Don’t Bank on Customer Loyalty
If Banking Financial Services and Insurance (BFSI) firms want to stop customers leaving, they need to reexamine their customer experience (CX) starting with contact centre performance.
Over the past five years, BFSI organisations have experienced some of the highest customer churn rates of any business sector. According to the 2018 CallMiner Index, 32 percent of banking and 27 percent of property insurance customers have switched providers.
Should I stay or should I go?
According to research firm Foresee, even 20 percent of Gen Z customers have already switched banks at least once, while 25 percent of bank customers of all generations are loyal only because it’s hard to switch.
Consumers don’t choose their bank or insurer because of customer experience (CX). However, CX is the key driver when it comes to staying with a BFSI organisation.
“CX is the final frontier of differentiation, digital disruptors in Banking are making it easier and easier for consumers to switch” explains John Thompson VP, Business Development, Banking, Financial Services and Insurance at Sitel Group. “Every study highlights that consumers are willing to pay more and do more business with companies that offer the best experience. In other words, competing on price is now a thing of the past.”
A conservative estimate of the cost of acquiring a new customer across the banking and insurance sectors is $300 per person more than holding on to an existing client.
“It makes more sense to channel investments into improving your CX than invest in acquiring new customers,” points out Thompson. “Better CX will mean better customer retention. You’ll be able to increase their lifetime value and through greater loyalty convert them into potential brand advocates.”
Closing the CX gap
But where exactly should an organisation channel those investments? Customers are omni-channel in their everyday dealings, so any touch point could be a potential pain point that tips the balance. A full CX overhaul should be holistic in its approach, examining the miniature of customer journeys and the flow of information along each path, but the data shows that examining and reassessing your contact centre experience could have the biggest single positive impact.
According to CallMiner, when asked how likely they are to switch suppliers if they have a bad experience with a contact centre, 55 percent of consumers scored between seven and 10 on a zero-to-10 scale (where 10 equals extremely likely and zero equals not at all likely), and 16 percent scored 10.
Conversely, when asked how likely they are to stay loyal to a supplier if they have a good experience with a contact centre, 78 percent of consumers scored between seven and 10 and 32 percent scored 10.
Concentrating on the contact centre
“When they have an issue to resolve, the majority of consumers attempt to do it themselves via self-help channels,” says Thompson. “If a customer has reached for the phone, they’re either frustrated that self-service options are not up to scratch or the issue is serious. Either way it’s a moment of truth where the effects of a positive or negative outcome are amplified.”
In other words, optimising contact centre performance plays a pivotal role in stopping customer churn and in increasing CX. The latest Forrester research shows that if banks could improve their CX performance by just one point they could increase revenue per customer by $8.19. For a bank with 15 million customers that would be an extra $123 million in revenue.
“CX drives the outcomes that business leaders care about,” points out Thompson. “Underperform and your organisation will see a fall in customer retention, reduced wallet share and lower advocacy rates.”
From common call drivers and client history to customer sentiment and survey data. A contact centre contains a wealth of valuable information that if processed and analysed correctly can improve products and services, optimise self-service, lower average handle times and increase first call resolution.
And all BFSI organisations need to do to take full advantage of this information is to ensure they are working with the right BPO partner.
“For example, the right partner will be able to apply analytic solutions that bridge data silos and create integrated systems allowing contact centre agents to have all relevant information at their fingertips,” explains Thompson. “And likewise, that partner should be able to innovate by using the data to develop self-service and automated solutions that reduce customer effort and increase contact centre efficiencies.”
From developing chatbots and bespoke visual IVR solutions that delight customers, to customer journey mapping, data analytics and contact centre optimisation, Sitel Group has been helping BFSI organisations get closer to their customers for over 30 years.
If you are interested in learning why it’s time for banks and insurers to take transformation seriously, read our article on BFSI Digital Transformation.