How To Drive Sales Using The Customer Buyer Journey

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Buyers are becoming more knowledgeable and it is re-shaping the roles of sales and marketing professionals. What is the buyer journey and how can you leverage it to increase your sales? Why should Advisors care about the new buyer journey? In this e-book, you will discover:

  • • What is the buyer journey?
  • • Strategies to define your client and prospect journey
  • • How understanding the buyer journey can accelerate sales
  • • Actionable steps you can start using tomorrow

Download the eBook today!

Emerging Technologies and The Future of Customer Engagement

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Over 4.75 billion people worldwide use at least one mobile device. This widespread acceptance has dramatically changed the way brands engage with their audience. People are always accessible. This accessibility allows brands to use mobile channels for marketing and communication, enabling real-time messaging to specific people.

The future will inevitably hold more technological breakthroughs that fundamentally change the way humans operate. Marketers need to ask themselves how they can make full use of new technology solutions, as they may end up growing to become a “force of nature.” At one point in time, brands struggled to see the potential in social media platforms such as Facebook and Twitter. That’s changed. Today, over 50 million businesses use Facebook in one way or another. In 2016, these companies spent a combined $26.885 Billion (USD) on Facebook advertisements. These technology platforms are here to stay.

But the mobile device and social platforms are not unique. Any technology with widespread adoption will change the way businesses connect with their audience. The ubiquity and versatility of the mobile device have allowed businesses to be creative with the mobile channel. Therefore, the big question is: How will emerging technologies affect the future of customer engagement?

1. Augmented Reality (AR)

Augmented reality (AR) is a technology that superimposes computer-generated imagery on a user’s view of the real world. The technology takes your location and builds a virtual world where you can digitally interact with real-life things that are around you. That means that something in front of you in real life (such as a bench in the park), will also be in front of the “digital version” of you. AR allows a computer-generated image to be added to that park bench, enabling you to see both the bench and whatever is laid on top of it, whether it be an animated monster or information about how to purchase that bench.

In 2017, AR is still in its infancy, with very few commercially successful applications of the technology to date.

Pokemon Go, an augmented reality game created by Niantic and the Pokemon company, introduced the average consumer to the technology. As businesses and individuals continue to work with the technology, successful commercial applications will continue to be developed.

There are still some things need to be worked out for AR to enter the mainstream. Wearable devices that can overlay graphics into the user’s field of vision need to be developed. Using a smartphone to access AR features may still be too much work for the average person to adopt the technology fully. Once the required infrastructure for the wearable technology is in place, nothing can stop AR from taking off.

Augmented reality has a larger number of non-entertainment applications compared to virtual reality (VR). AR can be used to overlay graphics into real-world situations, melding physical and digital spaces into one.

So how will AR affect how businesses engage with customers and how will it influence the overall customer experience?

From graphics overlaid on real world images (and video) to immersive “worlds” that seemingly change the way buildings and other objects look, the possibilities are endless. The technology is already being used in games such as Pokemon Go. It’s only a matter of time before another non-entertainment industry begins to adopt it.

There are several potential applications for AR, including applications that can increase customer awareness and motivate sales.

A financial advisor could use future AR applications to place a picture of themselves and their contact information near their real world office. That would allow anyone using the technology (whether it be through their smartphone or another AR-centric wearable) to see information about the business while walking past.

A retailer could use AR to showcase their products around their brick-and-mortar location. Potentially peaking the interest of those passing by and lead to an increase in sales. With AR still in its relative infancy, it’s hard to imagine what the fully mature technology will look like.

2. Artificial Intelligence (AI)

Artificial Intelligence (AI) is another technology solution that will play a key role in the future of customer engagement. Major tech companies are working to create more intelligent algorithms that can make complex decisions, and evaluate human language.

Artificial Intelligence (AI) is defined as:

“the branch of computer science concerned with making computers behave more like humans.”

There are many avenues for the future of AI, and no single method looks like the clear route right now. The end goal of AI researchers is to create machines or algorithms that can take real-world inputs such as “vision” or sound and make decisions based on those inputs.

The future of machines with human-level intelligence is still quite some time away, but it’s clear that the technology will eventually become a core component all nearly all commercial activities. Understanding what consumers want, and when they want it, will help businesses make more timely offers to customers, increasing satisfaction and revenue while decreasing friction in the buyer’s journey.

