Unlocking customer advocacy in retail banking
IBM Global Business Services
Customer Relationship Management
The customer focused enterprise
1
Unlocking customer advocacy in retail banking
IntroductionWe consistently hear banks touting their
commitment to being customer friendly and
going the extra mile for their customers.
Accordingly, branches are once again in
vogue, and executives have declared that
improving the customer experience is the
priority for the organization. As mergers and
acquisitions become less attractive, leading
financial institutions look increasingly to their
existing customer base for growth. Critical
organic growth measures – cross-sell, retention
and new customer acquisition – dominate
nearly every retail bank’s agenda. However,
many banks have yet to identify the right
mix of customers, marketing and sales
programs, employee incentives, and process
and technology improvements to produce
higher returns. Despite significant investment,
the largest banks are not well positioned
for organic growth: our research shows the
majority of customers will be reluctant to
commit to a deeper relationship as a conse-
quence of their prior cumulative experience
with the bank.
In order for banks to fully achieve the benefits
from organic growth, bank executives need
to understand customer attitude and its
impact on customer behavior. Customers who
have a positive attitude toward the bank are
advocates, while those whose experiences
shape negative opinions become antagonists.
As such, a bank’s ability to effectively manage
and influence customer attitude becomes
paramount to achieving organic growth.
The customer focused enterprise
If banks are not aware of customers’ attitudes toward their organizations
– and the impact these perceptions have on financial performance – they
may be counting on organic growth that simply will not materialize.
But by identifying which customers are advocates, apathetics and
antagonists, banks can more precisely target customer experience
improvement initiatives based on a more informed understanding of
customer preferences and future value. To boost the bottom line, we
believe banks must increase focus on customer attitude.
Unlocking customer advocacy in retail banking
2 IBM Global Business Services
In this study, we establish the link between
advocacy and higher profitability, respon-
siveness and trust and explore three critical
questions:
• Are banks fully positioned to grow organi-
cally?
• Can a focus on improving advocacy unlock
growth potential?
• How can banks capture the opportunity?
Identifying bank customers who can be
converted into advocates must be a tenet of
any customer focused organic growth strategy.
To move customers into advocate-level rela-
tionships, the customer experience must be
well understood, continuously monitored and
proactively managed. We believe that banks
that effectively improve operations to align with
the desired customer experience can create a
new and sustainable competitive advantage.
2 IBM Global Business Services
About the research
The goal of this study was to understand customers’ perceptions of their primary bank’s
performance based on their ranking of key attributes of what we’re calling the customer focused
enterprise (CFE). North American banks were classified into four tiers based on asset level: National,
Regional, Community and Credit Unions.
This quantitative research builds on the IBM customer focused enterprise study completed in
April 2006.1 Over 3000 US banking consumers were surveyed via telephone and the Internet. The
questionnaire consisted of 25 questions about interviewees’ perception of CFE operational character-
istics as they pertained to their primary bank, as well as their purchase intentions and some general
financial services profiling questions.
Customers were classified into advocacy segments based on their answers to three questions: those
who would recommend their bank, would go to their bank first for a new financial services need and
would not switch if offered a competitive product. Advocates, the top tier, have a high likelihood to
recommend, high purchase intent and low switching intent; Apathetics comprise the middle tier, and
antagonistic customers are the lowest tier.
To measure customers’ perception of bank performance, we asked customers to rate their
primary bank on a number of rational and emotive CFE attributes. The rational attributes evaluated
customers’ perception of their physical interactions with the bank and included statements such
as, my bank corrects errors when they occur, my bank uses the information it already has received
from me rather than asking for me to provide it repeatedly, my bank gives me plenty of ways to
bank with them, including in person, on the phone or online. The emotive statements sought to
understand how customers felt toward their bank, and included statements such as: my bank values
my business, my bank understands my financial goals, my bank weighs both sides of the issue when
I have a problem and resolves it fairly.
Workshops were held with a team of senior IBM Financial Services and CRM consultants along
with statistical analysts to review the research findings and develop recommendations for banking
operations.
This study is a continuation of the IBM “CRM Done Right” series, following 2004’s “CRM done right:
Executive handbook for realizing the value of CRM” and the 2006 executive handbook, “Advocacy in
the customer focused enterprise.” 2
3 Unlocking customer advocacy in retail banking
Are banks fully positioned to grow organically?
Traditional competitive levers are nearing exhaustion
Merger and acquisition activity among the
largest players has reached regulatory and
operational limitations. In the U.S. market,
Bank of America’s acquisition of Fleet
Financial puts the bank near the govern-
ment’s limitation that no bank may hold
more than 10 percent of total outstanding
deposits – forcing the bank to look into loan
portfolios domestically (its acquisition of
MBNA is a prime example) and internation-
ally (i.e., its investment in China Construction
Bank) for net new acquisitions.3 Other banks
have reached operational limitations on their
growth trajectory, leading banks to explore
other growth levers such as new product
development and new distribution channels/
partners.
However, with the exception of minor
changes to pricing and terms, little has
changed in the landscape of financial
solutions available to customers. The
majority of product “features” present in
checking, savings, credit and loan products
when they were introduced decades ago
are largely still intact today. Additionally,
banks have sought to derive new sources
of revenue from existing products by
establishing what have become known by
consumers as “nuisance fees.” However,
customers have become sensitive to these
fees; our study showed that 47 percent of
customers agreed that their bank’s fees are
too high. The increase in fees, coupled with
little new product innovation, has affected
customers’ perceptions of banks.
“They just keep adding and adding (fees)
and giving nothing in return”
– Bank customer, IBM survey
The impact of fee income is compounded
by the fact that banks are facing pressure
from wealth management and brokerage
firms that have introduced cash manage-
ment products to attract consumers seeking
a greater breadth of financial services. With
demographic shifts in the United States,
most notably the increase in baby boomer
retirement, the threat of assets walking out
the back door is reality today.
Finally, cost containment efforts made in
the “name of the customer” have had little
impact on differentiating the customer
experience. Many banks have dramati-
cally improved operating efficiency, but lost
connections with their customers. Banks
continue to invest in call center consolida-
tions, channel integration and customer
service improvements, but we see little
improvement in customers’ attitudes and
perceptions of service capabilities. In fact,
other studies indicate that large banks’
customer satisfaction rates are 15 percent
below the scores of other leading companies.4
Unlocking customer advocacy in retail bankingThe customer focused enterprise
Growth through M&A
has legal and practical
limits, but organic
growth is proving just
as challenging.
4 IBM Global Business Services
An outside perspective
By Susan Fournier, Associate Professor, Marketing, Boston University School of Management
This research is a must read for anyone that is serious about becoming a “customer focused” firm. It deals
with a timely metric (advocacy, supposedly “the one number that matters”) in a powerful marketing paradigm
(relationship marketing and CRM) and explores this within a customer-facing service industry (retail banking)
that faces significant imperatives for organic growth.
IBM’s study fine-tunes and advances our understanding of the real content and process issues that are at play
in the pursuit of strong customer relationships. It sensitizes us to the emotional and experiential elements that
truly drive the quality of customer relationships, but on which most firms do not perform. The research refines
our understanding of “advocacy” and the attitudes and behaviors that comprise it. There is much added value
in IBM’s three-part advocacy model: wherein advocates are those not only willing to recommend the brand to
others, but who also stick with the brand in the face of competition, and consider cross-selling opportunities to
boot. Companies can get greater predictive and diagnostic power from this more complex attitude-plus-behavior
metric and the segmentation schemes that derive from it. All of this is guaranteed to improve the relationship
strategies and executions that retail banks develop for their brands.
Perhaps most importantly, IBM’s research makes us ponder a very perplexing conundrum: how could so many
banking service providers re-brand, re-engineer, strategize and act in the service of enhancing consumers’
relationships … and yet get it so very, very wrong? The results are striking: nearly 50 percent of customers of
national banks have antagonistic relationships with their banks. Let me repeat: one out of every two customers
harbors an adversarial relationship with their retail banking brand! These customers are not simply disinter-
ested in developing deeper relationships with their banks. They are not simply non-responsive to the outreach
and relationship-expanding efforts of the firm. These consumers harbor very deep and strong negative feelings
toward their banks; they essentially find fault in everything that bank might do. These current customers see
their banks as opportunistic, self-interested parties looking only out for themselves. And this despite service
experience initiatives, CRM systems, and relationship programs intended to strengthen partnerships between
customers and the brand.
I for one am looking forward to future extensions of this research into other industries and settings. I am
particularly excited by the prospect of moving beyond our fixation with leveraging advocates on the positive
side of the relationship continuum and learning to deal effectively with the “disengaged” and “antagonists” that
this research identifies as significant customer segments for the firm. Current wisdom suggests we fire “high-
cost-to-serve” customers such as these. But with upwards of 70 percent of your customer base in these two
segments, this hardly seems a viable alternative for the firm.
5 Unlocking customer advocacy in retail banking
Becoming a customer focused enterprise
Banks continue to explore how to create more
meaningful customer experiences to enhance
their customers’ opinions of their bank.
However, for banks, creating both mean-
ingful and profitable customer experiences
is a significant challenge, particularly given
the typical volume of customer interactions.
Based on the IBM study completed earlier
this year, “Advocacy in the customer focused
enterprise: The next generation of CRM Done
Right,” a new approach has been developed
for delivering customer experiences – one
that enhances customers’ perceptions and
builds a competitively superior experience,
while prioritizing resources and invest-
ments.5
IBM calls companies that excel in
the customer experience arena “customer
focused enterprises” (see Figure 1).
This framework – in combination with
advocacy scores discussed in the following
paragraph – is critical in structuring customer
relationship management improvements.
Unlocking customer advocacy: The IBM Customer Focused Insight Quotient (CFiq)TM
A commitment to the customer experience is
the foundation of an effective organic growth
strategy. To move from a customer strategy
focused on efficiency to one that creates
an effective, mutually beneficial relationship
between bank and customer, we believe
bank executives need to adopt a new view of
customer attitude. Traditional customer satis-
faction measures result in a historical view of
customer attitude and are not credible sources
for making decisions on the potential for
customers to create value in the future.
FIGURE 1.
The six characteristics of a customer focused enterprise.
Source: IBM Global Business Services.
Solution experience
Human performance
Customer focused
organization
Integrated execution
Customer dialog
Customer authority
Companies who understand customer authority are able to approach their customers in ways that build advocacy through understanding their customers’ perspectives, while simultaneously linking the value of the customer to the enterprise.
Customer dialog is a business’ ability to communicate and transact with customers intelligently and responsively during each interaction on a customer-by-customer basis.
Integrated execution allows companies to integrate channels to support a consistent experience, and allow intelligent, cross-channel execution of customer interactions.
Solution experience is about understanding the impact that products and services have on the overall customer experience. By solution, we refer to products and services that address broader customer needs and desires.
Customer focused companies commit to a human performance approach to growing and sustaining employee commitment that allows employees to better meet personal and organizational objectives, all while better serving the customer and being a stronger customer advocate.
Customer focused companies should transform the organization so that functional groups and lines of business collaborate to fulfill customer-centric strategies and initiatives.
Most customer
satisfaction measures
look back; customer
attitude measures like
CFiq look forward.
6 IBM Global Business Services
Our study tests different attitudinal state-
ments in an effort to identify which attributes
contribute to positive customer behavior
patterns. Accordingly, through statistical
regression analysis techniques, we derived
a combined measure that captures key
indicators of customer relationship health:
customers’ likelihood to recommend, their
intent to purchase and their willingness to
stick with the bank even when confronted with
competitive offers. Termed the IBM Customer
Focused Insight Quotient (CFiq), this measure
captures and integrates these attributes
by asking customers to state their level of
agreement with three simple statements:
• I would recommend my bank to friends and
family
• I would go to my bank first for future
financial services needs
• I would stick with my bank if offered a
competitively priced product.
The CFiq results are eye-opening – according
to this measure, only 24 percent of U.S.
banking consumers are advocates of their
bank (see Figure 2).
What’s more telling is that the smaller
players, such as credit unions and
community banks, have a higher propor-
tion of advocates than the national and
regional banks when segmented by CFiq
scores. Thirty-six percent of all credit union
customers and 30 percent of community
bank customers are advocates of their
bank – 50 percent higher than customers
of regional and national banks (23 and 22
percent, respectively).
While most banks are looking to organic
levers as the primary mechanisms for
growth, the largest banks – by our estimates
– are disadvantaged in achieving sustained
organic growth, despite advances in
customer management capabilities.
FIGURE 2.
Banks are disadvantaged in achieving organic growth.
n=1615 customers Source: IBM Customer Focused Enterprise Retail Banking Study 2006.
Advocates = customers who would:1. Recommend their bank to others 2. Look to their bank for future financial services products 3. Stay with their bank if offered competitive products
Less than one quarter of all U.S. bank customers are “advocates” of their bank...
24% Advocates
76% All others
...the largest national players face the most difficult organic growth challenge related to advocacy
Credit Unions
Community Regional
36%
30%
23% 22%
National
Percent of customer base who are advocates by bank segment
Percent of all U.S. bank customers who are advocates
7 Unlocking customer advocacy in retail banking
For example, consider a bank with 1 million
retail customers, each of which holds
two products. If we assume the income
generated by each product is US$250
per year, the bank currently produces
US$500 million in income. Without a view
of customer advocacy, bank executives
may believe they can increase the overall
products per customer of their base by 15
percent over the next few years. Applied to
a base of 1 million customers, that would
net additional income of US$75 million
annually and result in 2.3 products held per
customer. Using the CFiq to segment this
group, we find that, in reality, only 24 percent
of the bank’s customers are advocates, 39
percent are apathetics and 37 percent are
antagonists. Conservatively, let us assume
that advocates can be convinced to hold
2.5 products, apathetics 2.2 products, and
antagonists reduce their holdings to 1.9
products. The resulting impact on income
from the same 1 million customers, with a
view of advocacy, is only US$35 million,
or less than half of the original estimate.
Extrapolating this number to large banks
with 10 million customers would net a
potential US$400 million in erroneous
annual income assumptions.
Therefore, as banks continue to explore
traditional organic growth levers, the
business case for growth initiatives should
include a realistic view of the potential
economic value (modified by the CFiq)
attainable by moving those levers on a
bank-by-bank basis.
Can a focus on improving advocacy unlock growth potential?
The possibilities are tremendous
Although the challenge appears daunting,
with an understanding of the critical drivers
of customer attitude and the economic
potential associated with improving those
factors, banks can begin to position the orga-
nization to realize organic growth potential.
Our study shows that advocates, on
average, hold 14 percent more products
than antagonistic customers, and the profit-
ability of products held by advocates is 21
percent higher (see Figure 3).
FIGURE 3.
Banks have the potential to unlock significant value by proactively growing their share of advocates.
n=1615 customers Source: IBM Customer Focused Enterprise Retail Banking Study 2006.
Financial impact
Antagonists Advocates
1.90
2.17
Products per customer
3%
52%
17%
83%
73.1
88.3
Profitability of products held (index)
21%+
Responsiveness to offers
5x
Trust their bank
17x
14%+
Antagonists Antagonists Antagonists AdvocatesAdvocatesAdvocates
Underlying contributors
8 IBM Global Business Services
The factors that contribute to this economic
value are also interesting. Customers who are
advocates of their bank are five times as likely
to be responsive to offers and communica-
tions, and over 17 times as likely to trust their
bank. Further, application of the CFiq shows
that only 26 percent of advocates believe that
their bank’s fees are too high, as compared
with a whopping 80 percent of antagonists.
Indeed, as banks look to drive organic growth,
determining how to move customers to a state
of advocacy should be paramount for banking
executives.
Although community banks and credit unions
significantly outperform larger banks in terms
of proportion of advocates, the profile of the
advocates of both small and large banks
is similar. Advocates respond positively to
questions about their experience with the
bank (e.g., seeks my input to develop new
products and services, creates customized
offers), whether they bank with community
banks or national banks. So, as banks
assess the best way to grow organically,
understanding what motivates and drives
behavior among different advocacy levels,
and then executing the right set of strategies
to increase advocacy, will likely prove a viable
avenue for achieving growth.
