Competitive World John Berry Who is John Berry? Former CEO UK - - PowerPoint PPT Presentation

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

• f 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 place!

• 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!

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 5th largest country if it was one!) No1 broadband penetration is; Bermuda (USA 19th/ Japan 22nd) Netfix – 266 hours watched per 60 seconds

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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 1st 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)

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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!!

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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 - ??? ?????

• 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

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• 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

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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

• EXISTING CUSTOMERS MATTER
• KNOWING HOW THEY FEEL ABOUT YOUR COMPANY IS ESSSENTIAL
• EMOTIONS DRIVE DECISIONS MORE THAN RATIONAL THINKING
• ADVOCACY DRIVES RESULTS

Does delivering “experience” deliver improved 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

Does “experience” deliver results?

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 9 10 7 8 NPS Score = % - % 78 12 30

65% – 25% = NPS +40

Passive Detractors Promoters (65%) (25%) 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

Source: Tailoring the data driven customer experience, Efma-EY, 2017

Engaging your customers

The need for multiple touchpoints

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.

Personalizing the customer experience

Tips in Sberbank Online case study

Poland

• Idea bank used the potential of train and created a

comfortable co-working zone which combines variety of functions and provides a comfortable place to work while in transit.

• The Idea Hub Express is an unprecedented solution on

the global scale. It is not only the first mobile office, but also the first bank branch on tracks. This project is one

• f a kind in the world.
• Thanks to many publications in business media in

Poland and abroad Idea Hub Express has become well known project locally & internationally. The project has also gained interest among international business, banking and fin-tech media.

Catching customers where they are

Idea Hub Express branch & co-working space on tracks

This innovation won the Efma-Accenture Phygital Distribution Gold Innovation Award 2017

Experience leaders?

• Apple (made IT interesting – no sales targets!)
• USAA (US bank and company with highest customer advocacy)
• Svenska Handelsbanken (best bank in eyes of their customers – they have no sales

targets!)

• Federal Express(reshaped parcel delivery standards)
• John Lewis (UK’s leading retail service provider)
• Disney (experience differentiates them)

What makes them leaders?

• Obsessive about their customers
• Customer experience central to meeting business goals
• Company strategy aligned with identified customer needs
• Management share knowledge and understanding of customer needs
• Common goals across the entire business
• Drive to excel in “experience delivery” supported from the top

The world is changing! Marketing 4P’s are now 4E’s!

• How does your business “listen” to the front line?
• How does your business’s leadership build trust and understanding

with staff?

• How well do you know the people who are your brand in the eyes of

customers?

• How do you measure staff “engagement”?

Barriers to greater success?

• What do you consider the barriers within NBB

to delivering increases in business?

What action is required?

• What changes can you make?
• Can you influence others?
• Are you a leader – if so how will you encourage others

to change

Creating that WOW factor......

“Customers may forget what you said but they will never forget how you made them feel”