Delivering Success in a Competitive World John Berry
Who is John Berry? • Former CEO UK Retail Bank (15m customers/800 branches) • Roles included Sales Director/Marketing Director/European Director/Transformation Director • International recognition for customer innovation (Costa Coffee / Branch Franchising ) • Now runs global training/consultancy/project business (www.customerbuyology.com) • Runs unique “customer experience tours” (physical and digital) • Senior Advisor: Efma and EY
Consumer banking today ………… Harvard communication research showed: What we say is not always “heard” or remembered of 100% of what you ask someone to say… - … only 80% actually gets delivered…. - ….and only 60% is heard
Knowledge retention poor!………. • After 3 hours:……………………………. • -40% recalled! • After 3 days:……………………………... • -only 15% recalled!
However…………. BUT with the power of pictures (and your notes) After 3 hours 40% becomes 80% After 3 days 15% becomes 60% Pictures tell a thousand words
What does success/ competitive world mean? Brand Image? Customer view? Competitive position? Bank view? Service delivery? Products/ Processes? Numbers?
What does success/ competitive world mean? Brand Image? Customer view? Competitive position? Bank view? Service delivery? Products/ Processes? Numbers?
1.What do you see as the strengths of your brand today? 2.Who do you see as your major competitors? 3.How would you rate NBB for process/service delivery? 4.How do you measure success?
Draw a symbol for money
Likely drawings
What do you think customers might draw?
What customers tend to draw
What customers want • Convenience/ accessibility • Ease of use • Transparency • Solutions • Growth • Knowledgeable/ enthusiastic staff that listen • A positive “experience”
You can make customers’ dreams come true
Today many banks are not in a strong plac e ! • Banks speak a different language (products not experiences) • No one “wants” to go to the bank (not a destination) • Customers think all banks are broadly the same (commodity pricing/locations/opening hours/processes) • Rules and regulations drive culture
Todays Challenges for Retail Banks • Changing Customer Demands • Technology changes (drive to digital) • Distribution Challenges (branch or branchless) • Increased Competition – existing and new players • Margin pressures • Regulatory challenges • Cost/ efficiency challenges • PACE of CHANGE
The Challenges The pace of change is frightening Industries such as music/ cameras/ booksellers/ flights and transport are changing rapidly Are you ready for the new competition? 4.3m YouTube videos per minute!
Challe llenges 1 in 8 couples who married in the US last year met on-line! (divorce rate lower in this group) Over 1bn websites The worlds biggest retail Walmart offers 10 million items on-line BUT Amazon offers 200 million! 200 million registered users of MySpace (it would be the 5 th largest country if it was one!) No1 broadband penetration is; Bermuda (USA 19 th / Japan 22 nd ) Netfix – 266 hours watched per 60 seconds
Challe llenges 3.7m searches each 60 seconds on Google (only 2.7m per month 5 years ago!). Who did they ask before?? Facebook (973k logins per minute) 250m active Twitter users: 200m tweets per day 1 st text in December 1992 – today daily numbers exceed world population!(18m per 60 seconds) 6bn mobile phone users 38years to get 50m radio users – TV:13yrs/ Internet:4yrs/ Ipod:3 yrs/ Facebook: 1 year/ 43 days Angry Birds(300mdownloads@99cents)
Challe llenges In the time you viewed these slides: 67 babies were born in the US 274 ..........................in China 395 ..........................in India And 700,000 songs were illegally downloaded!!
CHANGE Adaptive dynamics: “The introduction of a new species into what was previously a stable ecosystem can lead to drastic change – new entrants can disrupt or cause the extinction of native species” Taxis/ Uber Hotels/Airbnb Banks/open banking and/or FAMGA?
Future Competitors? Uber (largest taxi company ) – no vehicles Facebook (largest media co) – no content Alibaba (largest retailer) – no inventory Netflix (largest movie house) – no cinemas Airbnb (largest room provider) – no properties Amazon (largest book seller) – no bookshelves Ban anks s - ??? ?????
