn’t mean you can have ragged uniforms and only be reliable. Service providers have to do both. But providers first and best efforts are better spent making service reliable.

Whether it’s periodics on schedule, on-site response within Service Level Agreements (SLAs), or Work Orders completed on time.

#2 Do It Now

RESPONSIVENESS: Respond quickly, promptly, rapidly, immediately, instantly.

Waiting a day to return a call or email doesn’t make it. Even if customers are chronically slow in getting back to providers, responsiveness is more than 1/5th of their service quality assessment.

Service providers benefit by establishing internal SLAs for things like returning phone calls, emails and responding on-site. Whether it’s 30 minutes, 4 hours, or 24 hours, it’s important customers feel providers are responsive to their requests. Not just emergencies, but everyday responses too.

REPORTING RESPONSIVENESS

Call centers typically track caller wait times. Service providers can track response times. And their attainment of SLAs or other Key Performance Indicators (KPIs) of responsiveness. This is great performance data to present to customers in Departmental Performance Reviews.

#3 Know What Your Doing

ASSURANCE: Service providers are expected to be the experts of the service they’re delivering. It’s a given.

SERVQUAL research showed it’s important to communicate that expertise to customers. If a service provider is highly skilled, but customers don’t see that, their confidence in that provider will be lower. And their assessment of that provider’s service quality will be lower.

RAISE CUSTOMER AWARENESS OF YOUR COMPETENCIES

Service providers must communicate their expertise and competencies – before they do the work. This can be done in many ways that are repeatedly seen by customers, such as:

  • Display industry certifications on patches, badges or buttons worn by employees
  • Include certification logos on emails, letters & reports
  • Put certifications into posters, newsletters & handouts

By communicating competencies, providers can help manage customer expectations. And influence their service quality assessment in advance.

#4 Care about Customers as much as the Service

EMPATHY: Services can be performed completely to specifications. Yet customers may not feel provider employees care about them during delivery. And this hurts customers’ assessments of providers’ service quality.

For example, a day porter efficiently cleans up a spill in a lobby. However, during the clean up doesn’t smile, make eye contact, or ask the customer if there is anything else they could do for them. In this hypothetical the provider’s service was performed fully. But the customer didn’t feel the provider employee cared. And it’s not necessarily the employees fault. They may not know how they’re being judged. They may be overwhelmed, inadequately trained, or disinterested.

SERVICE DELIVERY MATTERS

Providers’ service delivery can be as important as how it was done. Provider employees should be trained how to interact with customers and their end-users. Even a brief session during initial orientation helps.  Anything to help them understand their impact on customers’ assessment of service quality.

#5 Look Sharp

TANGIBLES: Even though this is the least important dimension, appearance matters. Just not as much as the other dimensions.

Service providers will still want to make certain their employees appearance, uniforms, equipment, and work areas on-site (closets, service offices, etc.) look good. The danger is for providers to make everything look sharp, and then fall short on RELIABILITY or RESPONSIVENESS.

At the End of the Day

Customers’ assessments include expectations and perceptions across all five SERVQUAL dimensions. Service providers need to work on all five, but emphasize them in order of importance. If sacrifices must be made, use these dimensions as a guide for which ones to rework.

Also, providers can use SERVQUAL dimensions in determining specific customer and site needs. By asking questions around these dimensions, providers can learn how they play out at a particular location/bid opportunity. What dimensions are you in?

* For a description of the SERVQUAL methodology, see the following post: SERVQUAL Model: A Multi-Item Tool for Comparing Customer Perceptions vs. Expectations


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5 Steps to Make Frontline Employees Authentic Representatives of the Brand

Actions speak louder than words.  Brands spend millions of dollars on external messaging to define an emotional connection with the customer.  However, when a customer perceives a disconnect between an employee representing the brand and external messaging, they almost certainly will experience brand ambiguity.  The result severely undermines these investments; not only for the customer in question, but their entire social network.  In today’s increasing connected world, one bad experience could be shared hundreds if not thousands of times over.

Bottom line, frontline employees must be authentic representatives of the brand.

Simple enough, right?  Nearly all rational managers will agree with the above statement.  But how does management ensure that employees animate the brand? – It is a process of alignment.

