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Tagged: benchmarking

Financial institutions: Are you leveraging benchmarking data?

July 12, 2017

An example of benchmarking categories

When a financial institution evaluates itself to identify opportunities for improvement, key performance standards, also known as benchmarks, are essential. Benchmarks paint a clear picture of a bank’s performance. More importantly, benchmarking sets up a long-term framework the bank can use to consistently measure its performance against key performance standards over time. This feedback, gained directly from customers, is invaluable for managers.

In 2017, benchmarking is a practice every financial institution should undertake. Key performance metrics are centered around impacting the bottom line, and improving benchmarking scores results in improved revenue. Things like overall customer satisfaction, customer evaluation of employee performance and wait times for help from call centers influence customer decisions. Happy customers are likely to open new accounts, develop more comprehensive relationships and vocally advocate for their financial institutions.

One of the most effective ways customer experience researchers and performance managers help their clients is by not only executing benchmarking programs, but by giving their financial service provider clients context around the benchmarking. Which metrics are being measured? How does customer experience vary across different channels? How does one financial institution’s performance compare to its closest competitors? The context of these answers brings benchmarking to life for managers.

Metrics

One of the ways managers learn about their overall customer experience is through a variety of metrics. Different metrics about specific performance indicators give managers perspective on their financial institution’s strengths and weaknesses. For example, a financial institution may have highly competent individuals in its call centers, but have a long wait time. As a result, customer satisfaction may be low with their call centers. Without standalone benchmarks for “call center employee performance” and “call center wait time,” managers wouldn’t have a clear understanding of why customers feel dissatisfied. A manager may falsely identify irritable employees as the issue, instead of the wait time. By having clear benchmarking obtained through feedback, financial institution managers can properly diagnose their underlying business issues.

Channel

Another source of context for managers of financial institutions to learn about their customer satisfaction is through various banking channels. Lending (consumer, mortgage, business/commercial), online, mobile, branches and call centers all offer unique challenges and opportunities. Mobile, self-service banking apps need to be optimized for a simplistic user experience. On the other hand, branch employees need wear many hats as trusted advisors, and need to be able to answer a multitude of diverse topics for customers. Benchmarking not only these different channels, but the most important elements within each channel, helps clarify financial institutions’ strengths and weaknesses. Then, leadership and financial officers can work together to decide where to best invest their time and resources to drive improvement.

Competition

One of the most valuable uses of banking for financial institutions is to reference against their competitors. This can be delineated in ways like portfolio makeup, asset size and geographic region. By gauging against competitors, financial institutions discover their own relative strengths and weaknesses. Strength areas can be promoted to customers as a competitive advantage, while weakness areas can be targets for resources and enhancement. Working with customer experience researchers and performance managers helps to assess the risks and benefits of each category strength and weakness to further specify a financial institution’s biggest opportunities.

Benchmarking offers a multitude of valuable insights financial institutions can’t afford to pass up. By developing key performance metrics and making consistent efforts to improve benchmarking scores, financial institutions can stand on firm ground knowing the resources they invest in today will enhance their revenue and business goals tomorrow.

Want better employee performance? Use benchmarks.

June 27, 2017

What should a manager do when an employee’s performance falls short? Consider the following scenario: An employee isn’t reaching his personal performance requirements. Maybe his sales are low, his ability to open new accounts is subpar or he receives weaker customer satisfaction scores than his colleagues. During a performance review, the employee is informed of his low performance, and feels pressure to improve. He worries about his job security and thinks if he simply tries harder, he’ll achieve better results. However, two weeks later, his willpower is drained and he resorts to the same ineffective behaviors.

In this scenario, the employee gets lost in a cloud of ambiguity and stress. Employees want to perform well, and when they don’t, managers need to treat the moment as an opportunity to teach, rather than to scold. Benchmarking makes this teaching moment possible.

Benchmarking is the process companies use to identify and establish key performance standards, or benchmarks, and measure their performance against those standards over time. These standards are usually achieved by quantifying performance based on customer feedback scores. Coaching employees to achieve benchmarks is highly effective for a few reasons:

Non-accusatory feedback

When a manager discusses poor performance with an employee, the conversation feels highly personal. However, the ability to look at a benchmarking score as an external performance metric helps things feel less personal, and shifts the conversation in a positive way. Rather than the manager telling the employee he’s underperforming, the manager speaks in terms of improving customer relationships through specific behaviors. The result of a non-personal conversation leaves the employee feeling supported, rather than attacked.