AI will lead to fewer interruptive ads, higher-quality content, smarter suggestions and smarter use of an organization’s resources. In combination, these effects can increase the cost-effectiveness of marketing and sales departments by reducing wasteful expenditures. 

Artificial intelligence can reduce friction in transactional relationships and streamline decision-making by using data to make offers that will be better received by customers. As the technology matures, AI will be able to target recommendations, content and offers to motivate action. AI solutions will eventually know more about your customers on a second-to-second basis than we ever thought possible. These recommendations will eventually allow real-time marketing to become a legitimate practice.  It will allow brands to engage their customers at critical moments in the buyer’s journey and recommend actions that will increase profitability and customer satisfaction.

3. Voice-Computer Interfacing

So far, 2017 has been the year of the digital assistant. Google has Google Home. Amazon has Alexa and the Amazon Echo. Microsoft has been working steadily to improve Cortana. And Apple has potentially the most famous of the bunch in Siri. Major tech companies are fighting to sell you an assistant that will recognize voice commands to help you interact with your computer (and other connected devices).

Continued improvements in AI will need to be made for voice-computer interfacing to reach maturity. Currently, most digital assistants have limited use-cases. The only applications and processes that are available are pre-programmed. For voice-computer interfaces to reach their full potential, improvements to their flexibility will need to be developed. Users need to be able to access anything they want through a voice request. Significant improvements need to be made to get to that point.

Consider the progress made by search engines over the last 20 years. With continued improvements, companies like Google have eliminated fraudulent and dangerous websites from their results. They have enabled users to search various parameters (images, videos, etc.), and are working to reduce inaccurate results from its rankings. 20 years from now, voice search could be just as ubiquitous and advanced as text searches are today. Marketers will need to prepare for voice-optimized digital properties.

Technology advances to new, unseen heights every day. It’s hard to imagine how these technologies will change the customer experience.

If you like thinking about the potential applications of emerging technologies, you might also like these articles:
10 Technology Trends & Predictions You Should Pay Attention to in 2017 (Part 1)
10 Technology Trends & Predictions You Should Pay Attention to in 2017 (Part 2)
6 Open Source Technologies That Changed The World
As always, thank you for reading. We would love it if you followed us on Twitter @VeridayHQ or LinkedIn here.

Worthy Intentions: How Customers View Your Actions

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How can financial service brands improve the quality of their relationships with customers? It’s a question asked by many leaders in financial services and is the major theme of a book called The Human Brand. The Human Brand, by Chris Malone and Susan T. Fiske, examines how customers perceive the actions of brands and how those perceptions influence relationships.

The book examines several strategies that brands can employ to improve the quality of their customer relationships. One such strategy involves something called the principle of worthy intentions. Acting with worthy intentions involves putting your customers’ best interests ahead of your own. Some businesses today struggle because they are viewed as greedy and untrustworthy. But, when a brand acts with worthy intentions, consumers notice and appreciate the efforts.

In previous articles focusing on The Human Brand, we examined the importance of warmth and competence. We will now discuss a brand that acts with worthy intentions, and as a result has grown a community around their brand. We’ll also see what your brand can do to demonstrate your worthy intentions to clients.

Worthy Intentions: A Lululemon Case Study

Lululemon is a yoga lifestyle and clothing brand founded in 2000 in Vancouver, Canada. In just 17 years, the brand has grown dramatically. It boasts more than 200 stores across North America and Australia; generating almost $1 billion of profit in 2016. How does a clothing company, in a very competitive industry, do so well? By acting with worthy intentions.

How has Lululemon acted with worthy intentions?

Firstly, they act with competence. They sell high-quality products (with high-quality fabrics) that their customers like to wear. Even in 2013, when the company had to issue a recall on some of their yoga pants for being too see-through, they took immediate action to rectify the situation. That action ensured that customers still saw them as the same competent brand.

Another major factor that contributes to Lululemon’s perceived worthy intentions, is that customers perceive the brand to be very warm and welcoming. Their brick-and-mortar stores are designed to be intimate and slightly messy to project a relaxed, lived-in look. They will also hem yoga pants for their customers right in the store because they want to give the customer the best experience possible. They’re demonstrating their commitment to putting the customer first by taking that extra step to satisfy customers while making them feel at home.