Here are five steps to align the customer experience with external messaging:

  1. Align external messaging with customer expectations:   Repeatedly test the effect of external messages on customer expectations.  Ask yourself, what expectations are we instilling based on our messaging?  Additionally, the next four steps will help ensure that operational staff fully understand and are equipped to handle these promises made to customers.
  1. Align customer expectations with company service standards:  Even in the most sophisticated and progressive companies, standards of service delivery can be out of sync with customer needs and expectations. One reason is that customers are seldom involved in the writing of these standards. Rather, service standards tend to be the product of mid-management committees, resulting in a hodge-podge of ideas and opinions that are more a reflection of operational expediency than of customer expectations.  A better practice is to calibrate service standards against customer needs, expectations and experiences.
  1. Align service standards with training content:  Training should arise from standards, not vice versa.  Bring training managers into the process from the beginning, ensuring that as standards are adjusted, training content will follow.
  1. Align training content with frontline execution:  The success of most training programs is measured in terms of the participant’s ability to recall the content, rather than to apply the information on the job.  A more proactive practice is to identify specific deficiencies in service delivery and adjust training content to address those deficiencies.
  1. Align frontline execution with rewards and incentives:  At the managerial level, incentives tend to be in the form of quarterly bonuses linked to metrics such as customer satisfaction and service execution scores.  However, you can go farther.  Depending on the data available, consider rewards on a much more immediate and shorter cycle.  For example, on a daily basis, call centers agents can receive bonus points that are immediately redeemable at on-line redemption sites.  Or a bank teller may receive an immediate reward if they display the appropriate behavior to a mystery shopper. Thus, employees receive quick, meaningful rewards that reinforce the specific skills that are needed to improve customer experiences.

These are five steps to align the customer experience with external messaging.  How do you ensure your frontline employees are authentic representatives of the brand?


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Shareholder Return and the Customer Experience: A Case for Investment in the Customer Experience

I recently came across a very intriguing bit of research that suggests the benefits of investments in the customer experience in terms of shareholder return.

Great customer service processes and people are not built overnight. They take years of investment to cultivate. Unfortunately, for some publically traded companies, the short-term demands of Wall Street make such investment difficult. The demands of investors to meet earnings estimates for the next quarter can make it difficult for managers to invest in the customer experience – the payback is too slow and uncertain.

Stockholders have little patience nowadays with investments that do not show a clear and quick return. To ensure that managers are acting in the owners’ interests, management incentives are more frequently tied to quarterly financial performance than to difficult-to-measure variables like customer loyalty.

Given great customer experiences are not built overnight, they are constantly at risk of budget cuts by managers who would boost short term earning at their expense. Service initiatives have a tendency to come and go in large companies before they have a chance to prove their worth, resulting in customer frustration, employee cynicism and widespread service mediocrity.

Service gurus talk about the need for “investor loyalty” as a counterbalance to customer loyalty, but that requires a visionary, motivated and stable management team who can convince investors to look farther ahead.

Easier said than done, right? How does one make the case for investments in the customer experience in an environment that demands making the next quarters numbers?

Jim Picoult, founder of Watermark Consulting, has an answer. Jim has created a stock index based on Forester’s annual Customer Experience Index (CXI). Jim calculated the returns of two hypothetical portfolios consisting of the top and bottom 10 publicly traded companies in Forester’s CXI for a six year period ending in 2012. Each year he rebalanced the two portfolios based on Forester’s new rankings. The portfolio comprised of companies ranked in Forester’s top 10 yielded a cumulative return of 43%, compared to 14.5% for the S&P 500. The portfolio containing the bottom 10, yielded a cumulative return of negative 33.9% – it lost a third of its value.

Customer Experience Leaders Outperform the Market

Now, correlation is not causation, and there are a lot of factors at play here. But clearly the managers of firms in the portfolio of Forester’s top 10 were able to both deliver shareholder value and invest in the customer experience.

It all comes down to thinking of the customer as an asset in which to invest and realize a return.


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Customer Loyalty Is an Illusion

A colleague of mine is fond of saying there is no such thing as customer loyalty. He argues loyalty…true loyalty…loyalty through thick and thin – requires an irrational customer, one who will stay with you regardless of the outcome.