Challe llenges • Changing customer demands • New competition changing expectations • Speed/ adoption of new technologies • Opening banking • New empowered generation with different demands • Innovation essential – business as usual not an option
Challe llenges • New people capabilities required in a digital/ analytical age • Margins under pressure/ new income streams required • Need to move from “stalker” to “butler” approach • Customers need banking not banks • Data security concerns
What is “experience”? It is about how customers “feel” after they have undertaken a transaction, an interview, a telephone call or a product purchase through one of your distribution channels. Emotions are more important than rational thinking when difficult decisions are made.
Does “experience” deliver results? • 5% REDUCTION IN CUSTOMER DEFECTION EQUAL TO POTENTIAL 20%+ PROFIT IMPROVEMENT (Bain & Co) • CUSTOMER COST OF NEW V. EXISTING (RETENTION) X 6 > X15 (Bain & Co) • 68% PEOPLE LEAVE DUE TO SERVICE FAILURE • 96% UNHAPPY CUSTOMERS DON’T COMPLAIN BUT 91% LEAVE
Does delivering “experience” deliver improved results? • EXISTING CUSTOMERS MATTER • KNOWING HOW THEY FEEL ABOUT YOUR COMPANY IS ESSSENTIAL • EMOTIONS DRIVE DECISIONS MORE THAN RATIONAL THINKING • ADVOCACY DRIVES RESULTS
Does “experience” deliver results? • CUSTOMER X 4 MORE LIKELY TO DEFECT TO COMPETITOR ON SERVICE RATHER THAN PRICE • 2% RETENTION UPLIFT SAME AS 10% COST REDUCTION • PROBABILITY OF ADDITIONAL SALE TO EXISTING CUSTOMER 60%/70% - ONLY 5%/10% NEW CUSTOMER
Customers prefer to “buy” rather than be “sold to” Customers expect a positive experience to advocate your business Advertising may build a brand BUT Reality builds ADVOCACY
Differentiation Easy to copy PRODUCTS/PRICING PEOPLE – where the answer lies........ In the EXPERIENCE customers receive
NPS “How likely are you, based upon your experience, to recommend your business to a friend or colleague on a scale of 1 to 10? 1 – 6 DETRACTORS 7 – 8 PASSIVE 9 – 10 PROMOTORS
Net Promoter Score e.g. 120 ‘Surveys’ 1 2 3 4 5 6 7 8 9 10 Detractors Passive Promoters 30 12 78 (25%) (65%) 65% – 25% = NPS +40 NPS Score = % - % Range = -100 to +100
What should you do? • Understand customer needs better-ethnography • Convert insights into learning and cultural change • Remove “barriers to purchase/usage” • Sell experiences not products • Create a “buying experience” – stop selling! • Change reward/ measurement systems – you get what you pay for! • Treat “as if your business” – small business culture • Create loyalty culture through recruitment, training, coaching and rewarding
• Be agile – respond to trends (biometrics/robotics/ predictive analytics) • Behavioural research/ ethnographic approach • Focus on simplification to drive customer engagement/ interaction improvements • Rethink reward/ measurement systems – focus on customer engagement/customer education and customer experience • Share of wallet v. market share
People • Staff are the core to successful delivery • Leadership skills/ behavioural requirements • Competency requirements • Recruitment / training innovations • Empowerment – alternative models • Performance management • Creating a great place to work
Understanding the complexity of your customer Digitally savvy vs. financial maturity Source: Tailoring the data driven customer experience , Efma-EY, 2017
Engaging your customers The need for multiple touchpoints Source: Tailoring the data driven customer experience , Efma-EY, 2017
Personalizing the customer experience Tips in Sberbank Online case study Russian Federation • Tips creates unique value by combining financial data, machine learning and personalised recommendations about money and everyday life • In February 2017, Tips became available to 20 million active users of Sberbank Online. Currently the service is used by around 200,000 users daily. • There are 50 tips available now, in a month there will be 100 , and this number will continue to grow.
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