Building a community around each store is another essential part of their brand strategy, and helps project that warmth. They build loyalty by ingratiating themselves within their customer base. In this case, it’s local yoga influencers (yoga studios, instructors, etc.). By getting in with the studios and instructors, it brings more eyes to the product. Potential and current clients know who they are, and what they are about. And, if they’ve been treated well by the company, they will recommend it to others. They’ve established a trusting relationship.

What do these actions bring Lululemon?

Fierce loyalty from their customer base. Here are just a few examples of the success Lululemon has had thanks to their loyal communities of customers:

  • 95% of all purchases are made at full price.
  • Ranked 4th among retailers in revenue-per-square-foot in 2014
  • Increase in gross income of 42.9% since 2014.
  • Brand valued at $3.05 billion

Lululemon has done an excellent job nurturing their relationships with clients, and as a result has grown into an iconic brand with loyal, fanatical customers.

So what can you do?

1) Become more self-aware

Self-awareness is arguably the most important aspect of projecting worthy intentions to your customers. What do my clients need the most? What actions can be taken that will benefit clients? Are you treating my clients the way they want to be treated? What can you do to offer a better client experience? These are questions that, if regularly pondered, will empower your business to offer better experiences to clients.

Constantly considering how your actions, words, and decisions affect your customer’s experience ensures that your intentions are seen as positive by others.

2) Embrace change

If you aren’t willing to embrace change, your customers will question your intentions. Someone who acts with worthy intentions is willing to change if it is in the best interest of their customers. Change is a constant facet in today’s rapidly moving world. People expect change. A company that refuses to change will be seen as a relic of the past. Brands need to become comfortable with their customers being in control of the relationship.

If you can convey a willingness to embrace change that benefits your customers, your brand will be seen as having worthy intentions.

3) Look out for your customers best interests

Always look out for your client’s best interests, and they will appreciate it. Here’s a personal example:

When replacing my internet provider, the job of setting up a new modem took far longer than expected. However, the installer stayed at my house and finished the job, despite the fact that his shift was over before he was done.

The installer made decisions based on what would be in my best interests. Even though he had every right to say “I couldn’t get it set up” and leave, he didn’t. He ate into his own Friday evening to help me and my family set up our internet, and it was greatly appreciated.

By looking out for our best interests, this internet installer showed my family his worthy intentions (and developed some loyalty for his brand).

4) Project warmth

To show that you have worthy intentions, you absolutely have to project warmth to the client. Without warmth, your intentions will most likely not be trusted. More information about projecting warmth (and competence) can be found in our article: Projecting Warmth & Competence.

Takeaways for Financial Service Professionals

In financial services, having worthy intentions might just be more important than in any other industry. Due to the sensitive nature of a person’s finances, they often require an additional level of trust in their financial agent. People need to trust their financial service provider more than they trust the person selling them pants.

Financial services professionals need to be very self-aware as to how they are perceived by clients. If you project anything except concern for their financial situation, acceptance of their decisions, and confidence in your ability, you may lose the trust your clients have placed in you. Be willing to change your plans to accommodate the needs of your clients. If you constantly survey how you can provide better services to your clients, they will see that your intentions are good. 

Operating with worthy intentions should be as important to financial services professionals as projecting warmth and competence to your clients. It plays a huge role in how you are perceived by your client base and in turn, how loyal your customers are.

Thank you for reading! Acting with worthy intentions is an exercise in treating people the way they want to be treated by brands. If you want to see more articles like this one, follow us on Twitter @VeridayHQ!  

How Warmth and Competence Affect Customer Perceptions

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Warmth and Competence

Whether we recognize it or not, humans judge things and other people as soon as we come into contact with them. Immediate judgments, inaccurate as they may be, set the tone for how we interact with others throughout the course of our relationships.

When we survived as hunter-gatherers, this judgmental attitude allowed us to gauge threats and the intentions of others. Lions, tigers, and bears look menacing, and we immediately judge them as a threat, sending us into a fight or flight response. Rabbits and other fluffy woodland creatures do not invoke such feelings because they are cute and appear to be harmless. These animals seem like they can be trusted.