The fact of the matter is customers are rational. What we perceive as loyalty is an illusion, rather it is actually the product of an ongoing calculation each customer makes to either initiate or maintain a relationship with a provider. This is the customer value equation.

Customer Value Equation

The customer value equation is simply the ratio of the benefits of a product or service over the costs of the product or service. If this ratio is greater than 1, the customer will act as if they are loyal. If this ratio is less than 1, the customer will behave as if they are disloyal.

The numerator in this equation contains all the possible benefits associated with the product or service. These include the obvious, such as the quality of the results and the process quality. However, they also include less obvious intangible benefits. The owner of a luxury car, for example, may perceive an intangible benefit of status associated with this luxury vehicle.

The denominator contains the sum of all the costs associated with the product or service. Again, the obvious costs are price. However, there may be other acquisition costs, such as installation or maintenance. Additionally, this should include intangible costs such as potential risk of switching.

As customer experience researchers, we are constantly considering the customer value equation to provide context from which to interpret our research.

Furthermore, understanding the customer value equation gives managers a rational framework to make investments in product, positioning, price and place to best match their offering with their customers’ value equation.

How might a manager use the concept of the customer value equation to manage the customer experience?


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4 Ways to Understand & Monitor Moments of Truth

Moment of TruthEvery time a customer interacts with a provider, they learn something either positive or negative, and adjust their behavior accordingly based on what they learn.

The customer value equation is an on-going process by which the customer keeps a running total of all the benefits of a product or service (both tangible and intangible) and subtracts the sum of all the costs associated with the product or service (tangible and intangible). If the product of this equation is positive they will start or maintain a relationship with the provider.

But is this a continuous process? Or do many customers travel through the customer journey in a state of inertia until they reach critical points in the customer journey where they feed knowledge gained, at these critical points, into the customer value equation?

The fact of the matter is not all points along the customer journey are equal. In every customer journey there are specific of “moments of truth” where customers form or change their opinion of the provider, either positively or negatively, based on their experience. Moments of truth can be quite varied and occur in a skilled sales presentation, when a shop owner stays open late help dad buy the perfect gift, or when a hold time is particularly long.

In designing tools to monitor the customer experience, managers must be aware of potential moments of truth and design tools to monitor these critical points in the customer journey. Some of these tools include:

Mystery Shopping: Mystery shopping allows managers to test their service experience in a controlled manner. Do you have a concern about how your employees respond to specific customer complaints or problems? – Send in a mystery shopper with that specific problem and evaluate the response. Are you concerned about cross-sell skills? – Send in a mystery shopper with an obvious cross-sell need and evaluate how it is handled. With mystery shoppers managers can design controlled tests to evaluate how employees react when presented with specific moments of truth.

Customer Comments: Historically, comment tools have taken the form of cards; however, increasingly these tools are migrating onto online and mobile platforms. The self-administered nature of comment tools make them very poor solutions for a customer survey, as we tend to hear from an unrepresentative sample of customers who are either extremely happy or extremely unhappy.

However, this highly self-administered nature of comment tools makes them perfect to monitor moments of truth. Customers on the extreme end of either scale probably are at a moment of truth in the journey. In designing comment tools, be sure to limit the amount of categorized questions and rating scales; rather give the customer plenty of “white space” to tell you exactly what is on their mind. Over time, an analysis of these comments will give you insight into the nature and causes of moments of truth.

Social Media: Similar to collecting comments from customers, social media can be an excellent tool for identifying common causes of moments of truth. Customers who take to social media to mention a product or service are likely to be highly motivated – again, at the extreme ends of the satisfaction spectrum.

Survey Tracking: Finally, ongoing satisfaction tracking of all customers can be a source of intelligence regarding moments of truth. To turn a satisfaction tracking study into a moment of truth monitor, focus your attention on the bottom of the satisfaction curve. If a customer assigns a satisfaction rating of “1” or “2” on a 5-point scale, drill into these customers’ responses on a case by case basis to determine what caused the low rating – this will most likely reveal a moment of truth.

Here are four ideas to identify and monitor moments of truth.

How do you monitor your moments of truth?