Clarity

Benchmarking helps managers give specific feedback and learn about their employee’s personality traits. Different personality types yield different performance strengths and weaknesses. For example, an extroverted, persuasive personality may do well to promote add-on purchases, but rub certain customers the wrong way by being too abrasive. Conversely, a perceptive and introverted personality may do well at highly analytical tasks for high-maintenance customers. Benchmarking illustrates performance strengths and weaknesses in clear terms the manager and employee can look at together. Additionally, this process gives an opportunity to talk about the employee’s highest scores. The manager learns about the behaviors which achieve stand-out scores, and the behaviors are taught across the company as a best practice.

Tangible goals

Benchmarking is done using scales, such as a numeric 1-10 scale. Seemingly small differences, like a customer giving a “7” versus an “8” in overall experience, have major implications in terms of the loyalty of the customer and the customer’s likelihood to recommend the brand to others. Therefore, employees should be encouraged with realistic and specific targets. When an employee is told he isn’t doing well enough, he might feel discouraged. A good manager offers specific strategies to employ, and encourages the individual to see if he can improve his score marginally over the next three months, maybe from a score of 7.5 to 7.8. Presented in this context, the goal feels realistic and achievable, easing the anxiety of the employee and inspiring hope that the strategies recommended by the manager will work.

Good managers should always consider the emotional impact of the feedback they give their employees, make sure their feedback is precise and give the employee a clearly defined path to success. CSP’s Manager Development and Training uses Voice of the Customer data to coach managers and employees on the specific behaviors that improve key drivers of both employees’ engagement and customers’ satisfaction.

Customer Loyalty: 9 Ways to Influence Emotions, Reasoning, and Behavior

July 19, 2016

Customer loyalty is a hot topic, but what exactly is a loyal customer? The first thing that might come to mind is “a customer who keeps doing business with you.” That sounds reasonable; however, it’s also incomplete.

It’s likely that some repeat customers come back only because they are under a binding contract, intimidated by the process of changing providers, or sticking with you from sheer force of habit. In each case, it wouldn’t take much for a competitor to lure them away. That is why customer loyalty, real loyalty, is such a critical factor in your company’s success.

A more comprehensive definition of a loyal customer is one who believes in the value of what you have to offer; who has evaluated you as the best available option; and who continues to choose your service or product over the competition and encourages others to do the same.

A more complete definition of customer loyalty

A more complete definition of customer loyalty

Within this definition are three distinct aspects of customer loyalty. Let’s take a closer look at them and what you can do to influence each type.

Emotional loyalty

The emotional aspect is crucial in the relationship between customer and company, and a powerful driver of the other two types of loyalty. Customers not only want to feel like they can trust your company; ideally, they also like your company. Other important emotional values include friendliness, attitude, and “cool factor.” A value proposition that is associated with these sentiments will be much more likely to invoke loyalty.

Emotional loyalty is especially important in fields where big financial interests and sensitive data meet personal experiences, like the banking industry. Events like the financial crisis, market instability, and bank account hacks can damage customer loyalty, and (re)building trust is key. To maximize emotional loyalty:

  • Be transparent in your communication with customers.
  • Make customer service a top priority throughout the organization.
  • Show customizers that you care through your marketing and advertising messages.
Rational loyalty

This aspect of customer loyalty reflects the logical, unemotional side of the customer’s purchase decision. In other words: do your customers think they are getting the best deal? To maximize rational loyalty:

  • Reward repeat customers.
  • During the sale, clearly outline the tangible benefits you can offer.
  • Offer attractive extras, like credit cards that earn points, flyer miles or cash-back rewards.
Transactional/behavioral loyalty

Finally, transactional or behavioral loyalty can be seen as momentum. Once a customer starts buying from a particular business or becomes attached to a brand, as long as emotional and rational loyalty are each well-nurtured, transactional loyalty follows and becomes habitual. Because this type of loyalty is so heavily reliant on the other two, it can be derailed if a customer becomes dissatisfied emotionally or rationally.

To optimize the shopping process itself:

  • Make sure all service channels, including websites and apps, are easy to use and up to date.
  • Various service channels should be connected; customers should be able to shop however, whenever and wherever.
  • Offer extras that make shopping fun, like gamification elements or apps that reward customer engagement.

 

Building customer loyalty can seem like a complicated process. Understanding it, however, starts with a simple step: knowing your customer. Voice of the Customer data is where you’ll discover the key components that drive your customers’ loyalty – and what might be driving them away. Equipped with that knowledge, you can make specific changes within your organization to influence those key drivers in the desired direction. You’ll also want to use periodic benchmarking to evaluate how you are performing against those measurements compared to your competitors.

For more information about Voice of the Customer and Competitive Benchmarking solutions from CSP, contact us online or call 800.841.7954 ext. 101.