Leading banks often use different approaches
for achieving customer advocacy. One national
bank, building off of a loyal customer base and
unencumbered by mergers and acquisitions,
has leveraged its commitment to people and
integration of the brand promise throughout
customer touch points. Another bank, that has
been through many mergers and acquisitions,
has recently recommitted itself to the customer
through a focus on improving processes that
support customer interaction. This bank has
incorporated the goal of increasing customer
satisfaction into its branding, advertising and
customer communications.
Don’t put all of your eggs in one basket
According to our research, focusing only
on expanding the pie of advocates yields
suboptimal results. When we evaluated the
national banks (which included Bank of
America, Citibank, JPMorganChase, Wachovia,
Washington Mutual and Wells Fargo), we found
that 42 percent of the surveyed customers
of the largest banks are antagonists. Thus,
understanding and managing the economics
of antagonistic customers could yield faster
profit growth because it helps enhance
revenues and reduce costs. A poor customer
experience – a primary trigger that develops
antagonists – not only creates negative
impressions with customers, it is often more
costly to deliver. Poor experiences result when
a customer needs to contact the bank multiple
times to resolve an issue, or when a process
that is supposed to tie together different
areas within the bank is broken. Fixing broken
processes and understanding how to better
resolve customer issues can directly impact
the bank’s cost to serve and build a platform
for winning customer advocacy.
A significant opportunity
According to our research, the three factors
most highly correlated with advocacy are
emotive drivers of the customer relationship:
1. The bank has an understanding of my
financial goals
2. The bank values my business
3. Employees provide advice to improve my
financial well being.
Customers who are advocates of their bank
score these items higher than all other
factors. The news on how banks performed
on these attributes, however, is not positive.
In total, customers give their banks credit for
delivering on the rational factors 52 percent
of the time, but only agree their banks deliver
on the emotive drivers 26 percent of the time
– a 74 percent improvement opportunity (see
Figure 4).
Understanding the
economics associated
with different advocacy
levels can help banks
identify the most effective
growth initiatives.
9 Unlocking customer advocacy in retail banking
This gap in emotive delivery is indicative of
where past investments have focused. As
banks have invested in improving the effi-
ciency of front- and back-office operations,
customers have seen the impact in the bank’s
ability to better serve their needs across
channels, capture and manage information
and deliver consistent answers to routine
inquiries. However, factors that contribute
to building meaningful relationships have
been less of a focus, resulting in the current
gap. Going forward, bank executives should
consider how improvements on the effec-
tiveness side of the equation can yield net
increases in the depth of individual relation-
ships. For example, they should explore how
to increase dialog with their customers and
provide more meaningful financial advice.
A polarizing effect
As banks evaluate ways to better manage their
customer base, executives should consider the
differences in profile between advocate and
antagonistic customers. While we did not find
demonstrable differences in the demographic
profile of consumers who were advocates
versus antagonists (i.e., antagonists are just
as likely to be high net worth customers as
advocates are), we did find significant differ-
ences in how each group felt about the bank.
While the gaps related to individual drivers are
significant, we found even greater contrast in
aggregate (see Figure 5). Advocates of banks
gave their bank credit for doing “everything
right,” while antagonists found fault in almost
everything their bank did. It is clear that
FIGURE 4.
Banks leave money on the table by not focusing on customer needs – a 74 percent improvement opportunity.
Percent agree (weighted index)
Rational attributes (efficient)
Provides plenty of ways to bank 72%
Corrects errors when they occur 47%
Uses information already received 47%
Consistent level of knowledge 42%
Values my business 38%
Employees listen and follow-up 36%
Resolves fairly 32%
Understands my financial goals 28%
Relevant offers 26%
Employees provide advice 22%
Seeks my input 13%
Creates custom products 12%
Percent agree (weighted index)
Emotive attributes (effective)
Banks under delivered on emotive versus rational expectations by a 2:1 margin
52%
26%
Average rating
Average rating
n=1615 customers Source: IBM Customer Focused Enterprise Retail Banking Study 2006.
10 IBM Global Business Services
customers who take on an advocate posture
are attune to the actions of their bank and
are open, willing and positive toward interac-
tions. Whereas, antagonists are shut off from
communications and don’t give their bank
credit for even fundamental attributes of a
bank’s delivery system (such as providing
plenty of ways to bank with them).
“I am tired of being spammed and junk
mailed”, “I don’t know anything different about
my bank since I started banking there”
– Antagonist quotes from IBM study
“They respect me as much as I trust them”,
“They have been fair with all my banking”,
“They know me personally”
– Advocate quotes from IBM study
When building communications strategies
and evaluating operational improvements,
bank executives must consider customer
attitude profiles and their impact on the
strategy. For example, consider a company
that seeks to improve the service it provides
customers through its contact center. By
recognizing that a portion of customers are
already antagonistic, a bank may choose
to create processes and training to help
contact center employees deal with antago-
nistic customers. In addition, as banks begin
to understand the triggers of advocacy
and antagonism in specific environments,
management will be able to build mecha-
nisms to predict when customers are likely
to move toward an advocate relationship
as well as identify and proactively address
service failures.
How can banks capture the opportunity?In order to increase your share of advocacy
and increase the odds that your bank will
be successful at growing organically, you’ll
need to act decisively:
1. Adopt a transformative mindset
2. Apply an outside-in perspective
3. Break traditional design constraints.
FIGURE 5.
Banks rarely account for the extreme gap in attitude of their customer base.
AdvocatesPercent who agree
5% Bank values my business 73%
12% Employees listen and follow-up 69%
16% Provides consistent knowledge across interactions 73%
11% Resolves issues fairly 64%
23% Proactively corrects errors 75%
41% Provides me with plenty of ways to bank 90%
6% Provides relevant offers 52%
29% Bank uses the information it already received 68%
16% Bank understands my financial goals 53%
AntagonistsPercent who agree
Larger gap
Find fault with “everything” their
bank does
Smaller gap
Give the bank credit for doing “everything” right
n=1615 customers Source: IBM Customer Focused Enterprise Retail Banking Study 2006.
Banks need strategies
that take into
consideration the
polarized attitudes – and
behaviors – of advocates
and antagonists.
11 Unlocking customer advocacy in retail banking
“When you create your own destiny, you
prevent others from doing it for you.”
– Anonymous
Shift mindset
The foremost consideration executives
need to accept is that improving customer
attitude must start at the top. A mindset
shift is required, beginning with executive
management. Companies that are successful
at building long-lasting relationships with
customers typically have charismatic leaders
who inspire ongoing innovation and passion
for the customer. Consider some extreme
examples: Howard Shultz at Starbucks,
Richard Branson at Virgin or Steve Jobs at
Apple. Each of these leaders developed a
passionate brand, and motivated their teams
to live the brand though every customer inter-
action. Most organizations do not need a Steve
Jobs or a Richard Branson to be successful,
but, indeed, need to capture the essence of
these leaders’ commitment and approach to
inspire change.
More specifically, we believe banks need to
adopt a transformative mindset in the following
areas:
• Metrics: Move from customer and
employee satisfaction to recommendation,
purchase and switching as the measures of
customer attitude.
• Focus: Move from affecting only the rational
drivers of customer behavior, to addressing
both the rational and emotive drivers of
behavior.
• Brand: Move the brand promise from purely
marketing communications to a tangible
attribute delivered as part of the customer
experience.
• Lifecycle: Move from a view of product
push and pricing levers, to recognizing
customers’ multistage buying lifecycle
and the impact it has on their attitude and
responsiveness in marketing, sales and
service interactions.
• Channel: Move from broad-based channel
integration, where everything is integrated
with everything else, to specialized channels
aligned with the end-to-end experience and
what matters most to your customers.
• Enablers: Move from technology as the
primary enabler of efficiency to people as
the primary asset at the point of delivery.
• Information: Move from historical data inte-
gration and analysis to targeting data and
new research techniques around customer
events to yield timely and relevant customer
insight.
Apply an outside-in perspective
Brand communications set expectations, but
customers’ experiences shape their attitudes.
A customer’s experience is based on the
specific interactions he or she has with the
bank. These interactions, also called moments
of truth, differ by customer segment. When
delivery is not aligned with expectations, a
moment of truth can turn into a point of pain
for the customer and negatively impact his
or her attitude toward the bank. But when
delivery exceeds expectations, and is aligned
to benefit the bank, sources of delight can
emerge to positively impact a customer’s
perception of the bank and alter corre-
sponding patterns of behavior.
For example, for a high net worth customer,
a moment of truth might occur when a large
transfer of funds is completed. This moment
of truth may be a source of delight when
the transaction is completed the same day,
preventing loss of interest income. For a
To change customer
attitudes, leaders
must first change the
mindsets inside their
organizations.
12 IBM Global Business Services
college student, a moment of truth may be
when he is out with his girlfriend and uses his
credit card to pay for their pizza. This inter-
action could be a point of pain if his card is
rejected due to a bank error.
To understand and effectively manage
customer attitude, banks need to identify
specific moments of truth, by advocacy
segment, and design target experiences that
are competitively superior, while prioritizing
resources and investments.
Break the rules
As banks seek to improve the operating
model that supports customer interactions,
executives should work to relieve traditional
design constraints.
• Human performance: In the realm of
meeting emotive needs, human perfor-
mance is still the most effective means
of conveying important attributes like
empathy, dignity, value and responsiveness.
Organizations must create the culture and
organizational model needed to promote
greater commitment, accountability and
competency for leaders and staff – allowing
large organizations to become more agile in
delivering consistently in spite of the natural
barriers that size and silos can create.
• Solution experience: Banks need to
provide easily accessible mechanisms to
capture and integrate customer needs into
the overall banking experience not just into
elements of the product design and sales
approach. The experience needs to include
listening to and understanding customer
financial needs, dispensing appropriate
financial advice and customizing services
that are relevant and appealing.
• Customer focused organization and
operating model innovation: Banks must
open the aperture and create operational
benchmarks that include financial institu-
tions in other segments of the market. The
customer strategy should create differen-
tiation through the bank’s own operational
strengths and by emulating the capabilities
of leaders outside of its peer group.
Questions to consider
As you consider your own position in the
market, assemble your management team and
ask yourselves the following questions:
1. Are our customers our advocates?
• What drivers of advocacy are most
important to our customers?
• How large is the gap between antagonists
and advocates?
• What should our target advocacy share be?
2. What should we be doing to increase our
advocacy share?
• How and why do our customers buy?
• How do we best market, sell and serve?
• How do we turn customers into advocates?
3. What do we get from improving our
advocacy share?
4. How should we be doing it?
• What business capabilities do we need?
• Who should we look to as benchmarks?
• What can we do now (or soon)?
• How do we close the gaps (process, people
or technology)?
Leaders must tailor
customer experiences
for different advocacy
levels – and implement
the operational changes
needed to deliver these
experiences.
13 Unlocking customer advocacy in retail banking
5. How do we rally the organization for
sustained action?
6. When should we be implementing critical
capabilities?
• How do we make the changes manage-
able?
• What is the right order of implementation?
• How do we get them done?
ConclusionFor banks to grow organically, a strong
commitment to strategic customer growth
options must be articulated through a well-
structured approach, designed to improve
customer attitudes toward bank capabilities
and assess their potential value. Banks must
break with traditional, one-sided, inwardly
focused customer initiatives and drive toward
a well-balanced, customer focused model to
exploit the potential of its most valuable asset
– its customers.
Unlocking this growth potential is not
easy. We believe it can be more effectively
accomplished through the adoption of a
customer-advocacy-based measure, such
as the CFiq, that highlights the operational
improvements that are key to enhancing the
customer experience and the value of the
relationship.
With the right approach, sustainable organic
growth is more attainable. Those institutions
that understand their CFiq scores and the
impact these measures have on the customer
base, develop a compelling customer expe-
rience, and operationalize the necessary
improvements to create a customer focused
enterprise will have a distinct advantage.
About the authors Scott Lieberman is an IBM Global Business
Services, CRM Business Solutions
Professional. Scott can be reached via email
Robert Heffernan is the CRM Global Leader
for the IBM Institute for Business Value. Bob
can be reached at [email protected].
com.
Contributors
Contributors to this paper include Steve Ballou,
Bruce Baron, Jonathan Hill and Scott Walters.
Executive sponsors
This research effort was sponsored by John
Armstrong and Steve LaValle, both of
whom are partners at IBM Global Business
Services.
About IBM Global Business ServicesWith business experts in more than 160
countries, IBM Global Business Services
provides clients with deep business process
and industry expertise across 17 industries,
using innovation to identify, create and deliver
value faster. We draw on the full breadth of IBM
capabilities, standing behind our advice to help
clients implement solutions designed to deliver
business outcomes with far-reaching impact
and sustainable results.
G510-6330-00
© Copyright IBM Corporation 2006
IBM Global Services Route 100 Somers, NY 10589 U.S.A.
Produced in the United States of America 10-06 All Rights Reserved
IBM, IBM logo and IBM Customer Focused Insight Quotient (CFiq) are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both.
Other company, product and service names may be trademarks or service marks of others.
References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates.
References1 Heffernan, Robert and Steve LaValle. “Advocacy in the customer focused enterprise: The
next generation of CRM Done Right.” IBM Global Business Services. April 2006. http://www.
ibm.com/innovation/crm
2 Copies of “CRM done right: Executive handbook for realizing the value of CRM” are
available at http://www-935.ibm.com/services/us/bcs/html/2004_global_crm_study_gen.
html and copies of “Advocacy in the customer focused enterprise: The next generation of
CRM Done Right” are available at http://www.ibm.com/innovation/crm
3 “Bank of America Corporation, Order Approving the Merger of Bank Holding Companies.”
Federal Reserve Board Press Release. December 15, 2005. http://www.federalreserve.gov/
boarddocs/press/orders/2005/20051215/attachment.pdf
4 Kopp, Guillermo. “Innovative banks find satisfied customers, sustained growth go hand in
hand.” TowerGroup. February 23, 2005. http://www.microsoft.com/industry/financialservices/
banking/businessvalue/tginnovationarticle.mspx
5 Heffernan, Robert and Steve LaValle. “Advocacy in the customer focused enterprise: The
next generation of CRM Done Right.” IBM Global Business Services. April 2006. http://www.
ibm.com/innovation/crm
About the CRM Practice
IBM clients – businesses worldwide, across industries – are today reaping the rewards of
a self-sustaining approach to CRM that enables them to accurately assess their strengths
and weaknesses, calculate risks, control investments, manage change and set reason-
able expectations from the start.
• CRM Strategy Services span the breadth of CRM transformation – from planning
through implementation and value realization. These services enable companies to
develop and manage customer focused and CRM programs in a thoughtful, informed
way using a practical, focused, best practices-based process.
• Marketing and Sales Transformation focuses on solutions for improving the effective-
ness and efficiency of marketing and sales professionals to help organizations utilize
customer-related data to uncover patterns and behaviors, deploy marketing programs,
increase sales productivity and accurately measure the success – and returns – of
customer focused initiatives.
• Service Transformation helps clients transform service operations to create customer
value, based on reduced service cost and improved customer satisfaction. Service
Transformation drives effectiveness and efficiency through the many stages and
channels of the post-sales service life-cycle.
• Contact Center Optimization improves the efficiency and effectiveness of contact center
operations. It covers inbound and outbound, sales and service contact centers and
their related self service channels.
• Business Intelligence describes an environment where relevant, accurate informa-
tion is provided in time to respond with speed in making decisions and taking action.
IBM provides services that enable companies to learn about their customers via an
Intelligence On Demand environment.
IBM Business Consulting Services
Financial Services
IBM Institute for Business Value
Integrating sales
with service in
financial services
customer care
centers
IBM® Institute for Business ValueIBM Business Consulting Services, through the IBM Institute for Business Value,
develops fact-based strategic insights for senior business executives around critical
industry-specific and cross-industry issues. This executive brief is based on an
in-depth study by the Institute’s research team. It is part of an ongoing commitment
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Integrating sales with service in financial services customer care centers
Executive summary Over the past decade, companies in multiple industries
have come to see customer care centers (CCCs) in
a new light: as critical components of their customer
service and distribution strategies. No longer regarding
the running of CCCs solely as a necessary cost of doing
business, executives are becoming savvy to CCCs’
previously untapped potential to boost revenue while
broadening and strengthening customer relationships.