Clink Here for Mystery Shopping Best Practices


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A Picture is Worth a Thousand Words: A Simple and Elegant Tool Determines How Customers Perceive Your Brand

The way to gain a good reputation is to endeavor to be what you desire to appear.
– Socrates

Brands have personality. Brand personality is a set of characteristics associated with the positioning, products, price and service mix offered by a company.

How would you describe your brand?

I’m often surprised how often clients are unable to answer this simple question. Even those who have a defined set of brand characteristics don’t know to what extent customers’ perceptions of the brand match the bank’s defined brand. Often what is needed is a cold hard look in the mirror to determine how they are perceived by their customers. What brand personality does our customer experience create in our customer’s minds?

As often in life, the best solutions to a given problem are in fact very simple. One simple and elegant tool is to ask customers to describe your customer experience with just one word.

A picture is worth a thousand words. When we asked a bank’s customers to describe the customer experience with one word the results produced the following word cloud:

Adjectives

With one simple question, we produced a simple and elegant depiction of how customers perceive the brand as a result of a recent experience.

This cold hard look in mirror can be painful; certainly it is tough to hear, as in the case above, that some of your customers might consider you disappointing, indifferent or pushy.  But once you determine how you are perceived, you can figure out how you want to be perceived, and begin addressing any gaps between the two.


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Call to Action: Using Gap Analysis to Put Loyalty Index into Action

For most service industries the business attribute with the highest correlation to profitability is customer loyalty. It is, therefore, very important to gather a measurement of customer loyalty. However, simply calculating a loyalty index is not enough. Estimating customer loyalty is important, and an obvious first step; however, alone – without any context – is not very useful.

What’s needed is a methodology to transition research into action, and identify clear paths to maximize return on investments in the customer experience. What managers need is a tool to help them prioritize the service behaviors on which to focus improvement efforts. One such tool is an analytical technique called Gap Analysis.

Gap Analysis compares performance of individual service attributes relative to their importance, providing a frame of reference for prioritizing which areas require attention and resources.

To perform Gap Analysis, each service attribute measured is plotted across two axes. The first axis is the performance axis. On this axis the performance of each attribute is plotted. The second axis is the importance axis. Each attribute is assigned an importance rating based on its correlation to the loyalty index. Service attributes with strong correlations to loyalty are deemed more important and service attributes with low correlations are deemed less important.

This two-axis plot creates four quadrants:

Gap Analysis Loyalty

  1. Quadrant 1: Areas with high correlations to loyalty and low performance.  These service attributes are where there is high potential of realizing return on investments in improving performance.
  2. Quadrant 2: Areas with high correlations to loyalty and high performance.  These are service attributes to maintain.
  3. Quadrant 3: Areas with low correlations to loyalty and low performance.  These are service attributes to address if resources are available.
  4. Quadrant 4: Areas with low correlations to loyalty and high performance.  These are service attributes which require no real attention as their performance exceeds their importance.

To illustrate this analysis methodology, consider the example below with the following service attributes:

Performance

Loyalty Correlation

Appearance/cleanliness of physical facilities

4.9

0.37

Appearance/cleanliness of personnel

4.8

0.42

Perform services as promised/right the first time

4.8

0.62

Perform services on time

4.9

0.54

Show interest in solving problems

4.9

0.61

Willingness to help/answer questions

4.7

0.55

Problems resolved quickly

4.4

0.56

Knowledgeable employees/job knowledge

4.6

0.41

Employees instill confidence in customer

4.7

0.52

Employee efficiency

4.7

0.58

Employee courtesy

4.9

0.56

Employee recommendations

4.8

0.53

Questioning to understand needs

4.9

0.45

Plotted on the above quadrant chart, they yield the following chart:

Gap Example

In this example, problems resolved quickly, employee efficiency, willingness to help, employees instill confidence are the four behaviors with relatively high correlations to the loyalty index and relatively low performance  As a result, improvements in these attributes will yield the highest potential for ROI in terms of improving customer loyalty.

Using gap analysis, managers now have a valuable indicator to identify service attributes to focus improvement efforts on.  Directing attention to the attributes in Quadrant I should have the highest likelihood realizing ROI in terms of the customer experience improving purchase intent.

