What has made customers so ungrateful? How a fresh perspective on service delivery can deliver real customer satisfaction
Thanks to constant IT and sourcing innovation, and ever-present cost and competitive pressures, financial services businesses are finding ways to serve customers at lower cost and greater efficiency than ever before.
Service innovation and new products abound, but customers, for some reason, seem unimpressed.
There is no clear indication that financial services firms have suddenly forgotten how to provide customer service, or that customer expectations have changed radically. So what is going wrong, and how can customer satisfaction be brought back into service delivery?
The answer lies in the way that corporate priorities have diverged from those of customers, and the problems this creates in delivering customer services. To address these, businesses need to broaden their view of service delivery, and address the causes of customer dissatisfaction. This means:
- looking inside the organisation to improve interactions
- looking outside the organisation to improve the customer’s experience
- combining these views to maximise service quality, value, and reliability.
The inside view: improving internal interactions
The drive for ever-greater operational efficiency over the last two decades has naturally encouraged businesses to establish specialised functional capabilities: call centres, data centres, IT service management teams, printing units, product teams and so forth. An increasing number of these have been outsourced or offshored in search of better performance or lower costs.
This inward-looking focus on processes and suppliers leads to a ‘silo’ effect, as each area – internal or external – concentrates on what it needs to do to succeed. As a result, supplier areas have individually become efficient, reliable and resilient. Unfortunately, that internal focus means that the interactions between suppliers tend to be overlooked.
In contrast, customers only perceive services at the point of delivery. They are generally unaware of the chain of suppliers that need to co-operate successfully to deliver a service; instead, they care about the quality, cost and reliability of the service that chain delivers. Therefore the organisation needs to manage the performance of the service chain as a whole, not just the individual suppliers.
To overcome the disconnect between the priorities of the firm and its customers, financial services businesses need to begin managing for delivery: actively ensuring the successful co-operation of internal and external suppliers to achieve customer satisfaction.
The external view: understanding the customer’s experience
The first step in delivering customer satisfaction gains is to understand the written and unspoken service levels at work. If customers are expecting a faster, cheaper or more reliable service than they are receiving, they will be dissatisfied. Whether or not the service delivered meets the documented service level is largely irrelevant.
The second priority is to clarify who is involved in service delivery, and what they need to do and when, in order to deliver the correct service. This may sound simplistic, but when a major UK bank carried out a similar exercise it discovered that there was no-one in the organisation who understood the end-to-end service of paying direct debits.
Once the service is understood, the next step is to bring the supplier areas together to collaborate. The functional silo effect can be overcome by helping suppliers (who may be internal or external to the company, and may not even have realised that they are suppliers) to understand what they contribute to the service, and what other suppliers need from them in order to perform well.
Simply sharing information along the service chain can dramatically improve the customer experience. One bank found that payment failures caused significantly less dissatisfaction once it was able to give relationship managers immediate details of the payments impacted.
Maximising service quality, value and reliability
The benefits of this approach to financial services can deliver more than just satisfied customers:
Cost savings through reduced duplication: a delivery focus allows synergies between different supplier areas to be identified. Effective supply chain management can yield benefits of 10-20 per cent of supply chain costs.
Improved sourcing: commercial agreements can better align supplier incentives to customer satisfaction drivers.
Improved risk and incident management: if one supplier encounters problems, these can often be mitigated or reduced through the co-ordinated responses of the other suppliers in the chain.
Rapid delivery of new services: spare capacity and expertise within supplier teams can be exploited to minimise the cost and complexity of delivering a new service.
Adopting a delivery management approach allows a business to reconcile apparently conflicting corporate and customer perspectives. Customers gain cheaper, more reliable, more satisfying services. Companies gain services which are more resilient, cheaper to run and easier to change. Even after twenty years of ever more focused corporate structures, it should hardly come as a surprise that the customer is still always right.