As a result, spending on CCCs is on the rise, with global
technology spending expected to grow at more than 7
percent per year, from US$3.6 billion in 2003 to US$5.1
billion in 2008.1 But, so far anyway, the results of this
newfound focus have been weak, especially for financial
services firms.
Despite comprising nearly 23 percent of the U.S. CCC
market, behind only telecommunications and technology
(25 percent) and retail and manufacturing (27 percent),2
the efficiency and effectiveness performance of financial
services firms’ CCCs has lagged that of most other
industries (see Figure 1).
Even the efforts of firms that have launched new and
innovative initiatives have been hampered by their
inability to achieve more than one of the three key value
creation objectives – reducing costs, increasing revenue
or retaining customers. Despite firms’ investments
in performance improvement, lack of an integrated
approach to value creation often prevents initiatives from
providing the desired strategic results.
A recent IBM Institute for Business Value study shows
that few financial services firms have been able to strike
the appropriate balance among all three value creation
objectives. Truly optimizing the value of CCCs requires an
integrated approach that blends business priorities into a
cohesive strategy.
An integrated approach will require strategic CCC
investments in several areas at once:
‚" Improving contact flow management
‚" Optimizing workforce productivity
‚" Standardizing processes and infrastructure
‚" Achieving optimal customer profitability.
Financial services firms are expected to keep investing
heavily in CCCs. A better awareness of the required trade-
offs is necessary to craft a comprehensive strategy to
gain the greatest returns on these investments.
1
Catalog
HealthcareTravelUtilities
Consumer productsGovernment
Financial servicesInsurance
Telecommunications
100
Figure 1. Customer care center performance by industry.
0
50
Effe
ctiv
enes
s in
dex
10050
Effi ciency index
Effective, not effi cient Asset
Liability Effi cient, not effective
Source: Anton, Dr. Jon. “eBusiness Best Practices for All Industries.” Benchmark Portal. February 2004.
2
IBM Business Consulting Services
Objectives can seem incompatible As financial services firms try to meet specific business
imperatives, such as “selling more,” “lowering costs” and
“improving the overall customer experience,” they are not
always cognizant of the adverse impact of their actions on
other business objectives. The ongoing challenge, then, is
to find the optimal balance among three main objectives
that sometimes seem to conflict with each other:
‚" Reducing costs and increasing efficiency – Lowering
the costs of staffing, equipping and operating CCCs,
while continuing to meet performance goals.
‚" Increasing sales – Building infrastructure and training
staff to identify and pursue cross-selling and up-selling
opportunities more effectively.
‚" Retaining customers – Meeting customer needs
by identifying customer calls and routing them to
appropriate sales and service channels, and improving
the customer experience by being courteous and
responsive.
Balancing all three is the key to optimizing CCC value.
Excessive focus on costs is likely to limit revenue
potential and negatively impact customer retention.
Supervisors may emphasize metrics too heavily (such
as average handling time). Or, inadequate investment in
training and compensation may result in poorly trained,
unmotivated agents who are unlikely to be effective sellers
or satisfy customers.
Similarly, strongly pushing revenue growth can raise
costs and lower customer satisfaction if customers feel
they are getting the “hard sell.” An excessive emphasis
on customer retention could increase costs and
limit revenue growth if the focus on ease of use and
customer satisfaction hampers proactive selling of new
products and services.
What’s happening now in care centers Across all industries, IT investment is growing for
both inbound and outbound capabilities, with over 90
percent of IT investment devoted to inbound. Outbound
technology investment will continue to be constrained by
new regulations that limit firms’ ability to call customers,
but inbound technology revenues are expected to reach
US$4.6 billion by 2008 (see Figure 2).
Integrating channels enterprisewide
A great deal of CCC investment is prompted by the
need to integrate enterprise resources across channels,
using a mix of technology and people-oriented solutions.
In fact, while spending on multichannel IT for CCCs
represented nearly10 percent of total IT spend on North
American CCCs, multichannel IT is projected to account
for 28 percent of total North American IT CCC spend by
2007.3 These solutions encompass multiple categories:
branch, Internet, wireless, call center, ATM/kiosk and
relationship sales.
6
5
4
3
2
1
0
Figure 2. Projected global customer care center IT investment.
$US
bil
lion
s
Source: “Contact Center Component Technology to 2008.” Datamonitor, May 2004.
0.5
4.6
0.4
4.4
0.4
4.1
0.4
3.8
0.3
3.6
2004 2005 2006 2007 2008
OutboundInbound
5.14.8
4.54.2
3.9
CAGR2004 - 2008
5.5%
10.8%
3.3%
3
Integrating sales with service
Aiming for efficiency
As companies seek to improve CCC efficiency, rising
costs – especially for labor – pose a major challenge. One
reason is the investment needed to hire, train and retain
agents, an ongoing concern because of high turnover
rates. With a reported total cost of US$15,280 to bring on
a new agent, hiring expenses for financial services are far
higher than for other industries.4
In order to better track efficiency and identify areas for
improvement, companies in multiple industries are using
more rigorous, detailed performance metrics. A cross-
industry survey found that the three most common
measurements used are abandonment rate (used by
20 percent of respondents), followed by service levels
(17 percent) and average time in queue (16 percent).5
In addition, the majority of firms are employing multiple
methods to encourage customer self-service, with varying
effectiveness (see Figure 3).
Some industries are increasingly pursuing outsourcing to
improve efficiency, for both inbound and outbound CCC
activity. Though financial services firms recognize that
outsourcing – to both domestic and overseas service
providers – is a way to lower costs and offer round-the-
clock service, they are also discovering that there can
be drawbacks as well. The challenges associated with
outsourcing include:
‚" Enabling data integrity and security
‚" Providing transparency in customer interactions
‚" Meeting realtime processing requirements
‚" Complying with regulations
‚" Managing dispersed teams.
Recently, some financial services firms have scaled back
their outsourcing of CCCs while continuing to pursue other
global sourcing strategies.
Note: Survey base: 176 North American fi rms with annual revenues of US$500 million or more (percentages may not total 100 because of rounding).Source: Forrester Research, January 2005.
Figure 3. Effectiveness of methods used to promote customer self-service.
Improve usability
Proactively market benefi ts of self-service
Use e-mail to drive customers to self-service
Have phone agents train customers in self-service
Offer monetary incentives to use self-service
Advertise self-service on phone when callers are on hold
Have retail agents train customers on self-service
Hide phone contact information on the Web
0 10 20 30 40 50 60 70 80 90 100
Percentage of respondents
6
7
9
11
13
14
48
2
24 4 66
55
69
52
39
38
17
76
2
3
4
5
3
32
12
36
19
33
44
45
2
10
Very effectiveSomewhat effectiveIneffectiveDidn’t use or don’t know
4
IBM Business Consulting Services
Boosting effectiveness of sales and service
To improve the sales and service effectiveness of CCCs,
companies across industries again will need to consider
the optimal combination of human and technology
solutions. With well-trained agents on board, intelligent
call routing technology can be leveraged most effectively.
Call routing applications identify customers and directs
their calls to the appropriate agent or self-service channel
based on:
‚" Customer history and status
‚" Type of service needed
‚" Customer preferences (for example, using electronic
chat instead of live telephone calls).
Calls can even be routed to match customer needs with
agent skills, such as product knowledge or languages
spoken. With this information, intelligent routing rules
support a positive customer experience across channels.
Even with the most advanced call routing technology,
CCCs are still heavily dependent on the skills of individual
agents to make sales and meet customers’ needs. One
way to boost agent effectiveness is to increase their
ability to understand customer needs and provide them
with the appropriate mix of products and services. Sales
techniques – such as active listening, probing to spot
unmet needs and identifying potential customer savings
by adding products or services – continue to be a part of
agent training.
The most-used measures of agent performance illustrate
the dual focus on providing service and selling – the
potential conflict between the two is clear. No longer are
agents evaluated only on traditional CCC metrics like
average handling time and customer satisfaction; the top
four metrics in 2003 included number of units sold and
sales revenue (see Figure 4). Today, an agent must strive
to keep customers happy while selling them more, in less
time. And, even though there has been a trend toward
deemphasizing average handling time as a primary
metric, the presence of daily sales targets continues to
drive agents to spend as little time as possible handling
individual calls that are unlikely to result in new sales.
Undoubtedly, this pressure to “wear two hats” has
contributed to financial services’ full-time agent turnover
(27 percent) being higher than all industries except
automotive.6 To help prevent agent burnout and avoid
the cost of hiring each new agent, industry leaders are
recognizing the potential returns from providing training
to convert service-only agents into service/sales agents.
When the emphasis is on “converting” internal service
representatives into sales agents, transforming service-
oriented centers into high-performance service-and-sales
operations is more cost-efficient. Respondents to a
benchmarking survey reported a 66 percent effectiveness
rate when hiring new sales-oriented agents, compared to
72 percent effectiveness of training incumbent agents.7
Note: Survey of 59 sales and service leaders from 57 leading companies across 20 industries. Source: “Service-to-Sales Excellence: Developing Service Representatives into High-Sales Achievers.” Best Practices LLP. May 2004.
Figure 4. Most common metrics used to evaluate agent performance.
Number of units sold
Customer satisfaction
Average handling time
Sales revenue
Conversion rate (sales/offer)
Percent of representatives meeting sales targets
Average products/customer
Percent of accounts penetrated with up-sell offerings
Share of customer
0 20 40 60 80 100
Percentage of respondents
69
79
80
82
89
89
89
65
55
5
Integrating sales with service
This approach also means lower recruiting and training
costs since managers can select candidates with proven
customer service ability. In addition, existing employees
already have customer relationships, as well as company
and product knowledge. What’s more, internal recruitment
reinforces a visible CCC career path.
Consolidation of CCC center capabilities into fewer
facilities can also improve the returns from CCCs. If initial
costs can be justified, consolidation can offer benefits
in both efficiency and effectiveness. Consolidation also
helps firms to achieve consistency in service quality,
reduce IT spending, lower training costs and speed the
rollout of new marketing initiatives. Firms have to weigh
potential benefits against the impact of costs, including
facilities (50 percent), headcount (30 percent) and
technology (20 percent).8
Because of these costs, consolidation is not a good
option for all. But it often makes sense for firms saddled
with redundant capabilities due to rapid growth in multiple
geographies or large acquisitions.
Strategic financial services initiatives Finding the right mix of people and technology is
essential for stronger returns. To date, financial services
firms have enacted a wide range of strategic CCC
initiatives, with varying degrees of success.
Some firms have made cost reduction the top priority,
while others emphasize either improved revenue or
customer retention. Successful firms are those that are
able to leverage technology in tandem with thoughtful
people strategies that focus on motivation and retention.
Initiatives to lower costs
Methods to reduce costs can take many forms, including:
‚" Migrating customers to lower-cost channels
‚" Improving workforce deployment and agent productivity
‚" Outsourcing CCC operations.
Companies are looking for ways to more effectively
use their workforces to reduce costs. For example,
organizations have explored models whereby high cost,
experienced agents support junior agents via internal
chat sessions to provide superior service at a lower per
unit cost. As part of its focus on cost reduction, Nissan
Motor Acceptance Corporation (NMAC) enacted a
workforce optimization effort.
Reducing costs: NMAC9
With a goal of improving workforce deployment and agent
productivity, NMAC uses a workforce optimization program to
automate planning and add flexibility to agent work schedules.
NMAC introduced “progressive shifts,” whereby staffing is
heavier on Mondays and Tuesdays to handle a typical surge in
calls at the first half of each week.
Results include:
• Unplanned overtime decreased by 39 percent
• Agent response time increased by 66 percent (to less than
50 seconds)
• Call abandonment rates plummeted by 66 percent, to just 2
to 5 percent
• Managerial administration hours reduced by 58 percent
• Agents’ adherence to schedules rose from 70 percent to
95 percent.
Initiatives to raise revenue
Efforts to increase revenue include:
• Providing training tools and incentives that encourage
and enable agents to cross- and up-sell
• Segmenting customers and developing targeted
sales efforts
• Integrating product and channel strategies to
optimize sales.
To grow the top-line, firms are recognizing the value of
teaching agents not only how to provide better service,
but how to sell. Where possible, incentives that enable
agents to further their careers (for example, through
tuition grants or career opportunities in the organization)
can help create a sense of pride and ownership with
significant positive impact to CCC performance. SunTrust
Online aimed to increase revenue through a focus on
agent training.
6
IBM Business Consulting Services
In search of equilibriumTrue value optimization for CCCs requires an integrated
approach. Strategic priorities must be reexamined to
understand how to create the optimal mix of reduced
costs, higher revenue and improved customer retention
rates (see Figure 5).
By reassessing all aspects of center operations, strategic
CCC investments can be prioritized according to opportu-
nities spanning multiple functional areas:
‚" Improving contact flow management
‚" Optimizing workforce productivity
‚" Standardizing processes and infrastructure
‚" Achieving optimal customer profitability.
Improving contact flow management
Better management of contact flow requires
standardized processes, workflow and business rules
across the enterprise and across channels. Along with
reducing agent work volume, improved contact flow
provides customers with appropriate levels of service in
several ways:
‚" Identify and segment incoming calls – Using
interactive voice response (IVR) in combination with
customer data to determine customer needs, existing
relationships, past interactions and recent transactions
across all channels. In addition, by using customer
lifetime value or tiered customer ratings (such as gold,
silver and platinum), banks can also tee up segment-
aligned products and services that provide special
price considerations.
‚" Direct calls to appropriate levels of service – Using
skills-based routing and an agent proficiency matrix to
route transactions to the agent who is best equipped to
complete the call successfully on the first attempt.
‚" Increase levels of self-service, where appropriate –
Directing customers to lower-cost channels, including
IVR and the Web. However, this strategy must be well
thought out since a poorly designed self-service offering
risks increasing the number of online calls exponentially,
to the detriment of the initial objective.
Increasing revenue: SunTrust Online10
To improve cross-selling to customers, SunTrust customer
service representatives are trained as "financial physicians" who
are equipped to walk customers through product options, based
on existing assets and transaction history.
Results include:
• Increased cross-selling activity
• Over half of all sales referrals now come from customer
service representatives
• Customer care center is no longer a “cost drain,” but now
breaks even.
Initiatives to keep customers
Initiatives to retain customers include:
‚" Integrating channels to provide optimal, consistent
service
‚" Sharing customer data across channels and LOBs
‚" Tailoring services to customer needs and preferences.
Financial services firms are aiming to retain their
customers through various process and infrastructure
improvements, including the use of online collaborative
support to seamlessly link calls with call centers. Firms
continue to innovate in their quest to provide differen-
tiated customer service. IndyMac Bank, in this case,
emphasized more personalized customer service to
improve its customer retention rates.
Retaining customers: IndyMac Bank11
To improve customer satisfaction and help mortgage customers
through the often trying loan application and closing processes,
IndyMac provides customers with full access to all parties
involved in the loan process through its customer care centers.
It also includes access to 24/7 live chat through its Web site
and equips agents with multiple tools and educational content
for mortgage purchasers. The enhanced loan process was
geared to raise close rates and reduce drop-out rates (when
applicants fail to complete the process due to frustration with
lengthy delays or uncertainty about the mortgage loan process).
As a result, the change contributed to 41 percent mortgage
volume growth between 1999 and 2004 (compared to industry
average of 8 percent).
7
Integrating sales with service
agent compensation to organizational and CCC
metrics; equipping agents with desktop tools that
support customer-facing processes, integrated scripting
and knowledge management; and rewarding innovation
and the sharing of scalable ideas.
‚" Provide monitoring tools to managers and agents
to raise productivity and service levels – Utilizing
performance metrics systems that drill down into
aggregated data; performing root cause analysis
and identifying best practices; and instituting quality-
monitoring programs that track and evaluate agent
interactions with customers.
Workforce optimization can reduce costs by enabling
agents to handle calls more efficiently in less time, and
by matching the number of agents to call volume. It
can generate revenue by providing agents with the
training, tools and incentives to sell more effectively.
Higher customer retention can result from better service
by trained agents who match needs with appropriate
products and internal resources.