Related Article: Using Promoter and Trust Measurements to Calculate a Customer Loyalty Index


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It’s Personal: Retail Banking Sales and Closing Behaviors That Drive Purchase Intent

There is continued discussion about the branch’s role in the future of banking.  The current consensus is it will continue to evolve from a transactional center to a sales center.  Banking is a professional service.  To avoid commoditization and selling on features other than rates and fees, a professional and effective sales process is required.

Our research into the efficacy of the branch sales process has identified several service and sales attributes that drive purchase intent.  (See the insert below for a description of the methodology).

This article focuses specifically on closing behaviors, attempting to identify best practices in terms of driving purchase intent.

In short, for closing behaviors to be effective, the banker must first demonstrate competence and sincere concern for the customer’s best interests and needs.  Closing behaviors without this predicate can be very dangerous to the sale.

What are the most common closing behaviors?

In our observational research of 100 retail banking presentations, key closing and presentation behaviors were observed in approximately two thirds of the sales presentation.

Express interest in your business or make feel valued as a customer

70%

Ask for the business or some commitment to action

70%

Discuss products in terms of benefits designed to meet needs

68%

Make comment expressing value of banking with the bank

63%

Asking for the business and making the shopper feel valued as a customer were the most common, followed closely by discussing products in terms of benefits designed to meet needs, and finally by expressing the value of banking with the bank.

Which behaviors are most effective?

To answer which of these four behaviors are most effective, let’s look at their relationship to the mystery shoppers purchase intent as a result of the sales presentation.

Closing Chart 1

Of these four behaviors, expressing interest or making the customer feel valued as a customer has the strongest relationship to purchase intent. This behavior was present 3.6 times more frequent in shops with positive purchase intent relative to those with negative purchase intent.

What drives feeling valued as a customer?

Now, let’s take a look at the most significant behavior.  What drives feeling valued as a customer?  What caused shoppers to feel valued?  To gain insight into this, Kinesis asked shoppers an open-ended question regarding how the banker expressed interest in their business.  An analysis of the responses to this question is instructive.

When these responses are grouped by theme they generally group into four themes:

Closing Chart 2

Looking at these comments with respect to whether or not the shopper reported positive purchase intent, two of these themes have a positive relationship to purchase intent: personal attention (45% for positive purchase intent compared to 0% for negative) and concern for needs (43% in shops with positive purchase intent compared to 11% for shops with negative purchase intent).

Comments with POSITIVE relationship to purchase intent.
How expressed interest/Made feel valued as customer…

Positive Purchase Intent

Negative Purchase Intent

Personal/ Full Attention/ Not Rushed

45%

0%

Sincere/ Best interests in mind/ Concern for needs

43%

11%

The other two behaviors have a negative relationship to purchase intent. One of these is both significant and instructive.

Comments with NEGATIVE relationship to purchase intent.
How expressed interest/made feel valued as customer…

Positive Purchase Intent

Negative Purchase Intent

Offer to open account/ Effort to get business

6%

61%

Informative/ Answered questions

17%

50%

A more overt effort to get the business, including opening the account, was present ten times more often in shops with negative purchase intent (61%) compared to positive purchase intent (6%).  An effort to ask for the business without appearing to have the customer’s best interests in mind or giving the customer personal attention will not drive purchase intent.  While asking for the business is an important part of any professional sales presentation, when doing so, the ground needs to be prepared by making the customer feel you have their best interests in mind.  Otherwise, the banker can seriously undermine the presentation.

As branches continue to evolve from a transactional to a sales center, it is important not to divorce service from sales.  Good sales is good service.  The sales behavior with the strongest relationship to purchase intent is expressing interest in the customer and making them feel valued.  The most effective way to make customers feel valued and interested is to provide them your full attention and sincerely demonstrate concern for the customers needs and best interests.

Visit the next article in this series.   Beyond Needs Analysis: Asking Motivation Questions to Drive Purchase Intenthttp://bit.ly/11sK9vG

 

———–

Methodology

To evaluate the state of the in-branch sales process, Kinesis mystery shopped 100 branches among five banks with significant North American footprints.  Among the objectives of the study were to:

1) Define the sales process among different institutions.

2) Evaluate the effectiveness of specific sales behaviors.