Those same judgments affect how we view other people. A baby-faced individual with a smile will be less threatening than a slim-faced stranger with a scar across their face. Humans are predisposed to trust people who convey warmth and good intentions, and it has served us well (as a species) over time.

Without the ability to accurately judge outside agents, including other people, animals, plants and miscellaneous threats, early humans would not have survived long enough to pass on their genes. The ability to make accurate judgments is a survival tool. Understanding the intentions of others allowed early humans to surround themselves with people they could trust, mostly based off of first impressions.

So, how do first impressions affect how consumers view businesses? Dramatically. There are two main characteristics that are most impactful on their perceptions: warmth and competence. These characteristics are the same ones that people use to judge outside agents and their intentions. For all intents and purposes, when discussing warmth and competence, other people are treated the same as businesses.

Competence and warmth are such fundamental judgments that even babies are able to recognize the warmth and competence of animated characters.

Warmth

Warmth refers to how trustworthy one seems. People immediately judge warmth based on a person’s facial features and how they carry themselves. It is one of the first criteria that people judge you on. Soft facial features, slightly surprised or happy expressions, and baby-faced individuals tend to quickly gain trust.  People also associate members of their particular ingroup with warmth. They are much more likely to view someone similar to them as having warm intentions.

In business, warmth reflects a company’s intentions. Warmer companies are seen as caring about the social consequences of their actions and are more trusted by the public. Hospitals, charities and most public services (such as the postal service) are seen as having warm intentions. Consumers are willing to give businesses that project warmth a chance to earn their business, but they must also show competence.

Competence

Competence is more difficult to judge than warmth, yet humans still make judgments on competence in around one second. Judging competence is based off a variety of factors.

Those with strong, dominant faces are immediately seen as competent, while those who appear weak and submissive are seen as incompetent. Other factors such as size, gender and ethnicity are also considered when judging for competence. It is important to note that these judgments are often wrong because they are made instinctively in a very short period of time and are based on stereotypes.

In business, you will be judged for competence based on how you have performed in the past. Any previous experiences a customer has with your business will be considered when judging your competence. Online reviews and ratings will also affect how competent your business is perceived.

Warmth-Competence Matrix

The combination of warmth and competence has a dramatic effect on how others view you or your business. Different combinations elicit different responses, fitting together in something called “the warmth-competence matrix. It is important to note that judgments are made from stereotypes, and while the judgment may be wrong, they still affect how individuals see those around them.

One’s place on this matrix has very little to do with how warm and competent they actually are. Your placement on the warmth-competence matrix focuses entirely on how you are perceived by those around you. You may be the single most competent person on the planet, but if you do not project that to others, then for all intents and purposes, your competence does not matter.

Warm-Competent

If an individual is seen as warm and competent, they are often admired. They are seen as trustworthy, carrying good intentions and able to achieve their desired results. Individuals in this segment of the matrix often become leaders, as they are both liked and trusted by others.

People will stereotype others as warm and competent if they are part of their particular ingroup, or are seen as close allies of the person who is doing the judging. People who fall in this group are often admired because they have positive (warm) intentions, and seem competent enough to execute on those intentions.

A warm-competent business is one that has trustworthy intentions and has proven in the past that they have the ability to perform. Companies that fall within this sector of the matrix are extremely successful, usually growing to capture a large share of their market. Companies viewed as warm and competent include Campbell’s, Johnson & Johnson and Coca-Cola. They have shown that they have respectable intentions and have the ability to deliver a positive customer experience.

Warm-Incompetent

If an individual is seen as warm and incompetent, they will be pitied. These are individuals who, while trustworthy, are seen as completely incapable of actually accomplishing anything of note.

The elderly, people with disabilities and women have historically been stereotyped as warm, yet incompetent. As a result, they have been treated with paternalistic behavior. Warm-incompetent individuals will be accepted as part of the ingroup, but not given any responsibility due to their perceived lack of competence.

Companies seen as warm yet incompetent have good intentions, but for some reason cannot deliver to their customers. Often these businesses are government funded, provide some sort of public service, and suffer from a lack of resources. Businesses in this sector include postal services, public transport and, veterans hospitals. People view these businesses as trustworthy, but unable to meet their goals.

Cold-Competent

People in this segment are looked at with envy because while they seem very capable, their intentions are viewed as cold. This elicits a negative response in people because they are jealous of the competence, but would use it to accomplish warmer goals.