Contact flow management is an opportunity to reduce
costs by limiting manual handling of routine calls and
reallocating resources to focus on more complex,
valuable interactions. Appropriately equipped agents can
focus on cross-selling to increase revenue. In addition,
matching customer needs with the right agents on every
call will improve service and satisfaction, ultimately
helping to raise customer retention rates.
Optimizing workforce productivity
With workforce optimization, productivity gains are made
by combining better tools, training and incentives for
agents with effective performance management and
measurement. Better customer service goes hand in
hand with higher productivity, through actions that include:
‚" Match workforce levels and agent skills with demand –
Using workforce management applications that address
scheduling, forecasting workloads and budgeting
requirements.
‚" Optimize agent performance to improve efficiency and
raise employee and customer satisfaction – Cultivating
talent by recruiting agents with specific skills; tying
Red
uce
cost
s
Increase revenue Retai n custom
ers
Optimize customer care center value
Figure 5. Integrating strategic priorities to optimize customer care center value.
Source: IBM Institute for Business Value analysis.
Creating a low-cost, highly effi cient environment• Migrating customers to lower-cost channels• Improving workforce deployment and agent
productivity• Consolidating and outsourcing customer care
center operations
Providing customers with a range of tailored product and service options• Integrating channels to provide optimal, consistent
service • Sharing customer data across channels and LOBs to
standardize experience • Tailoring services to customer needs and preferences
Integrating selling into CCC functions• Training, enabling and providing incentives for agents to cross-sell and up-sell • Segmenting customers and developing targeted sales efforts• Integrating product and channel strategies to optimize sales
8
IBM Business Consulting Services
Standardizing processes and infrastructure
Process and infrastructure standardization entails rational-
izing and integrating processes, data, applications and
facilities across channels and lines of business (LOBs).
Best-in-class capabilities can be leveraged across
customer care functions in various ways:
‚" Integrate processes across channels and customer
care functions – Eliminating redundant processes
and activities; identifying and leveraging best-in-class
processes across channels; and fully integrating
electronic channels with existing CCC operations.
‚" Develop common capabilities to support core customer
functions – Adopting universal queuing, routing and
reporting; providing universal access to customer
databases to enable the delivery of consistent
customer support; developing common management
and monitoring across all communication channels;
and cross-training agents to support newer e-mail and
text chat functions.
‚" Standardize applications and infrastructure –
Rationalizing CRM, financial, human resources and
enterprise resource applications to enable multi-
channel transaction handling and increase visibility into
customer interactions.
Process and infrastructure standardization lowers costs
by reducing redundancies and leveraging the best, lowest
cost practices across the CCC. Increased revenue can
come from a unified view of customer data, realtime
transaction history and access to point-of sale applica-
tions across LOBs. And, better customer retention can
result from giving customers a consistent experience and
a “single face” through all channels.
Achieving optimal customer profitability
Optimal customer profitability requires identifying and
targeting customer needs with tailored customer service
and product offers, including the following actions:
‚" Route customer calls to appropriate channel or media –
Identifying and segmenting customers by needs and
preferences, based on data from all interactions and
transactions
‚" Build cross-selling and up-selling capabilities – Enabling
agents to identify opportunities and close sales
‚" Make outbound customer acquisition and retention
calls – Targeting desirable existing and new customers
in target segments.
Customer profitability typically goes up when resources
can focus on calls with higher returns; less time (and cost)
is spent on routine calls and less profitable customers.
Identifying and targeting customer needs with tailored
products and services customarily raises revenue by
boosting cross-selling, share of wallet and lifetime value
of customers. Products, services and offers that match
customer needs will help enable higher customer retention.
Sales plus service: Firms see the lightAs financial services firms seek greater value from their
CCCs, the necessity of integrating sales and service
has seen the light of day. When firms choose from
various CCC solutions that leverage both people and
technology, striking that balance among often-competing
business directives is the key to profitably integrating
sales with service.
9
Integrating sales with service
About the authorsSunny Banerjea is the Global Banking Leader in the IBM
Institute for Business Value, Financial Services Sector.
Sunny can be reached at [email protected].
John M. White is a Managing Consultant in the IBM
Institute for Business Value. John can be reached at
Kimberly Hedley is a Senior Consultant in the IBM Institute
for Business Value. Kim can be reached at khedley@
us.ibm.com.
Contributor
Daniel Latimore, CFA is a partner in IBM Business
Consulting Services and executive director of the IBM
Institute for Business Value.
About IBM Business Consulting ServicesWith business experts in more than 160 countries, IBM
Business Consulting Services provides clients with deep
business process and industry expertise across 17
industries, using innovation to identify, create and deliver
value faster. We draw on the full breadth of IBM capabil-
ities, standing behind our advice to help clients implement
solutions designed to deliver business outcomes with far-
reaching impact and sustainable results.
References1 “Contact Center Component Technology to 2008.”
Datamonitor. May 2004.
2 Ibid.
3 Bradway, Bill. Group VP, Banking. “North American Bank
Channel Spending Projections: 2003-2007.” Financial
Insights. 2003.
4 Anton, Dr. Jon. “eBusiness Best Practices for All
Industries.” Benchmark Portal. February 2004.
5 Benchmarkportal.com. Survey of benchmark portal
members in response to the following question,
“What are the call center performance measures
that you watch most closely in managing your call
center?” 2004. http://www.benchmarkportal.com/
newsite/article_detail.taf?topicid=188; IBM Institute for
Business Value analysis.
6 Anton, Dr. Jon. “eBusiness Best Practices for All
Industries.” Benchmark Portal. February 2004.
7 Survey engaged a benchmark class of 59 sales and
service leaders from 57 leading companies across 20
industries to analyze best practices. Best Practices LLP;
IBM Institute for Business Value analysis.
8 Sodano, Linsey and Preslan, Laura. "Dropping the
Cost of Customer Service, Part 1: Consolidating Call
Centers." AMR Research. July 2003. Need permission?
9 O’Herron, Jennifer. “Answering the Call.” Bank Systems
& Technology Online. May 1, 2004. www.banktech.com
10 Ramsaran, Cynthia. “Contact Centers or Cost Centers?”
Bank Systems & Technology Online. January 1, 2004.
www.banktech.com
11 www.indymacbank.com
.
G510-6208-03
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IBM Global Business Services
Banking
IBM Institute for Business Value
Will growing investment in
branches bear fruit for banks?
Branches in bloom
IBM Global Business Services, through the IBM Institute for Business Value, develops fact-
based strategic insights for senior business executives around critical industry-specific and
cross-industry issues. This executive brief is based on an in-depth study by the Institute’s
research team. It is part of an ongoing commitment by IBM Global Business Services to
provide analysis and viewpoints that help companies realize business value. You may contact
the authors or send an e-mail to [email protected] for more information.
Branches in bloom IBM Global Business Services1
Introduction
It was not long ago that electronic banking was expected to replace the branch
as customers’ channel of choice. However, many of the developments that were
expected to signal the branch’s demise are increasing its importance as a critical
component of banks’ customer service strategies. The adoption of self-service,
alternative channels has increased customers’ demand for 24X7 multichannel
access to accounts and has raised expectations for convenient, professional service
from branch personnel.
Major banks are now in a race to expand and renew their branch networks as a way
to enter new markets, increase penetration of existing markets and build wallet share
among customers. In the past decade alone, the number of bank branches in the
United States rose 15 percent despite the fact that the number of banks actually fell
by 29 percent.1 Many banks are diverting money saved through mergers or other
cost-cutting initiatives to invest in branches; others are spending excess capital in
the hope of generating more business through new and renewed branches. But
simply having the most extensive or best-designed branch network may not be
enough to succeed. In order to differentiate themselves from their competitors and
achieve their growth objectives, banks must be able to attract customers to their
branches, identify the needs of each customer in the branch and have the in-branch
capabilities necessary to meet those needs. For branch transformation efforts to
bear fruit, banks must blend their physical presence with innovative products, trained
and motivated personnel and IT proficiency (both out front and behind the scenes)
for a fully integrated approach to creating value.
Back to the future: Banking on the branch
By the end of the nineties, branch banking appeared to be destined for extinction.
But nearly ten years later, the buzz is all about the branch: customers across every
age demographic not only still use the branch, but 86 percent say they visit a branch
at least once a month.2
Branch transformation has been widely touted as a target area for opportunity and
growth. Research shows that branch network expansion and renewal can contribute
to asset growth and stronger operating performance.3 Toward that end, banks are
counting on branches to gain entry into new markets and increase business levels
in existing markets. In fact, while banks continue to invest in new branches, IT
investment to renew existing branches is expected to account for nearly all of the
growth in IT branch spending.4
Contents
1 Introduction
1 Back to the future: Banking
on the branch
2 Beyond the buzz: Basis
for change
4 Getting a high yield from
branch strategy
12 Test yourself
13 Conclusion
14 About the authors
14 About IBM Global Business
Services
15 References
Branches in bloom IBM Global Business Services2
In the midst of increased competition, the key to creating value will be to move past
what branch banking has been to understand what it has the potential to be in the
future. A successful branch strategy depends on making smarter choices that will
bear fruit long into the future. To boost productivity, increase sales and cut costs,
banks must choose the right blend of three crucial elements:
‚" The integration of a renewed branch presence and innovative products and
services tailored to meet defined customer needs
‚" The selection, training, compensation and motivation of branch staff
‚" The proficient use of IT to support sales and streamline customer-facing and
back office processes across channels.
Beyond the buzz: Basis for change
Branches still have considerable impact on where and how customers bank. How
customers pick a bank depends largely on the branch network – 49 percent of
customers cite convenient location as a top reason they chose their bank.5 And in
spite of the availability of online channels, branch activity is nearly uniform across
all age demographics when it comes to purchasing new products. Generation Xers
and Yers, baby boomers and seniors all favor purchasing products in the branch.6
Research shows that customers – especially those of the baby boomer generation
– have been impatient with the ability of online channels to meet their needs. Once
they experience a problem online, they very often abandon that channel for a more
familiar one that offers human interaction. Younger customers, many new to banking,
are more likely to need human assistance to validate their decisions regarding
complex products and services. Older customers, faced with concerns such as
retirement and wealth preservation, often want professional advice and are just
more comfortable servicing their accounts face-to-face.
But customers’ continued reliance on the branch does not guarantee fruitful
business results. The vast majority of customers seek branch service for low-
value transactions. Forty to sixty percent of teller transactions are high-volume,
low-value.7 These low-value transactions drain banks’ resources, taking time away
from potentially higher-value customer relationship building activities. Currently, the
expected sales conversion rates at some of the industry’s more aggressive banks
are less than 2 percent of all teller transactions.8, 9 Branch personnel must be able
to identify customer needs, distinguish between service and sales opportunities
and serve each customer appropriately.
Branches in bloom IBM Global Business Services3
Forty-seven percent of banks say increasing product sales (e.g., new accounts,
loans, deposits and CDs) will be the cornerstone of their branch strategy.10 Many
banks, however, struggle to execute on this strategy since their branch staff lack
necessary sales skills. Furthermore, banks are facing turnover rates as high as 30
percent resulting from exceptionally low pay and limited career opportunities.11 In
one survey, 88 percent of banks report having at least moderate problems retaining
tellers, yet only 29 percent have formal teller-retention initiatives.12
Banks are also increasing their investment in renewing and improving the capabil-
ities of existing branches (see Figure 1). IT spending is expected to focus on
communication technology upgrades, teller systems and Customer Relationship
Management (CRM) functionality. However, it may be difficult for banks to benefit
fully from IT investments without also addressing workforce and sales strategy
challenges. What good is a slick new application if your front line can not use it
to its full potential? A suboptimized infrastructure, for example, slows application
performance, affecting speed of service and often forcing platform staff to resort to
paper forms, defeating the very reason for making technology investments.
Figure 1. Projected IT spending on new branches and branch renewal, 2004-2007.
Seventy-nine percent of retail
bankers surveyed rate lack of
sales skills on the front line
as the biggest challenge to
implementing sales strategies
in branches. Sixty-eight
percent say that inadequate
sales training and coaching, as
well as difficulties in tracking
and managing front-line
skills and activities are major
challenges for banks today.13
CAGR2004 - 2007
US
$ m
illi
ons
2004e 2005e 2006e 2007e
1,600
1,400
1,200
1,000
800
600
400
200
0
Branch renewal
New branches
1,1501,200
1,300
860 850870 875
1,460 8.3%
26.4%
O.6%
Source: Bell, Richard. “U.S. Branch IT Spending Projections: 2003 to 2007.” Financial Insights. July 2003; IBM Institute for Business Value analysis.
290350
430
585
Total
Branches in bloom IBM Global Business Services4
Finally, banks have to attract profitable customers to their branches before the
competition does. Recent rapid expansion, and the race to gain wallet share through
the branch, has amplified competition.14 So, no matter how many strategic locations
a bank has, and what transformative physical features, products or services its
branches offer, it is battling similar initiatives in an increasingly crowded marketplace.
Furthermore, with branches growing at a pace faster than population growth rates,
there is a danger of market saturation.
Getting a high yield from branch strategy
Any time there is real opportunity to create value and expand the bottom line in
any industry, there is the tendency toward following current trends. But will banks’
growing investment in branches really bear fruit? Some banks are reconfiguring their
physical presence. Others are beginning to offer new products and services through
their branches. Still others are rethinking their staffing strategies and investing in IT
proficiency. But taking branch transformation to the next level requires an integrated
approach. Focusing on finding the right mix of the following elements can help
banks differentiate, and overtake the competition.
Presence and products: Tailored by design
Some banks are changing branch presence and products to better cater to
customers. By changing the look and feel of the branch, improving and stream-
lining service and offering attractive and innovative products, banks aim to target
customers interested in high-value transactions. Successful branch strategy includes
a blend of location, look and feel, and products that are tailored for target customers.
Physical presence
Despite the steady rise in the number of physical branches during the past decade,
the increase was not uniform across the United States (see Figure 2). From a
geographic perspective, branch expansion patterns generally mirror the long-term
growth of state economies: Five of the states with the greatest branch growth over
the past decade (Colorado, Texas, Nevada, Idaho and Utah) were also among the
ten states with the greatest job growth.15 In contrast, the number of branches has
actually declined over the same period in states that had earlier relaxation of state
branching restrictions (or had fewer branching restrictions in general). These states
include the major banking markets of California, New York and North Carolina.
Branches in bloom IBM Global Business Services5
Figure 2. Change in number of branches throughout the United States, 1994-2003.
Whether banks focus their branch strategies on expanding branch networks or
renewing existing branches – or both – it is important that they do so strategically.
Optimizing the branch network helps banks take advantage of their organizational
assets, including physical locations, human capital expertise, distribution alliances and
brand equity. Banks should also evaluate nontraditional branch business models and
alliances that could enable them to engage customers whenever and wherever they
are. A number of banks have aligned themselves with grocery stores, for example,
including Citizens bank with Giant Eagle and U.S. Bank with Safeway and Vons so that
customers can perform a wide variety of their daily and weekly tasks in one location.16
Banks should also consider redesigning their branches with layouts that serve
customers more effectively and increase sales activities. Upon entering the branch,
customers should be directed to the most effective point of service either by branch
personnel or through clearly designated branch layout cues – or better still, both.
Low-value service transactions that do not carry the potential for sales should be
channeled to self-service terminals, with potentially higher-value interactions handled
by trained branch personnel.
The 1994 passage of the
Riegle-Neal Interstate
Banking and Branching
Efficiency Act removed many
of the remaining individual
state law restrictions on
interstate banking. As a
result, interstate branching
increased rapidly. Passage of
this legislation had a greater
impact on those states
which previously had more
restrictive branching laws.
Decrease
Up 0 to 10 percent
Up 10 to 20 percent
Up 20 to 30 percent
Up over 30 percent
Source: Spieker, Ronald L. "Bank Branch Growth Has Been Steady – Will It Continue?" FDIC. August 2004.