Shoppers were asked a mixture of closed-ended questions to evaluate the presence or frequency of specific behaviors, and open-ended questions to gather the qualitative impressions of these behaviors on the shoppers – in short the how and why behind what the shopper felt.  Finally, to provide a basis to evaluate the effectiveness of each sales behavior, shoppers were asked to rate their purchase intent as a result of the visit. This purchase intent rating was then used as a means of evaluating what behaviors tend to be present when positive purchase intent is reported as opposed to negative purchase intent.

 


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Beyond Needs Analysis: Asking Motivation Questions to Drive Purchase Intent

Effective profiling of customers has long been considered a key component of any sales process. Questioning customers is commonly referred to as needs analysis as many questions revolve around client needs, but how effective are needs questions in the efficacy of a sales presentation? Our research suggests the ROI potential of moving probing beyond basic needs analysis and including a different type of question – one designed to get at client motivations – not just needs.

shutterstock_130170563

To evaluate the state of the in-branch sales process, Kinesis mystery shopped 100 branches among five banks sharing national service areas. Among the objectives of the study were to:

1) Define the sales process among different institutions, and

2) Evaluate the effectiveness of specific sales behaviors.

Shoppers were asked a mixture of closed-ended questions to evaluate the presence of specific behaviors, and open-ended questions to gather the qualitative impressions of these behaviors on the shoppers – in short, the how and why behind how the shoppers felt. Finally, to provide a basis for an evaluation of the effectiveness of each sales behavior, shoppers were asked to rate their purchase  intent as a result of the visit. This purchase intent rating provides a means of evaluating what behaviors tend to be present when positive purchase intent is reported as opposed to negative purchase intent, revealing which sales behaviors have the most ROI potential in terms of driving purchase intent.

10 Most Frequent Probing Questions

In order to evaluate the profiling process, shoppers recorded what profiling questions were asked of them as part of the sales presentation.

The table on the third page of this article displays the frequency in which 29 different questions were asked as part of the sales presentation. Of the ten most frequently asked profiling questions, eight asked about the customers’ needs or
situation.

The subject matter of these eight needs/situation questions were:

– Service interested in
– Other banking relationships
– Current banking products
– Employment status/situation
– Nature of online banking use
– Nature of savings accounts held
– Nature ATM use
– Credit card use

Another of the ten most frequently asked questions asked about the purpose of the account.

The remaining question in this top ten is far more interesting. Two-thirds of the bankers asked about the customers’ expectations of a bank or what are they looking from a bank.

While we have observed that nine out of the ten most common profiling questions either ask about the purpose of the account or the customers’ needs/situation, with one question about the customers’ expectations, the question remains, what are the most effective profiling questions?

10 Most Effective Probing Questions

In addition to the frequency with which questions were asked, the table at the conclusion of this article also displays the strength of the relationship of each probing question to the presentation’s purchase intent rating. The strength of the relationship to purchase intent is expressed as the ratio of the presence of each question in presentations with positive purchase intent to those with negative purchase intent. A ratio of 2.0 means the specific question was asked twice as often in shops with positive purchase intent compared to those with negative purchase intent.

Looking at the ten probing questions with the strongest relationship to purchase intent, only four ask about customer needs/situation:

– Nature of telephone banking use
– Co-account holders
– Number of checks written
– Past banking products/services

Another three ask about balances:

– Average checking balance
– Average savings balances
– Minimum checking balance

And three more ask an importance or motivation question:

– What do you like about your bank?
– What don’t you like about your bank?
– What are your expectations from a bank?

While only one importance/motivation question is in the top 10 in terms of frequency asked, three of these questions are in the top 10 in terms of their relationship to purchase intent.

A client of mine calls these importance/motivation questions, “high-gain questions.” High-gain questions are questions designed to get to the clients’ motivations – what drives them? What do they want from a bank?

What do you like about your bank?” – was present a whopping 6.2 times more frequently in shops with positive purchase intent relative to negative purchase intent.

What are your expectations of a bank?” – was asked 3.1 times more in shops with positive purchase intent.

What don’t you like about your bank?” – was asked 2.8 times more in shops with positive purchase intent.

These and others like them are extremely powerful questions, in effect asking the customer to tell the banker what they want in a banking relationship, providing a road map for the sales presentation. In fact, our research indicates the most effective sales presentations were built around responses to these high-gain questions.