Branches in bloom IBM Global Business Services6
Washington Mutual (WAMU) makes banking an occasion17
WAMU’s "Occasio" model branches were designed to resemble retail stores. The focus is on a customer-
friendly experience. Greeters and tellers dressed in colorful shirts escort customers to different service
destinations around the perimeter of the store for loans, sales and advice. Freestanding Internet
workstations with touchscreens allow customers to access the bank’s Web content and look up
information either on their own or with a sales associate. In the initial months after opening its first five
Occasio branches in Las Vegas, for example, the bank found that it had opened twice as many checking
accounts as usual and had three times as many deposits.
While competitive with traditional branches in mortgage lending and checking account generation,
Occasio branches achieve significantly higher consumer-lending volumes – 87 percent versus 49 percent
of total loans in traditional branches. Occasio branches also receive mystery shopper scores that exceed
90 percent on average. In addition, these branches, at approximately US$1 million per site, cost less than
many larger, less productive branches and have the potential to become profitable more quickly.
Banks have begun taking cues from leading retailers, making the branch a more
welcoming, efficient and exciting place to be. Their new designs include a mix of
self-service options (to direct low-value transactions away from tellers), more free-
roaming branch staff that ask and answer questions, and centralized and open
"discovery zones" where customers can browse for information on banking products.
Redefining the branch experience: Cues banks are taking from retailers
• Using concierges to greet customers and direct them to appropriate service areas
• Mirroring retail store design elements, such as ceiling height, lighting, promotional signage, colors
and flooring to clearly differentiate service areas
• Training customer representatives extensively to instill the strong service ethic evident in
successful retailers
• Providing well-equipped play areas to entertain children while their parents bank
• Offering full weekend hours, including the ability to bank on Sundays
• Applying automated workforce management tools that take into account customer traffic patterns
to maintain appropriate staffing levels.
Products
Providing access to higher-value, consultative products and services including
financial advice and planning, wealth management, investments, retirement
products, insurance, tax and accounting services, and business services should be
a key tenet of any branch transformation strategy. Products should be innovative,
competitively priced and marketed to target customers at appropriate points in their
lifecycles, instead of on a transaction-by-transaction basis. Rather than attempting
Branches in bloom IBM Global Business Services7
to be one-stop-shops, banks should select a portfolio of best-in-class products that
provide value to their target customers. For more complex services that are beyond
the competencies of branch personnel, banks should identify approved service
providers to whom branch personnel can refer customers.
People: Building a sales culture
In a recent survey, banks’ goal of increasing product sales was superseded only
by the desire to improve staff productivity (see Figure 3). In fact, developing and
retaining effective and efficient branch personnel is critical to the success of any
branch strategy.
Figure 3. Main business goals of banks’ branch strategies.
Branch staff often lack the soft skills required to conduct credible conversations with
customers about their financial goals. Few employees have the active listening, inter-
viewing, fact-finding, relationship-building and problem-solving skills necessary to
identify unmet needs and pair those needs with recommended banking products and
services. Tellers are often not technologically savvy enough to be able to leverage all
available IT resources, including advanced CRM applications designed to help them
help customers. Some staff also experience difficulties with multitasking well enough
to combine sales with customer service activities. Few incumbent branch staff have
licenses to sell nontraditional banking products, including annuities, mutual funds and
insurance. The skill deficiencies of branch staff, however, are not surprising, given that
the median compensation for a teller is less than US$20,000 per year (see Figure 4).18
0 10 20 30 40 50 60
Improve staff productivity
Increase product sales
Enhance wealth management
Automate core teller functions
Integrate branches with other channels
Cut business costs
50
Note: Survey base includes IT executives at 50 U.S. banks.Source: Datamonitor, “Branch renewal for community banks and credit unions,” June 2004.
Percent of respondents
47
43
33
18
5
Branches in bloom IBM Global Business Services8
Figure 4. Median base salaries of U.S. bank employees.
As demands on branch personnel increase, banks need to modify their criteria for
hiring and promoting front-line staff. The process of hiring and developing employees
should be consistent with the greater responsibilities being placed on these
individuals to sell bank products and services. Training should emphasize strong
business development skills, including soft skills such as effective listening. Training
techniques should be revamped to avoid an overly narrow focus on procedures and
product knowledge.
To signal the importance of sales and differentiated service, banks need to
create sales cultures that measure and compensate employees – in the form of
commissions and bonuses – for building relationships, generating revenue and
satisfying customers.
Furthermore, employees need to know how they are doing in order to continue to
develop their skills. Banks should provide supervisory on-the-job coaching as a tool
for sales management. Continually reassessing how sales strategies and employee
incentives are implemented is paramount: building a sales culture is an ongoing
process of experimenting, learning and refining. The branch sales strategy should be
regularly amended to reflect changes in target markets, types of products sold and
the capabilities of branch staff.
To encourage cross-selling on
the front-line, Wells Fargo is
basing a portion of employees’
performance evaluations on
how many customers pursue
their suggested services or
products. Wells Fargo also
sets sales quotas: full-time
tellers are asked to make an
average of one referral to
a personal banker per day,
part-time tellers are asked to
meet half that quota, and the
performance of all employees
is averaged over 90 days.19
0 10,000 20,000 30,000 40,000
Source: DePaula, Matthew. “With Rising Teller Turnover, Banks Aim to Retain.” US Banker. January 2005.
US$
2004
1999
36,249
29,044
30,663
24,420
29,645
23,000
24,326
21,000
20,696
16,942
20,426
16,324
19,138
16,217
Consumer loan oficer
Personal banker
Deposit/new account oficer
Head teller
Custodian
Mail clerk
Teller
% Change
1999 - 2004
24.8
25.6
28.9
15.8
22.2
25.1
18.0
Branches in bloom IBM Global Business Services9
Umpqua provides unique customer experience20
In Portland’s uber-hip Pearl District, branch banking is becoming more than just conducting transactions.
The area’s Umpqua Bank takes service to a new level with branches that borrow design elements and
customer service ideals from posh hotels, and customer relationship development ideas from the
neighborhood community center. The branch location is defined by an open space with plush chairs
where customers can sip Umpqua brand coffee and surf the Web or read the paper. A plasma TV flashes
news from CNN. Tellers’ row is placed out of sight, so as not to disturb the relaxing atmosphere. Out
front, there is a concierge-style "Serious About Service" (SAS) desk where "universal" sales associates
greet customers, answer questions and help customers find a variety of banking and community
information. Cash, change and transaction records are given to customers on old-fashioned silver trays,
with gold coin chocolates to recall a bygone era where customers were catered to. The Pearl District
branch also has a movie night and offers yoga classes. While it may seem that the bank is going to great
lengths to lure customers, these little extra touches have made Umpqua one of the fastest growing banks
in the US, with double-digit organic growth in deposits and loans.
IT proficiency: Optimize your assets
Technology investments should do three things: support employees’ ability to
sell, improve customer service and cut costs by improving efficiency. Yet many
companies are still struggling when it comes to putting these concepts into practice.
Whether a customer is banking online, at an ATM or at the branch, interactions
should be seamless – both behind the scenes and on the sales floor. Customers
should be able to access the same information regardless of channel, and
employees should have easy, organized access to all of the customer information
they need to cross-sell.
Multichannel sales and delivery
While only one-third of all customers prefer to use multiple channels, the majority of
heavy bank users seek multichannel access.21 Banks are increasingly motivated by
the opportunity the branch presents as a key part of an integrated delivery system;
the branch is expected to continue to lead all other channels in multichannel delivery
solution spending.22 But the true value of the branch network can be realized only if it
is supported by a multichannel delivery strategy and architecture. Branches should be
integral to multichannel marketing and sales. To enable branch personnel to pick up
on leads generated by other channels – and to make referrals across channels – they
need advanced customer profiling systems that track multichannel interactions.
Branches in bloom IBM Global Business Services10
Successfully transformed branches will share a multichannel delivery architecture
that coordinates activities of all channels, often built around Internet technologies
(see Figure 5). This architecture should leverage common business logic so that
individual channels handle customer transactions identically. Customer knowledge
systems should be designed to capture and derive valuable business information
from customers’ behavior patterns to enable more personalized customer
experiences. Data and business process workflows need to be reengineered to
promote a consistent experience for the customer and allow the reuse of application
functionality, thus lowering costs over time. A component-based architecture allows
the bank to assemble and configure enterprisewide, scalable business systems
quickly, recycling components across delivery channels.
Figure 5. The levels of a multichannel functional architecture.
Staffed channels
Access services
Role-specific channel applications
Common business logic
Call center
External data
Teller/Platform
ATM PhoneOnline
Source: IBM Institute for Business Value analysis.
Customer information,
history
Wireless
Self-service channels
Channel interaction
Enterprise integration External Partners
Core business processing Business analyticsIntegrated customer view
Data warehouse
Branches in bloom IBM Global Business Services11
CIBC cuts cost with component-based architecture23
CIBC upgraded its multichannel architecture to a Web-based solution that incorporates a repository of
reusable software components, which are preassembled into banking processes to support tasks such
as opening an account or applying for a loan, and banking modules to support retail banking services
conducted by bank personnel, including tellers and platform and lending representatives in the branch.
The component architecture enables the bank to assemble and configure scalable business systems
more quickly, and at 40 to 80 percent lower cost than traditional development methods. In the second
phase of its project, CIBC was able to reuse components for its Internet channel. The bank’s ultimate goal
is to reuse components across all distribution channels.
Technology and process improvements
Pairing the right technologies with process reengineering helps branch staff focus
their time on customers, instead of transactions. Most banks are already working
to upgrade or replace disparate and obsolete branch systems. In addition, reengi-
neering and streamlining branch processes to increase service efficiency, reduce
manual and paper-based intervention and enable better integration across channels
is crucial. But to remain competitive, banks need to take technology to the next level
in the branch.
Branch personnel should be equipped with advanced sales tools including mobile
devices, knowledge management and scripting applications, as well as staffing
optimization and performance monitoring applications that enable more effective
sales efforts. Banks should select and train front-line personnel who possess techno-
logical aptitude and the ability to multitask. By making technology training and
knowledge a part of the incentive programs mentioned earlier, banks can motivate
employees to learn about and take advantage of advanced technologies.
PNC Bank enhances its front line with lobby management24
PNC Bank is leveraging its Front-Line Excellence solution to provide plans and approaches for front-line
staff to greet customers entering the branch, as well as techniques for directing customers to the most
convenient service point to meet their immediate needs (e.g., phone, Internet, kiosk, ATM or branch
staff). Benefits include US$1.0-1.7 million in annual cost savings and US$2.7 million in annual salaries
that can now be reinvested in sales and services activities. In addition, customer-reported service
satisfaction increased 10 to 20 percent in branches practicing lobby management.
Branches in bloom IBM Global Business Services12
Migrating transactional, or low-value, customer interactions to self-service channels
and refining process automation allows branch staff to spend more time selling
products to customers. Self-service terminals, including online banking kiosks and
advanced functionality ATMs, should be designed for obvious and easy use to
encourage customer acceptance of advanced technologies. Having bank personnel
available to provide preliminary assistance with self-service options also fosters
increased adoption of these advanced technologies.
BOA fosters greater self-service25
Bank of America recently piloted teller-assisted self-service (TASS) kiosks that allow a single teller
to serve multiple customers simultaneously, in some of its branches. After authenticating their
identification, customers can help themselves to almost anything, except cash. Tellers step in at the end
of the transaction to disburse cash or cashier’s checks, or to provide assistance with the machines when
necessary. Even though it actually takes longer for the customer to key in information than it would for a
teller to do the same thing, the involvement in the task makes for a shorter perceived waiting period.
Test yourself
To get the most out of your branch transformation investment, you first have to ask
the right questions. A well-integrated branch strategy hinges on the knowledge that
success is not wholly dependent on any one aspect of change – be it physical
presence, people or IT proficiency – but on how these aspects are blended to meet
banks’ goals. The following questions are designed to help banking executives begin
to formulate a more fruitful approach to branch transformation.
Figure 6. How fruitful are your branches?
Do your employees have the skills and incentives
necessary to build a sales culture in your branches?
Do you have the branch designs and product
offerings necessary to optimize revenue?
Do you have the in-branch tools and integrated multi-
channel capabilities needed to optimize branch productivity?
Does your branch provide a customer experience that
supports sales goals?
Do branch design, processes and technology effectively support branch offerings?
Are branch employees equipped with the customer data and tools they need to
sell effectively?
Source: IBM Institute for Business Value analysis.
Branches in bloom IBM Global Business Services13
Conclusion
Is there an overarching, prescribed strategy for making branch transformation
investments worthwhile? Unfortunately, no. It’s not as easy as an innovative lobby
design. Nor is the answer a slick IT application. In order to draw out the most value,
banks must choose the precise blend of physical presence, products, people and
IT proficiency for their particular needs, as well as the needs of the customers they
want to target.
Emulating market leaders can offer banks a modicum of success. However, to gain
competitive advantage and achieve a fruitful return on investment, banks must blend
the elements of branch transformation to not only generate more revenue, but to
serve customers throughout the customer lifecycle as well. Branch banking must
also become a fully integrated aspect of multichannel banking where customers
can receive exceptional in-person service from knowledgeable, well-equipped
bank personnel.
To understand how your company’s branch transformation investment can become
more fruitful, please contact us at [email protected]. To browse through other
resources for business executives, we invite you to visit:
ibm.com/bcs
Branches in bloom IBM Global Business Services14
About the authors
Sunny Banerjea is the Global Banking Industry Leader for the IBM Institute for
Business Value. He can be contacted at [email protected].
Kimberly Hedley is a Senior Consultant for the IBM Institute for Business Value. She
can be contacted at [email protected].
John White is a Managing Consultant for the IBM Institute for Business Value. He can
be contacted at [email protected].
Contributors
Michael Blum, Partner, Global BTO Banking Leader, IBM Global Business Services
Daniel W. Latimore, Partner, Executive Director, IBM Institute for Business Value
Bryan Lee, Retail Banking Solutions Management, IBM Global Financial Services Sector
About IBM Global Business Services
With consultants and professional staff in more than 160 countries globally, IBM
Global Business Services provides clients with business process and industry
expertise, a deep understanding of technology solutions that address specific
industry issues, and the ability to design, build, and run those solutions in a way that
delivers bottom-line business growth.
Branches in bloom IBM Global Business Services15
References1 Spieker, Ronald L. "Bank Branch Growth Has Been Steady – Will It Continue?"
FDIC. August 2004.
2 "Bricks-and-Mortar Banking Bias?" emarketer.com. October 2004.
3 IBM Institute for Business Value analysis of public company information.
4 Bell, Richard. "U.S. Branch IT Spending Projections: 2003 to 2007." Financial
Insights. July 2003.
5 Shevlin, Ron. "What Influences Consumers’ Choice of Banks?" Forrester Research,
Inc. October 2004.
6 Walsh, Ekaterina O., Bill Doyle and Tom Watson. "Which Channels Financial
Consumers Use." Forrester Research, Inc. March 2003.
7 Taylor, Keith. "Counter Those Teller Problems." thebanker.com. December 2003.
8 Ibid.
9 IBM Institute for Business Value analysis.
10 "Branch Renewal for Community Banks and Credit Unions." Datamonitor.
June 2004.
11 De Paula, Matthew. "With Rising Teller Turnover, Banks Aim to Retain." U.S. Banker.
January 2005.
12 Stoneman, Bill. "Attitude Adjustment," BAI Banking Strategies. October 2002.
13 McAdam, Paul and Ayjay Nagarkette. "Front-Line Performance Gap." BAI Banking
Strategies. December 2004.
14 Spieker, Ronald L., "Bank Branch Growth Has Been Steady – Will It Continue?"
FDIC. August 2004.
15 "FYI: An Update on Emerging Issues in Banking." OTS Summary of Deposits. FDIC.
October 2004.
16 Heller, Al. "Banking on Banks for 2004 and Beyond, In-Store Branches Are Poised
to Become and Integral Part of the Supermarket Offering." Supermarket News.
January 2004.
17 Bell, Richard. "Washington Mutual’s Occasio: Branch of the Future." Financial
Insights. March 2003.
18 De Paula, Matthew. "With Rising Teller Turnover, Banks Aim to Retain." U.S. Banker.
January 2005.
Branches in bloom IBM Global Business Services16
19 Slater, Sherry. "Telling numbers: Banks set quotas for sales pitches." The Journal
Gazette. May 10, 2004.
20 Gilstrap, Michelle. "Banking with a smile: Umpqua creates a community-centered
bank." Display & Design Ideas. Volume 16; Issue 11. Gale Group. November 2004.
21 Anderson, Doug. "Back to the Future: Bank Branches in an Electronic Age."
TowerGroup. June 2002.
22 "Retail Bank Delivery Channel Spending in the United States: 2001-2005."
TowerGroup. December 2001.
23 Bell, Richard. "A Bold Step for a Big Bank: CIBC Branch Renewal." Financial
Insights. July 2003.
24 "Front-line Excellence: Lobby Management and Market-based Staffing at PNC
Bank." Demos Solutions. http://www.demossolutions.com/pdfs/case_study_
pnc.pdf
25 Schneider, Ivan. "Here today…Everywhere tomorrow." Bank Systems & Technology
online. October 28, 2004.
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Focused Enterprise”. It will expound of the base concepts discussed there and
describe how the theories and practices apply to one of the most vital customer-
focused operations for companies today: the contact center. Readers should
reference the IBM handbook “Advocacy in the Customer Focused Enterprise” for
more detailed descriptions of the concepts presented here.
I. Do we need to do things differently?
An opportunity for customer experience transformation in
the contact centerSmart companies want to build strong bases of loyal, profitable customers who are
also advocates for the company. In order to drive sustainable, profitable organic
growth and competitive differentiation, organizations must better integrate and
align the way they treat customers with their sales and service strategy at each
touch point of the relationship, especially those that occur within the contact
center. Achieving this is a continual, uphill battle as competitors increasingly
raise the stakes. Customers’ expectations continue to rise – largely through their
experiences with a vast commercial world – but also through unrepentant brand
marketing and well-publicized customer-focus programs. Given the vast number
of experiences companies have to manage – over channels, employees and vast
customer bases – the key challenge is to create the right experiences at the right
time in a real-life operational model.
The Crux of an Interaction: The Contact Center
Call it what you will - the call center, interaction center, the 800 number, the
service function – the contact center is a critical area where the customer’s
experience and attitude towards the company are developed. Historically limited
to agents and phones, the modern contact center manages a wide array of
critical customer interactions including voice, e-mail, online interaction, self-
service assistance, and collaboration. The modern contact center also serves
‘customers’ other than consumers, including business partners, employees, and
field agents. As CRM strategies run broad and deep, from data analytics to
campaign development, the contact center truly is the place where the rubber
meets the road, where companies make or break their customer strategies in real
I. Do we need to do things differently?
Opportunity for customer experience
transformation in the Contact Center
II. What is the new prescription for
the customer experience? New
view of the contact center customer
experience
III How do we operationalize this new
view? Operationalize contact center
experiences through a customer
focused enterprise
IV. How do we get it done? Get it “done
right” in the contact center through
new IBM project technique
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application. It’s where the customer experience happens, where many interactions
takes place, and where a high percentage of the total transactions finally occur.
It shouldn’t be surprising that the contact center is at the visceral core of the
customer focused enterprise.
Drivers of rising customer’s expectations in the modern contact center
There are many reasons why customers expect more and companies feel they
must improve. Some of these reasons include:
Companies’ brand marketing and promises often show or describe the treatment
customers can expect via the contact center: happy, helpful, empathetic agents;
a caring ear; a concerned partner; a multi-channel interaction with little hassle
a lot of smiles. These images and messages have become commonplace in brand
marketing.
Competitors increase their marketing, sales and service options and capabilities
continually, usually for the better. It has only been matter of years since such
basic service options as accessing account balances over the phone or receiving
e-mail updates were unheard of. Now they are expected. Companies introduce
new services constantly, and customers get used to them quickly.
Customers’ interactions within one industry drive change in others. If a cable
company offers help on the phone, why shouldn’t the power company? Customers
develop their expectations from their general commercial experience and often
expect all service providers to rise to the same baseline.
Customers’ experience and familiarity with multiple channels and methods of
communication is rapidly increasing. Within the past decade, e-channels went
from nerd-niche to general usage. Mobile phones went from a business luxury
to a must-have for everyone from children to the elderly. The mix of interaction
technologies will only grow in complexity and sophistication going forward.
Knowledge of customer-focused programs at large companies (e.g., “customer
is job #1” type slogans) has permeated the minds of consumers. Customers
know their value to companies, and hold their providers to the standards they
proclaim.
Customers’ embrace and backlash of new technologies and outsourcing. It seems
that many of the new advancements in the contact center can bring both cheers
and groans to a finicky customer base. Despite being able to do more faster,
customer often bemoan IVRs, primitive voice recognition, and other capabilities
that cause confusion and frustration. Offshore outsourcing is often pegged as a
social mar on television. Customers want accessibility, features and flexibility, but
are sensitive to change.
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Other factors driving change in the contact center
It’s not just the customers and competitors driving change in the contact center.
Other drivers include:
Expansion of CRM and other customer and growth focused initiatives within
the company. CRM isn’t new and it isn’t going away. The customer is still a
top priority and a key strategic focus, and contact center management is at the
center of this drive.
Executive mandates to reduce costs and improve efficiency are a routine within
the contact center. The contact center’s commonly viewed position as a cost
center further drives these mandates when times get tight. At its base, the
contact center seems a calculable formula of seats, calls and resources, all of
which are the focus of reduction, streamlining, or automating.
New technologies and new application of technologies, including the use of
IP-enabled contact centers, voice recognition, and sophisticated routing drive
change from the bottom-up. Leading edge companies understand the current
technology opportunities and leverage them to obtain their customer and cost-
reduction goals.
The imperative to integrate channels, including the contact center, web, IVR,
kiosks, and the retail branch becomes more important as customers demand
more choices and companies look for ways to increase usage of lower cost self-
service channels. Channel integration delivers multiple benefits, including
improving customer experiences, building more efficient processes, gathering
better data, and reducing redundant or wasteful business operations.
The imperative to further integrate the contact center with other key business
functions, including sales, marketing, distribution, and supply chain to enable
better customer experiences, improved operational performance, and a tighter
ship from back-office to the front. The contact center is often the default
mouthpiece and ear for the company, reinforcing the need to integrate across
business units and functions.
The emergence and popularity of outsourcing and offshoring, like a
technological innovation, is an important shift in a contact center’s ability to
provide live customer assistance at a manageable cost. The procedural and
organizational implications, though are daunting.
The need to acquire new and more extensive customer data drives change
within the contact center, a key creator and user of customer data.
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Accountability and proof of return on investment will always affect the decisions
of contact center leadership. In many ways, the contact center has always been
scrutinized for performance and ROI, given the amount of trackable data and
metrics that are available. These, though, typically only shed light on the cost
equation. The modern contact center plays a strategic role in managing the
customer, one that directly and indirectly affects lifetime value, retention rates,
and advocacy. As managers progress forward, they will have to understand and
embrace new ways of accounting for their contribution and value within the
enterprise.
Understanding customers is key
Regardless of how change is driven in the contact center, it’s clear that companies
must take outward action to influence their customers’ perspectives. A problem
is created when contact centers take action without really understanding their
customers. According to IBM research, 79 percent of business leaders have only
a generalized or superficial/absent understanding of their customers. As a result,
we could interpret that business leaders act on an operational basis or “how can
we handle customer interactions more efficiently, or less expensively?””, versus
acting on factors that customers indicate are most valuable.. It is not surprising,
therefore, that 74 percent of business leaders make decisions based upon what’s
right for their operations instead of what is right for both them and the customer.
By acting without understanding the customer, and focusing mostly on tactile
and operational attributes, companies are taking a ‘shot in the dark’ at their
customers, often investing big money in contact center capabilities that may miss
the needs of the customer.
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It’s too much! There are too many interactions to be perfect all the time
Companies today are meeting their customers in a lot of different places under a
lot of different rules – online, over their devices, through channel partners and,
of course, in all the old favorites places, such as the phone and the store and at
the tradeshow and in their homes. Many of these interactions are managed by
the contact center. The largest organizations can have thousands or millions of
customers interacting at all times of the day, often being treated by thousands of
independently-minded representatives and agents. Considering the many variables
impacting each of these transactions, companies have their hands full trying to
deliver service to customers with any level of consistency, much less with any
degree of perfection.
Constraints hindering the delivery of perfect experiences include:
It’s too expensive to try to ensure that every contact center interaction is
perfectly aligned to each customer at every point of contact. What’s the point of
advocacy if it lowers profitability?
Customers are not created equal. Each company has its mix of customers,
some which are very profitable and some that are much less profitable. Often
described with the 80-20 rule (80% of revenue is produced by 20% of the
customers), the logic prevails that very profitable customers should receive
impeccable service, while service costs should be managed for customers who
are less profitable. In some cases, companies actually lose money serving lower
value customers.
There are not enough of the right kind of resources within any organization to
meet every customer interaction. Besides, there is an equally pressing imperative
to reduce and refine resource usage and expenditures.
There’s not enough time to build out every possible service and treatment option
for every type of customer. CRM projects are probably already stacked up in
queues at most businesses.
Things are going to change anyway, long before “everything” is rebuilt or
reconfigured. Most serious transformations can take years at large organizations
and the benefits are needed today. Savvy competitors aren’t waiting for others to
catch up.
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Being perfect all the time is impossible
given the enormity of the customer
interaction load companies have today.
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The new challenges and opportunities
IBM understands the emotional imperative of the customer experience and
believes that this area will be a key battleground for companies’ competitiveness
in the future. Two questions summarize the relevant challenges and
opportunities:
How do companies operationalize in their contact centers the advocacy-building,
higher-order emotive attributes that brand messaging often promises, such as
being caring, attentive, considerate, or empathetic?
How can companies deliver competitively superior customer experiences within
their contact centers using a realistic, achievable operational model?
The contact center as a customer experience test bed and
logical starting pointIn most organizations, the contact center is the logical starting point for
customer focused initiatives. It simultaneously provides a unique environment
of control while also providing a significant and meaningful base of customers
who represent a full spectrum of needs and interactions. The contact center
often manages its interaction from start to finish, providing a good basis to
test interactions in their entirety. The contact center is also a data-intensive
environment, where most interaction attributes can be tracked and monitored in
a controlled fashion.
In this sense, companies should look to the contact center as an ideal ‘test bed’
for customer focused initiatives. Companies can test concepts and programs, fine-
tune them, quantify their benefits, and make cases for their wide-spread adoption
throughout the enterprise. Listed below are some reasons why the contact center
should be the test bed for customer focused initiatives:
A high percentage of total transactions occur in the contact center for most
companies. In some cases, companies interact with clients almost exclusively
through contact centers and self-service channels.
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It is a closely managed, structured environment. Unlike retail or branch
channels, the contact center is typically centralized in some fashion, staff
undergo similar training, have access to similar tool-sets, and geographical
disparities are minimized. Additionally, the contact center is more data-intensive
than retail or partner channels, and thereby more measurable. Internal
environmental factors include:
Supervisors actively coach and mentor agents to drive the appropriate
behavior
Quality monitoring and recording technology is used to capture actual
employee performance and customer interactions
Performance metrics are routinely measured
Customer satisfaction feedback is received
Segment strategies are easier to deploy. Customer treatment may be customized
and personalized by different segments, either by customer preference or
customer profitably/value. While it is possible to achieve this in face-to-face
channels, it is often much more difficult to implement since transactions often
begin without authentication and customers can view and request differentiated
treatment with little regard to company strategy. The contact center can be a
valuable testing ground for segment strategies since customers can be identified
by calling number, special access numbers can be distributed (e.g., a 800
number for premier customers), authentication is typically always a first step
(enabling the customer to be identified systematically), and through sophisticated
routing technologies that can deliver the right customer to the right service
schema.
Current techniques can be incomplete in addressing the advancing customer
experience imperative given the enormity of the customer operation at large
organizations. But there is a way. The following sections describe how companies
may successfully create differentiated customer experiences within a realistic and
achievable operational model by creating a customer experience framework.
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CRM straight talk: Business
leaders know it’s important to build
advocates through the right customer
experiences. The problem is that its
getting harder and harder each day to
do so. The customers’ expectations
are growing from competitors, their
commercial experience and brand
messaging. To complicate matters,
customer experiences have emotional
characteristics which companies haven’t
been good at delivering. Given the
enormity of experiences companies
have to manage – over channels,
employees and vast customer bases
– the key challenge is to create the right
experiences at the right time in a real-
life operational model. Because of its
inherent qualities, companies should
look to the contact center as a logical
starting point and ‘test bed’ for customer
focused initiatives.
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II. What is the new prescription for the customer
experience in the customer focused contact center?
A new view is needed for delivering customer experiences. One that builds a
competitively superior experience while prioritizing the resources, the competitive
shelf-life and investments of the company’s CRM programs. This new view has
several key characteristics:
Knowing what we are trying to accomplish: A deep understanding of which
interactions have the most importance to a customer and which ones play a
part in changing the customers’ attitude toward the company, also known as
“moments of truth”.
Delivering tactile and emotive performance, or in other words, delivering
both physical aspects and more psychological aspects of service: The customer
experience cannot be boiled down to merely who called first and which agent
is available to serve them. The importance of different aspects varies by
interaction, so knowing the value of customers and when to focus on the tactile
or emotional (or both) performance is key.
Prioritizing customer operations: Focus resources and timeframes toward those
attributes that will change the customers’ mindset, while leaving attributes that
don’t affect the customers’ attitude on the drawing board.
What we are trying to accomplish: Create advocacy among customers
Changing customer experiences is about changing their interactions and their attitudes
The goal of delivering successful customer experiences is to create advocates.
Advocates are superior to merely satisfied customers. Advocates spend more,
remain customers longer, and refer new customers. On the flip side, antagonists
and detractors of a company destroy value. It should be the goal of customer-
focused contact centers to create advocates, or at least begin to migrate customers
toward advocacy.
Advocacy is largely a measure of a customer’s attitude towards a company.
A customer’s attitude towards a company is developed during the series of
interactions (e.g., service calls, web visits, transactions, advertisements, etc)
they have with the company. In the most general terms, a customer’s attitude
is improved when their expectations are met or exceeded, and is harmed when
expectations are unmet. The amount that their attitude changes is determined
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by how important or intrusive the interaction is to the customer. Some interactions
are vital, others are unimportant enough to almost be ignored. Understanding these
distinctions enable companies to prioritize where they focus their energies. These
concepts are addressed in detail in the CFE handbook under separate cover.
Customer Experience Framework
The entire scope of managing a customer’s experience can generally be described
by the categories listed in the framework below. This framework can be used
to dissect, understand, and assemble a meaningful analysis and vision of the
customer experience. It is used as an ‘outside-in’ view, meaning that it focuses
on what the experience is, not necessarily how the company may actually fulfill
it operationally. This framework is discussed in detail in the Customer Focused
Enterprise, and is presented here with its specific contact center implications.
The following are Customer Experience Categories and the corresponding Contact
Center Implications:
1. Interactions
Customers increasingly expect their information to be available for every
interaction, regardless of channel, over the course of their relationship. This
means if they call on Wednesday, the company is aware of the online order they
placed on Tuesday, and if they resolve a problem this year, the company knows
about it next year. These expectations remain true as they speak to different
agents, different departments, different product groups, and different channels.
The operational implications stretch well beyond the purview of the contact
center, and become a data-sharing and experience definition imperative for the
entire enterprise.
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2. Channels and touchpoints
Customers are growing to expect the same level of service over the web, over the
phone, and through other channels (devices, ATM, branch, store). This means
providing consistent treatment and ‘one company-one voice’ type messaging
across the phone, e-mail and non-contact center locations. Customers will expect
to be able to choose which channels and media through which they interact, and
will expect services comparable to those that they receive from other companies.
3. Tactile performance
Tactile performance in the contact center has been a long-standing historical
focus, with many of the tactile measurements being the primary indices of
the contact center’s operation. Think average wait time, average handle time,
abandonment rate, etc. In customer terms, these are represented in more
qualitative measurements such as “they answer quickly” or “they were able
to resolve my problem efficiently”. Customers expect service to be quick and
efficient. Customers expect most transactions, from a simple address change to
fulfillment of products, to be fulfilled instantly (or at least with the appearance of
instantly). Customers may expect agents and service to always be available or to
possess very specific skills. The tactile attributes of a contact center are an ever-
changing and ever-growing mix, and understanding them and perfecting them
itself is a massive and complex undertaking.