These observations suggest asking prospective customers high-gain questions to identify their motivations and building a sales presentation around customer motivations will yield a greater ROI in terms of driving purchase intent.

Question

Frequency Asked

Effectiveness*

Services are you interested in

93%

1.1

Where do you currently bank/other banking relationships

82%

1.1

Current banking products/services

73%

1.9

Your employment status/situation

68%

1.1

Purpose of the account (personal, household, business)

68%

1.6

Your expectations of a bank / What are you looking for in a bank?

67%

3.1

The nature of your online/Internet banking use

65%

1.5

Savings Accounts

65%

1.7

The nature of your ATM use

58%

1.9

Credit cards

55%

1.3

Minimum checking account balance typically carried

52%

2.8

The nature of your mobile/smart phone banking use

50%

1.6

Average checking account balance carried

50%

3.4

What don’t you like about your bank

42%

1.9

Do you like loyalty programs that offer points or awards for use of such things as credit or debit cards

42%

2.8

Past banking products/services

40%

2.7

Nature of debit card use at retailers

38%

1.8

Your family status (married, single, children, etc)

38%

1.9

Will there be any co-account holders (such as a spouse or child)

37%

7.1

What do you like about your bank

35%

6.2

Short term financial goals

33%

2.7

CDs (Certificate of Deposit)

32%

1.1

Typical savings account balance

32%

3.9

Long term financial goals (retirement, college for kids, etc)

32%

2.1

Number of checks you write

27%

3.0

Mortgages

23%

0.9

Investments other than savings, CDs or money market accounts (investments such as Mutual Funds, IRA, Stocks, Bonds).

23%

1.8

Telephone banking

22%

8.0

Car loans

18%

2.1

10 Most FREQUENTLY ASKED Probing Questions
Services are you interested in

93%

Where do you currently bank/other banking relationships

82%

Current banking products/services

73%

Your employment status/situation

68%

Purpose of the account (personal, household, business)

68%

Your expectations of a bank / What are you looking for in a bank?

67%

The nature of your online/Internet banking use

65%

Savings Accounts

65%

The nature of your ATM use

58%

Credit cards

55%

10 Most EFFECTIVE Probing Questions**
Telephone banking

8.0

Will there be any co-account holders (such as a spouse or child)

7.1

What do you like about your bank

6.2

Typical savings account balance

3.9

Average checking account balance carried

3.4

Your expectations of a bank / What are you looking for in a bank?

3.1

Number of checks you write

3.0

Minimum checking account balance typically carried

2.8

Do you like loyalty programs that offer points or awards for use of such things as credit or debit cards

2.8

Past banking products/services

2.7

* Effectiveness defined by ratio of the frequency the question is asked in shops with positive purchase intent relative to the frequency in shops with negative purchase intent (for example a value of 2.0 means the question is twice as likely to be asked in shops with positive purchase intent relative to those with negative purchase intent.

** Probing questions with the strongest relationship to purchase intent, again defined by the ratio of their frequency in shops with positive purchase intent compared to those with negative purchase intent.

For more information contact Eric Larse, co-founder of Seattle-based Kinesis, which helps companies plan and execute their customer experience strategies. Mr. Larse can be reached at elarse@kinesis-cem.com.


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Same-Branch Deposit Growth & The Customer Experience

It seems like only yesterday the branch was history. Do you remember twenty years ago when everyone predicted the death of the branch in favor of alternative delivery channels? How things have changed.

Now, the branch is seen as critical to delivering value to not only customers but shareholders as well. Now it appears branches and, more specifically, same-branch deposit growth is a key driver of shareholder value. First Manhattan Consulting Group has determined that other than return on equity and revenue-per-share growth, same-branch deposit growth is the strongest driver of total shareholder return. Furthermore, they quantify this relationship, concluding that 60% of the variance in shareholder return is explained by organic retail deposit growth. The shares of institutions with higher same-branch deposit growth tend to trade at higher multiples-to-earnings than institutions with lower same-branch deposit growth rates.

With the understanding that same-branch deposit growth is a key driver of shareholder value, Kinesis has endeavored to test and understand the relationship, if any, between the customer experience and same-branch deposit growth. We have determined that both purchase intent and same-branch deposit growth appears to be strongly associated with behaviors associated with reliability, empathy, and assurance.