4. Emotive performance
Historically, emotive performance with the contact center (e.g., how friendly
agents are, how empathetic they are, how considerate they act, how well the
express concern for customers) was perhaps understood as a function of the
unique personalities who were staffing individual agent seats. The brand
messaging that companies blasted through the airwaves may have told of ‘caring
service’, but its execution was often a sore point for customers and contact center
managers alike.
Not surprisingly, the traditional tools and approaches to emotive performance – hiring
the right people, training, incentives and communications – are the same ones needed
today. The difference today is that greater sophistication is required to understand
the most important emotive events, and then to find techniques that explicitly and
formally address these important interactions. Companies must take charge of the
emotive equation and not delegate it to the chance behaviors of individual agents.
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Sound tough? It is. But the new competitive battlefield will be one where companies
make good on the emotional needs of the customers when it counts.
5. Products and services
A traditional mindset may think of the contact center as a place for problem
resolution, billing questions, or account information. In many industries, the
contact center must also deliver on key features of products and services.
In financial services, it’s the ability to transfer funds or make a trade over the
phone. In pharmaceutical retail, it’s the ability to renew a prescription or find
health advice. In telecom, it’s the ability to upgrade service packages and change
feature options. In most verticals, it’s the ability to purchase over the phone with
expert product advice and assistance without needing to ever visit a store or a
branch. Soon, the online product experience will connect with the contact center, as
live service options augment web service and web product fulfillment. As with other
“cross-pollination” of contact center expectations, features that were once enabled
for the sake of service will be expected on the products and services front.
6. Customer expectations by segment
While customers may not think of themselves in terms of ‘segment’, they do
differentiate their own needs and expectations based on location, the amount
they spend with a company, or the tenure of their relationship. For example,
business customers using bulk agreements with a wireless provider may expect
differentiated treatment in comparison to individual wireless customers.
The segment challenge presented to contact centers is by no means simple: there
are intriguing plays to differentiate service by customer value while they also may
set expectations for differentiated treatment in both positive and negative lights.
Segmentation allows contact centers to extend better service, say with live agents,
to high-value customers, while migrating less profitable customers to self-service
channels. The operational implications can be challenging as companies manage
expectations over segments, identify customers at the point of interaction by their
segment, and successfully deliver multiple modes of differentiated treatment
simultaneously.
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Meeting the challenge: The appearance of perfection
While being perfect may be impossible, prioritization enables companies to
appear more perfect, more often and more frequently. A simplified recipe for
success can be thought of this way:
Manage key interactions to improve the customer’s attitude
toward a company. This is achieved by:
Fix where the company fails on a promise
Delight customers when it makes sense (and cents)
Right-size delivery when an interaction doesn’t matter
By understanding how an experience is built and applying the simple concepts
above, companies can overcome common challenges to improving the customer
experience in a realistic operational model.
The customer experience… Prioritization allows…
It’s too expensive Focus on what really counts
There are not enough or Smart deployment of resources, the right kind of resources including low-cost and automated options
There’s not enough time Realization of benefits and competitiveness in the short term
Things are going to change Improvement of the here-and-now anyway without spending on programs that will be obsolete before they are finished
Note: there is a more discussion of prioritization and “moment of truth” analysis
under separate cover in the CFE Handbook.
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CRM straight talk: The customer
experience is more than a boil-down of
hard metrics about speed, availability
and information. These tactile
performance measures are critical, but
real progress in shaping the customer
experience has to involve the emotional
aspects. The key to understanding
emotional success is understanding the
customers’ needs and expectations. By
doing so, contact centers can understand
what the most important interactions
are: the moments of truth. By prioritizing
delivery on these key moments, contact
centers can deliver the right experiences
at the right times and build customer
advocacy within a realistic, achievable
operational model.
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III. How do we operationalize this new view?
Operationalize customer experiences through a Customer
Focused Enterprise (CFE)
The “Customer Focused Enterprise” describes a company that understands the
entire customer experience and delivers against it to build customer advocates
while deploying resources effectively and smartly. The CFE embeds new
competencies and practices into the contact center that make leading-edge
customer experience strategies viable and operational. The IBM CFE model is
composed of six top-level characteristics, shown below:
Listed below are more detailed descriptions of the six characteristics of the CFE.
Embedded in each competency is a discipline of innovation that defines and
shapes change within that function.
Customer authority
Customer authority is the consumer driven, “outside in” approach to designing
customer interactions that delivers against the specific levers that drive optimal
customer behavior. Contact centers that understand customer authority are able
to approach their customers in ways that build advocacy through knowing the
mindset of their customers, while simultaneously understanding the value of the
customer to the enterprise.
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Listed below are some of the key competencies and indicators of customer
authority:
Enterprise-wide Customer Authority
Theme
Contact Center Considerations
Customer intelligence is the ability to
capture customer information that creates
true insight, including interaction data,
transaction data, preference information,
demographics and contextual information.
Companies that develop customer
intelligence are able to get to the truth
about what customers feel and desire,
and are able to convert that truth into
actionable insight.
Customer information forms the
foundation of real-time intelligent
messaging in the contact center. By
delivering critical customer information
(such as contact history, profitability,
recent purchases, and customer value)
to the contact center agent during an
interaction, a stronger bond can be
formed with selected customers and
higher profitability can be achieved.
Real-time intelligent messaging allows
contact centers to personalize its services
for those customers it determines to be
most valuable. It can also be proactive,
automatically generating emails or instant
messages to keep customers informed on
order progress, service restoration, or can
even be used to acknowledge birthdays,
anniversary dates, etc.
Multi-dimensional segmentation is
used to define customers by narrow
segments that cut across life stage,
product usage, behavior profile and
profitability. This segmentation is used to
understand customers, and is also applied
to programs, operations, and specific
customer interactions.
Contact Center managers have a valuable
corroborator in their cases for improving
the contact center: the customer. Capturing
and expressing the ‘voice of the customer’
can be a critical tool in framing operational
decisions and building cases for change in
the contact center.
The contact center is capable of capturing
valuable information from its customers
by means of post-contact or real-time
customer surveys. Most customer surveys
fall short of their potential, however, by
limiting questioning to feedback relating
directly to the contact itself. Creating an
effective customer feedback strategy will
result in the capture of information that
can have be used to better understand
customer needs, leading to higher
customer satisfaction and advocacy.
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Feedback loops are formal efforts
to learn about customers’ opinions.
Smart companies use them – at both
the individual and aggregate levels
– to redefine business processes and
programs. Customer focused enterprises
find it important to prove to customers that
their feedback is being used, validating the
interchange with customers.
Within the contact center, data can
be captured in real-time during the
transaction by means of quality monitoring
or recording, or with formal collection
means such as surveys. In each case, the
perspective of the customer is gathered
to understand their expectations and drive
improvements within the contact center.
New customer research methods are used
to understand customer needs, emotions
and behaviors. These techniques improve
upon conventional means such as surveys
and focus groups to capture more realistic,
more truthful behavior, and measure actual
outcomes when they occur.
Perhaps one of the most interesting
developments in contact center research
is the analysis of voice data for tonal and
emotive response. This type of analysis
determines stress levels, frustration levels
and other emotional metrics that can be
combined with the contextual information
happening during the interaction for new
insight. At an analytical level, managers
can gain new insights into their customer.
At the transactional level, action can be
taken during the interaction to mitigate
customer dissatisfaction or capitalize on
delight.
Customer dialog
Customer dialog refers to a business’s ability to communicate and transact with
customers intelligently and responsively during each interaction, on a customer-
by-customer basis. This is achieved by capturing discrete behavioral triggers,
secondary events and patterns. This information is used to generate specific
communications, then route these communications in a seamless multi-channel
fashion based upon sophisticated business, channel capacity and customer
preference rules.
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Listed below are some of the key competencies and indicators of customer dialog:
Enterprise-wide Customer Authority
Theme
Contact Center Considerations
Real-time intelligent messaging elevates
every communication to a meaningful,
smart interaction through the application
of relationship attributes, life event
information and data driven insights.
Companies use intelligent messaging to
transform generic, misfired or ineffectual
communications into relationship-building
events and new sales opportunities.
Customer information forms the
foundation of real-time intelligent
messaging in the contact center. By
delivering critical customer information
(such as contact history, profitability,
recent purchases, and customer value)
to the contact center agent during an
interaction, a stronger bond can be
formed with selected customers and
higher profitability can be achieved.
Real-time intelligent messaging allows
contact centers to personalize its services
for those customers it determines to be
most valuable. It can also be proactive,
automatically generating emails or instant
messages to keep customers informed on
order progress, service restoration, or can
even be used to acknowledge birthdays,
anniversary dates, etc.
Voice of the customer is a process
for understanding and integrating the
customer’s perspective in designing
interactions. Smart companies encourage
customers to provide feedback and
insights. This information becomes a
representative of the customers’ needs,
and can be the impetus and champion for
transforming business operations.
Contact Center managers have a valuable
corroborator in their cases for improving
the contact center: the customer. Capturing
and expressing the ‘voice of the customer’
can be a critical tool in framing operational
decisions and building cases for change in
the contact center.
The contact center is capable of capturing
valuable information from its customers
by means of post-contact or real-time
customer surveys. Most customer surveys
fall short of their potential, however, by
limiting questioning to feedback relating
directly to the contact itself. Creating an
effective customer feedback strategy will
result in the capture of information that
can have be used to better understand
customer needs, leading to higher
customer satisfaction and advocacy.
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Realistic segmented treatment is the idea
that different customers should be treated
differently, based on their profitability to
the company and their preferences. While
this is a powerful strategy, companies
must verify that these tactics are possible
with real life resources, as some programs
may be difficult to deploy within complex
organizations.
What happens when twenty callers are
in queue and the last in line is your most
valuable customer? What happens when a
‘gold’ member is recognized on the phone
but not e-mail? These types of challenges
can transform a well-intentioned service
strategy into a customer breakdown if
not handled correctly. Contact Center
Managers must be able to successfully
operationalize segmentation strategies to
insure that their most valuable customers
receive consistent treatment, regardless
of which method of communication they
choose.
Leveraging capabilities such as Skills-
Based and Data-Driven Routing, contact
centers can transform the traditional “first-
in, first-out” method of routing calls to
one that delivers higher customer value by
providing preferential, more personalized
treatment to valuable customers, matching
them to the agent best equipped to serve
their needs.
Event-based rules are instructions on
how a company should react to specific
customer stimuli. In other words, when
X happens, we should do Y. Companies
should define and maintain a library
of event-based rules that trigger
communication events based on customer
and company actions. By doing so,
companies can respond to customers
consistently while acting towards specific
goals and objectives.
A leading edge tool for the contact center
is the rules engine (reactive and proactive).
A rules engine can be used to determine
how each transaction (phone, email, web,
etc.) is handled based upon the value
placed on the client and specific contextual
information of the interaction. For instance,
a rules engine can be used to personalize
a customer’s voice menu options to only
include those choices for products and
services they use. Or, the rules engine
can be leveraged to determine which
agent should handle a specific customer’s
transactions. Proactive, events-based
rules engines could also be used to predict
the reason for a customer’s transaction
using information such as recent order
activity, open trouble tickets, etc. As part
of a customer dialog, contact centers are
the natural starting point for use of event-
based rules engines.
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Active recovery and service-to-sales is a
discipline of treating service inquiries as
an opportunity for relationship-building.
Companies should establish a service-
to-sales approach that senses sales
opportunities during inbound customer
contacts and effectively “earns the right”
to transition to sales activities. The best
businesses are proactive in service
recovery, creating advocacy-building
moments out of potential breakdowns in
the customer experience.
As the owner of a high percentage of
service transactions, the contact center
is the natural place to resolve customer
issues and to leverage opportunities
to convert service requests into new
sales. This prospect has long garnered
excitement among marketing and sales
heads who understand the opportunity for
new revenue.
Contact center managers understand that
service is a much different skill set than
sales. Therefore, equipping agents to
handle both, and teaching them how to
transition from one to the other gracefully,
is a tall order. From the customers’ view,
a botched service-to-sales pitch can
seem cheap and intrusive. Contact center
managers must examine the skills and
technologies needed for this provocative
concept, and understand the operational
pitfalls as well as the prospective upside
opportunities.
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Integrated execution
Integrated execution is how companies deliver a consistent experience and allow
intelligent, cross-channel execution of customer interactions. Different channels are
used to enable a consistent interaction based on customer needs, preferences and
profitability.
Listed below are some of the key competencies and indicators of integrated
execution:
Enterprise-wide Integrated Execution
Theme
Contact Center Considerations
Method of choice allows customers to
personalize and choose the channels
they would like to use for interaction
and receipt and delivery of information.
This competency takes more than just
recording a customer’s preferred channel.
It requires being able to act on it with every
communication, and having the proper
channel infrastructure to do so.
Using customer feedback, Contact
center managers should champion and
take ownership of ‘method of choice’
programs, sharing important interaction
data with marketing, sales and others.
Organizationally, the contact center must
help establish explicit rules and integral
programs with other channel participants
to determine what channels are offered in
response to customer needs and whether
every customer has access to every
channel.
Multi-modal interaction is used to
enable customers to conduct interactions
and dialog over multiple modes of
communication, such as voice, data,
or different channels with ease and with
consistent treatment, data availability,
and quality of experience. Companies
able to do this meet their customers’
expectations, minimize frustration, and are
able to present a consistent and unified
experience.
One of the most recent developments in
cross-channel coordination is the capability
for the customer to request and receive
live agent assistance while exploring the
web site. This multi-modal interaction is
more than a gimmicky new feature, it helps
reinforce and improve the customer’s self-
service experience by delivering back-up
support when it is necessary.
In addition to helping drive self-service
transactions, new and more complex
transactions can be added to the contact
center mix by leveraging collaboration
capabilities, where agents can physically
assist web self-service clients in filling out
forms, receiving requested information in
real-time, etc.
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Distributed delivery is when companies
deploy resources to reduce the need for
central infrastructure and thereby lower
costs. Companies should use this as an
opportunity to meet customers according
to their preferences to improve the
customer experience. This phenomenon
is being driven by the adoption of remote
technologies (e.g., web, devices) of
both customers and distribution channel
employees, such as sales reps.
With more sophisticated IP technology,
the wide-availability of broadband, and
the opening of offshore labor markets,
the contact center has more opportunities
now to distribute their workforces
geographically than ever before. Contact
centers can ‘de-centralize’ their operations,
virtually routing calls offshore or to work-
at-home agents as easily as they do on
campus.
In the consideration that other labor
forces are distributed (such as field agents
working from home), companies will seek
to ‘centralize’ services previously available
at the branch office. These services may
open new audiences to contact centers as
they begin servicing employees as well as
customers.
Demographic circles are a method of
understanding customer preferences by a
geographical or demographic preference,
such as culture and nationality. Companies
provide customers an experience that is
consistent with their own habitats, such
as matching accents or speaking patterns.
This is increasingly more important with
distributed workforces.
This opportunity to address the
demographic needs of customer is easily
managed within the contact center domain.
Foreign language-speaking callers may be
routed to the appropriate agent based upon
their language preference. For example,
callers who are identified as Spanish
speakers can automatically be routed to
a Spanish-speaking agent without asking
them the question each and every time.
Partners as an extended view is the
concept that external partner businesses
require consistent customer information
and customer treatment policies in
order to fulfill the company’s customer
focused strategies. Companies should
treat partners as an extended view of the
enterprise by equipping them with the
ability to emulate the brand, operations
and skills of the company to become
transparent to the customer.
This issue and opportunity cannot be
boiled down to simply technology,
infrastructure or resource combinations
like other programs. Getting partners to
adopt service standards or maintain a
consistent customer experience typically
requires critical policy agreements,
service level agreements, organizational
cooperation, and even solidarity on
customer vision. At a tactical level,
investments have to be made in data
integration and sharing, and co-mingling of
training, skills, and technology.
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Solution experience
Solution experience is about delivering needs-based solutions (combinations of
products and services) that contribute to the holistic customer experience, based on
the wants and needs of the customer as understood across the enterprise.
Listed below are some of the key competencies and indicators of solution
experience:
Enterprise-wide Customer Authority
Theme
Contact Center Considerations
Needs-based orientation is the practice
of building products and services around
the specific requirements of individual
customers. Companies can transform
sales and product delivery to address the
needs of the customer, delivering custom
solutions versus one-size-fits-all products
when it makes sense to do so. This can
create stronger ties to the company,
increase switching efforts for customers,
and create higher satisfaction among
customers.
As in product development, the live
sales, service, and support functions of a
company’s value proposition should also
be tailored via a needs-based orientation.
The contact center manager should come
to the table with the same enthusiasm
for custom solutions as the product
development team, and should advocate
for delivering a needs-based orientation
through the contact center.
Development of customized, needs-based
solutions are limitless possibilities, and
include customization of client menus
(designed to address only those products
and services they use), transaction routing
to requested agents, proactive outreach
calling, customized queue messages, etc.
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Bundles and up-sell sophistication
combine products and services to fulfill
multiple needs of the customer while often
providing them other advantages, such
as integrated access or price discounts.
Bundles and up-selling can be a win-win
for companies and customers. Customers
get more while companies increase their
hold on the customer, capture a larger
share of wallet, and gain deeper insights
into the customer’s behavior.
Converting service to sales, cross-selling
and up-selling new products and services
to customers has enormous relevance in
the contact center environment today. By
identifying a product or service weakness
that is the source of customer frustration,
and offering the customer an upgrade
or bundle that will better meet their
needs, agents can improve the customer
experience and make a significant revenue
contribution at the same time. Although
these specific interactions are not
appropriate for all customer interactions,
knowing when and how to capitalize upon
these opportunities is critically important.
The key is to have formal systems
and processes, including knowledge
management and training, that enables the
agent to identify a sales opportunity and
then empowers them to close the deal.
Human performance
Human performance is how companies foster sustained employee commitment
and engagement to allow employees to better meet personal and organizational
objectives, all while better serving and being advocates for the customer.
Listed below are some of the key competencies and indicators of human
performance:
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Enterprise-wide Human Performance
Theme
Contact Center Considerations
Agile workforces provide employees
with human development progression
planning capabilities based on personal
and lifestage objectives. Companies with
agile workforces are able to evaluate staff
at the individual, departmental, division,
and geographic levels, determine the needs
of the organization, and redeploy resources
smartly.
Arguably, agile workforces may be the
most significant operational shift in the
contact center in the past decade, perhaps
only paralleled (and, of course, enabled
by) the leaps in technology also seen this
same period. Outsourcing, for instance,
provides enormous benefits in speed,
capacity management, and cost control,
while mitigating internal constraints
and resource expenditures. At the same
time, these tactics are rife with their own
complications, such as data management,
process control, security and even public
relations backlash. Today, many contact
center managers are likely to have some
portion of their operations outsourced,
with further tests and plans for future
usage. There is no optimal solution
or combination of operational models
that fits each company, and the savvy
contact center manager understands that
outsourcing is a powerful tool that must be
balanced with the objectives and needs of
the company and its customers. With this
in mind, contact center managers must
take a strategic view of their operations,
incorporating agile workforce decisions in
their strategic planning and blueprinting
efforts, and not attempt to use outsourcing
as a complete, stand-alone solution.
Virtualization is another intriguing trend
impacting today’s contact center. By
configuring multiple centers to function
as one, deploying work-at-home agents,
and leveraging other non-contact center
resources available throughout the
enterprise, contact centers are able to
improve overall productivity, increase
their capacity to handle transactions
and improve their capability to respond
to periodic spikes in volume. The result
is improved customer and employee
satisfaction at lower cost.
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Cognitive-based change management
entails advanced methods for supporting
change that utilize psychological and
motivational factors. Companies should
utilize these new human development
techniques that move beyond traditional
skills and basic knowledge retention.
Companies that are successful in
this are able to obtain employee and
leadership commitment, engagement and
productivity.
It’s always been a challenge to get large
populations of employees to march to the
same drummer, regardless of backgrounds
or payscale. The fact that there is often
high employee turnover in contact centers
complicates this task considerably. The
best customer data-driven analysis or CRM
vision is useless unless it is consistently
executed on the front line.
These new training techniques were
made with contact center agents in mind.
By adding new training and behavioral
techniques to the skill developer’s toolbox,
contact center managers can find new
ways to direct how the agent behaves and
how effectively they deliver on customer
focused programs.
Role alignment is used to match the
right person with the right job, including
matching skills, aptitude, and personality.
Companies should use personality and
competency evaluations and tools to best
match employees with jobs that fit their
personalities and skills. These techniques
can be used in recruiting and to deploy
existing staff.
At the recruiting level, contact centers
should conduct employee personality
and competency evaluations to select
employees who are suited for the
particular style of service and interaction
the company requires. There are external
vendors who specialize in this form of
evaluation and recruiting.
At an interaction level, contact centers
can use sophisticated routing processes
to match the right type of interaction
with the right type of skill. This involves a
much deeper understanding of individual
skill sets and the ability to ‘systemize’ this
understanding within the routing process.
Personal customer commitment should be
generated among employees. Commitment
should go beyond cosmetic employee
slogans and be based on meaningful
motivation within the employees’ job. To
do this, companies must provide each
customer-facing employee with a personal
motivation to sustain a customer focus.
Gaining a personal customer commitment
among legions of contact center staff can’t
be reliably accomplished by ‘force feeding’
them mantras and directives. Educational
and motivational programs are required
to reinforce the commitment to serve the
customer. At the baseline, companies must
invest in development of employees who
understand the benefits of advocating
customers: revenue, company health, and
for the agent, a smoother, more effective,
and more satisfying workday.
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Parallel interest and rewards involves
creating motivations and incentives for
customer-facing employees that align to
customer strategies. Companies should
align the personnel interests of employees
with job roles and use customer-focused
metrics to measure success
Strong companions to education are real
rewards for customer focused behavior:
compensatory consideration, incentives,
career path, perks, and recognition. This
suggests a need for customer focused
metrics that are applied to the reward
process.
Identifying and addressing the personal
interests of agents is another path to
sustaining agent commitment to customer
causes. This involves a serious approach
to developing career paths and career
development. Although it won’t benefit all
types of agents, it does benefit the best
kind – those who demonstrate interest in
their careers and the customer. For the
company, it increases retention among the
best and most valuable agents, improving
overall contact center effectiveness while
mitigating the costs of replacing quality
employees.
Knowledge management and continuous
learning is required to direct and
increase human performance. Successful
companies enable resources to leverage
institutional knowledge quickly and
systemically, providing a basis for
continuous learning throughout the
employee population.
A beneficial application of knowledge
management is the delivery of intelligence
on demand, or, in other words, delivering
knowledge at the exact point it is needed
by an agent. Imagine an agent being asked
a question for the first time by a customer
and being able to expertly answer it
because it was delivered to her at the exact
moment of need using a sophisticated
knowledge-based system capable of
prompting answers based on the context
of the call. Although this vision has
been considered for some time, today’s
technology is finally making is a more
affordable, short-term reality.
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Customer-focused organization
Customer-focused organization entails how functional groups and lines of
business collaborate to fulfill customer-centric strategies and tactics. (for example,
adjust organizational boundaries and measurements to facilitate customer
segment-focused activity by redefining profit and loss [P&L] responsibility)
Listed below are some of the key competencies and indicators of a customer
focused organization:
Enterprise-wide Customer-Focused
Theme
Contact Center Considerations
A Segment-influenced operating model
involves the realignment of organization
boundaries and control structures towards
customer strategies. Companies should
redefine silos, divisions and organization
around customer segments so that
decision making can be made in the
interest of customer-focused strategies,
not short-term divisional objectives. To
do this, companies must place decision-
making authority in line with customers
and segments, versus the traditional
alignment against products and channels.
Corporate accountability, including
revenue attribution and budgeting, should
be placed under the management of
customer-focused leadership.
Intuitively, there is a natural bundle of
capabilities in the contact center that
logically seem like they should remain
under consistent leadership. This said,
real customer strategies will always have
difficulty taking root if they never hold
a true power seat within the enterprise.
The contact center must determine if its
operational organization will serve segment
leadership, or whether segment leadership
will be parsed out of the operational
leadership. In either case, a transformation
to a segment-influenced operating
model should be taken under serious
contemplation for both its power to make
effective change, and its real complexity in
effective management.
Cross-functional collaboration is often
necessary to enable many key customer
strategies, especially management of the
customer experience, the coordination of
channels, product bundling and solution
selling strategies, and brand alignment
programs. By enabling departments
and channels to collaborate on fulfilling
singular customer experiences and
customer strategies, businesses are able
to deliver on consistent experiences for the
customer.
In many organizations, the contact center
may be seen as a bureau or vendor to
sales and marketing. In others, they are
the peer that delivers customer service.
In any case, the contact center must be
a willing participant in cross-functional
collaboration with marketing, sales, self-
service, e-channels, and other departments
to fully realize most CRM and customer-
focused initiatives. At the tactical level, this
may involve setting jurisdictions, service
level agreements, cross-functional teams,
and formal problem solving processes.
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Customer leadership and alignment
is putting real representation of the
customer and the customer objectives in
the executive suite. To do this, companies
often establish top-level executive
leadership that advocates for and has
authority to serve the customer. Examples
of titles may be Chief Customer Officer,
Chief Loyalty Officer or SVP of Customer
Experience.
At the contact center level, there may
opportunities to extend this notion to
senior and middle management within
the contact center operation. These roles
may be strategic in terms of defining new
customer programs and advocating for the
customer, or tactical where the customer-
aligned staff have daily responsibilities tied
to the customer focused programs.
Innovation discipline
Innovation should fuel the change across the entire CFE. Companies should
establish an environment that promotes a systematic ideation capability to
cultivate the intersection of insight with invention. Companies need to increase
collaboration both within their enterprises and with partners to know when
incremental (or monumental) change is beneficial to the entire business model
and to act on that change in a meaningful way.
CRM straight talk: Delivering successful
customer experiences needs to happen
across many different disciplines
within a contact center. Customer
focused enterprises embrace six key
disciplines: customer authority, customer
dialog, integrated execution, solution
experience, human performance
and customer-focused organization.
Innovation must be injected into each of
these disciplines on an ongoing basis as
companies grow and improve.
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IV. How do we get it done?Get it “done right” through new IBM project techniques
The CRM done right framework for developing sustainable, successful CRM
operations is illustrated below. It has five main interlinked components that
describe key steps to completing transformation projects at large companies. A
complete, detailed account of this approach is available in the IBM executive
handbook, “CRM done right: executive handbook for realizing the value of CRM.”
All phases are critical to building customer experience operations and each phase
has different considerations, strengths and obstacles as they apply to customer
experience operations specifically.
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Success factor Summary description Contact Center Considerations
A. Realize your CRM Value case for change
This is the answer to the question “why are we doing this?” The value case for change is the format by which management establishes projected benefits of the project, initiative or program and sets the baseline costs and business implications of making the change. It also defines:- Justification for moving ahead with the change- Areas of highest ROI- A framework for prescribing, supporting and monitoring subsequent actions – including when to make incremental “sense and respond” course corrections and when to make significant, strategic shifts
Contact center leadership has historically been adept at calculating costs and margins, being able to track tight knit metrics and account for infrastructure costs right down to headsets and carpeting square footage. The more challenging aspects of the contact center value case will be in understanding the upside benefits of customer advocacy and its resulting effects on loyalty and new revenue.
B. Identify and prioritize your CRM value propositions
Here we define the specific strategies that create value for the various stakeholders in our CRM equation, including the company’s interest, customers, employees and partners. We consider what imperatives are important for business success such as competitive threats, financial pressures or new opportunities. Essentially, we define at the outset how value will be created by our efforts.
There are new techniques for designing CRM and customer value propositions within the contact center. Use the customer experience framework shown in section II to develop a full view of a contact center value proposition, inclusive of emotive and tactile performance. Understand key ‘moments of truth’ as a way to understand and prioritize the vision.
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C. Design your new CRM operational blueprint
By designing the blueprint, the company chooses the end-state operational vision for the new CRM operations. This includes determining what the specific experiences will be for stakeholders, determining how the company will deploy resources, how new technologies and infrastructure are built, how new process are designed and creating a comprehensive strategy for managing the change.
The contact center blueprint defines the future state of the new contact center. Blueprinting challenges for contact center leadership include the inclusion of newer technologies such as IP telephony, voice recognition, and online interaction. It also should include innovations in staffing, including many of the ones listed in section III, such as outsourcing, virtualization, and cognitive based change management. Use a component-based business architecture approach to maximize effectiveness in design.
D. Construct your multi-generational roadmap and implement your solutions
The roadmap is the plan the organization creates to realize the blueprint of the CRM operating model. It turns the blueprint into a prioritized, sequence of time-fixed workstreams (also known as projects) that are implemented at a rate that the organization can handle and manage successfully. The multigenerational roadmap, by nature, defines projects that contribute value and ROI on their own, as well as building toward the long-term vision. This duality enables organizations to realize ongoing business value while making necessary interim changes and course corrections.
View the contact center as the place to find early results and benefits for broader CRM initiatives. Use the contact center as controlled test bed for new initiatives, proving the benefits of customer focused programs and making the case for enterprise-wide adoption.
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E. Build support for your CRM efforts and stay on track through sponsorship, governance and change management
By building support for your CRM efforts, you verify that the organization stays committed throughout the deployment of the new operations. Here we answer the question, “Is everybody on board?” Building support for CRM efforts helps ensure that projects and transformations are measured and directed toward their goals. The organization engenders cooperation and collaboration, leadership consensus and a formal policy for making decisions and guiding the efforts. Additionally, the employee population is shepherded through the change.
At the employee level, adoption and change will often be the most challenging for contact center leadership in comparison with other departments in the enterprise. Contact centers have large staffs that have significant daily contact with customers. Transforming the customer-touching staff is arguably one of the most critical transformations that must occur for successful CRM initiatives.At the departmental level, the contact center should seek to both enthusiastically participate in, and when they can, lead customer-focused initiatives.
CRM straight talk: Developing a
new perspective or vision for better
customer experiences is only the
beginning. Successful companies must
embrace a structured and purposeful
means of change to transfer customer
experience ideals from the drawing
board to real life operations. The
“CRM done right” approach provides
a sound, structured, and proven path
for organizational transformation,
from securing agreement on a
comprehensive vision, to confirming
commitment throughout multiple
implementation phases
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ConclusionCompanies ready to move forward with improving their customer experiences
have significant challenges ahead of them, but also stand to make significant
gains. Creating a Customer Focused Enterprise is a significant and worthwhile
undertaking that cannot realistically be rolled out across an organization all
at once. Establishment of a test-bed, one that leverages the strengths, control
and flexibility available only in the contact center, allows an organization to
try out and adjust its customer strategies in an ideal setting, thereby increasing
its prospects for a successful enterprise-wide implementation. By employing a
rational customer experience framework that prioritizes resources according to
the impact of particular customer interactions, the Customer-Focused Contact
Center can build achievable operational models that create customer advocates
and, simultaneously, validate strategies and practices that may be replicated
throughout the enterprise.
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ContributorsAbout IBM Global Business Services and the Contact Center Practice
IBM clients – businesses worldwide, across industries – are today reaping the
rewards of a self-sustaining approach to CRM that enables them to accurately
assess their strengths and weaknesses, calculate risks, control investments,
manage change and set reasonable expectations from the start.
Contact Center Optimization improves the efficiency and effectiveness of contact
center operations. It covers inbound and outbound, sales and service contact
centers and their related self service channels.
With 5,700 consultants serving thousands of clients across the globe, IBM offers
a wide spectrum of contact center-specific services, positioning us as a strategic
partner to our clients.
Contact Center Strategic Consulting
Systems Integration
Telephony Systems
Self-Service Applications
Desktop and Support Applications
Contact Center Outsourcing
IP Contact Center Transformation
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IBM Global Services
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Produced in the United States of America
08-06
All Rights Reserved
IBM and the IBM logo are trademarks or
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Other company, product and service names
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