To test the relationship between same-branch deposit growth, Kinesis has conducted thousands of mystery shops of a broad spectrum of institutions ranging in size from community banks with two branches to very large institutions with branch networks in the thousands. To conduct this test, Kinesis used a measurement instrument based on the five-dimensional SERVQUAL model, which defined the customer experience by the following five-dimensions: tangibles, reliability, responsiveness, empathy and competence.

The specific objectives of this analysis were to:

1) Test specific service behaviors/attributes against purchase intent to determine which behaviors, if any, appear to correlate with purchase intent.

2) Evaluate the relationship between the presence of these behaviors and branch deposit growth.

3) Test the efficacy of a mystery shop scoring system and branch deposit growth.

Kinesis first worked to test the relationship between elements of the customer experience and purchase intent, and to determine key drivers of purchase intent in the customer experience. As part of the solution to achieve this end, Kinesis asked each shopper, how the experience would have influenced their intention to purchase had they been an actual customer. Responses to this inquiry were collected on a 5-point scale ranging from “significantly increased” to “significantly decreased” the intention to purchase. Furthermore, immediately following this purchase intent rating, Kinesis asked each shopper to explain why they rated purchase intent as they did.

To help assure the validity of the analysis, two independent analysis plans were applied to the purchase intent data. First, the open-ended comments regarding why the shopper rated their purchase intent as they did were grouped according to common themes and according to the purchase intent rating. Second, the balance of the responses to the mystery shop questionnaire was cross tabulated by the purchase intent rating to determine which specific behaviors correlated most closely with purchase intent.

The results of this first part of the analysis plan revealed the following:

Once a shopper enters the branch, branch personnel clearly drive purchase intent. Over two-thirds (69%) of the reasons given for positive purchase intent are the result of branch personnel, only about one-in-five (18%) were product related, while 8% were due to the branch atmosphere.

The branch personnel driven elements include: generally positive, friendly service (26%), product knowledge/informative/confidence in the personnel (16%), attentive to needs/interest in helping/personalized service (14%), and professional/respectful/not pushy employees (10%). Prospective customers want confidence and trust not just in the bank, but also in the people who are the human face of the institution.

The second part of the analysis plan revealed very strong correlations between the following behaviors and purchase intent:

  • Friendly & Courteous
  • Greeting
  • Interest in Helping
  • Discuss Benefits & Solutions
  • Promised Services Get Done
  • Accuracy
  • Professionalism
  • Express Appreciation
  • Personalized Comment (i.e., How are you?)
  • Listen Attentively

Kinesis then grouped these highly correlated behaviors into the five-dimensional SERVQUAL model and found they group into three of the five-dimensions (reliability, empathy, and assurance) as follows:

  1. Reliability: Promised Services Get Done; and Accuracy
  2. Empathy: Interest in Helping; Discuss Benefits & Solutions; Personalized Comment (i.e., How are you?); and Listen Attentively
  3. Assurance: Friendly & Courteous; Greeting; Professionalism; and Express Appreciation

Intuitively, this result makes sense, beyond the basic requirement of reliability; customers also want to interact with bank personnel who have empathy (care about their best interest) and assurance (the knowledge and courtesy of employees and their ability to convey trust and confidence).

To evaluate the link between the customer experience, and the above behaviors, to the bottom line, Kinesis compared mystery shop results to same-branch deposit growth using publicly available deposit data from the FDIC. This analysis determined that branches with above average frequencies of reliability, empathy and assurance behaviors experienced 26% stronger three-year branch deposit growth rate than branches with low frequencies of these behaviors.

Finally, to evaluate the efficacy of the mystery shop scoring methodology, mystery shop scores were compared to branch deposit growth. This analysis revealed branches with above average mystery shop scores experienced a 78% greater branch deposit growth compared to those with below average mystery shop scores.

Our research and experience leads us to the conclusion that there is a link between the customer experience and such critical financial metrics such as same-branch deposit growth. With an understanding of which attributes drive this relationship, managers can now focus training, incentives and other management techniques on reinforcing empathy and assurance among its personnel, and make a financial case to all stakeholders (management, employees and shareholders) that the customer experience does drive financial performance.


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