People viewed as cold yet competent are usually associated with high-status, competitive outgroups perceived as high on competence but low on warmth. This leads to feelings of admiration and resentment.

Luxury brands are the most stereotypical cold yet competent brands. People see them as competent because they provide a high-quality product that people clamor for. They are seen as having less-than-positive intentions, but very capable of seeing out their goals.

Cold-Incompetent

Individuals in this segment are not well liked, and often held in contempt. Their intentions are seen as less than honorable and they are completely incapable of achieving their desired results. This is the worst segment of the matrix to grouped in with because people will not respect or trust you.

Immigrants, homeless people and poor people are often stereotyped as cold and incompetent because they are part of the outgroup and seen as having low competence. People seen as belonging to this group are often easily dismissed because the person judging believes they are wholly inferior.

Brands that are viewed as cold and incompetent should be concerned. It means that consumers don’t trust them in any capacity. Usually, it takes a colossal failure to end up in this section. After the 2008 recession, many consumers lost a great deal of trust for investment banks. The BP oil spill caused the company to lose consumer trust (especially because of the fallout from the spill). Brands also make appearances in this sector include well-known, profit chasing drug companies and tobacco producers. You do not want your brand to fall into this sector.

How Warmth and Competence Affect Customer Perceptions

Applications for Financial Services Professionals

The way that people judge individuals is the same way that people judge businesses. Your brand has human characteristics to your clients, with warmth and competence being two of the most impactful characteristics your business has. Businesses are judged on the same matrix that humans are judged on. However, there are differences between how businesses and people are judged, especially when it comes to financial service providers.

  1. You are the face of the brand

    While some financial institutions such as large banks and insurance agencies are seen as “faceless monoliths”, smaller, boutique institutions (such as advisory firms and credit unions), have a very tangible, human connection.

    An investment advisor, for example, is the main point of contact for their clients. People usually know their financial advisor on a first name basis. If you are a financial advisor, people will judge your warmth and competence and assign those values to your practice. Since you are the human face, you will need to project warmth and competence to your clients every time you meet them.

  2. Actions speak louder than words

    Projecting warmth is done by softening your facial features, smiling more and generally being amenable towards your clients. It is fairly simple but requires emotional intelligence to control what emotions you project outwards. Competence is far more difficult to project.

    Actions speak much louder than words. Don’t tell your clients what you will do with their finances, show them. Use case studies and projections to explain your abilities to clients. Be mindful of your actions, as they will be the ultimate indicator of both your warmth and your competence.

  3. Personalize everything

    By offering personalized content and communications you can show your client that you care about them, demonstrating your warmth. People prefer personal communications, so a handwritten note will garner more goodwill than a letter addressed to “Homeowner”. By pushing personal communications financial service providers can become part of their client’s ingroup, which we know will increase your perceived warmth.

By focusing on providing genuine experiences and solving client problems, your business can show clients that they are genuinely cared for. Respecting client’s time and providing tangible solutions to their problems are ways that financial service providers can show warmth and competence. 

The Human Brand

The Human Brand, a book by Chris Malone and Susan T. Fiske. Chris is a managing partner at a professional services firm with a focus on sustainable business growth and performance. Susan is a psychologist, focusing on how groups are perceived and the emotions they create at cultural, interpersonal and neuroscientific levels.

In the book, the authors explore a variety of topics, including how perceived warmth and competence impact how consumers view a business, how consumers view actions and intentions, and how brands can take actions to influence how they are perceived by the public.

The Human Brand is a must read for business owners and, C-level executives who want to take advantage of human nature to improve the perception of their brand. If you want to discuss the book, let us know on Twitter @VeridayHQ.

How Do Customer Experience Improvements Impact Revenue?

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This post was authored by Matthew Draper and originally appeared here on Liferay.com

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Without seeing detailed statistics concerning the impact of online customer experience (CX) on their company’s bottom line, many executives ask why it matters for their revenue goals. However, the online customer experience-revenue relationship has become clearer and clearer in recent years. Crucially, those who are still in the dark about the revenue benefits of customer experience improvement may be missing out on optimizing their company’s performance.

While common sense may dictate that there is indeed such a thing as CX-revenue relationship, better understanding this idea can help you make informed, impactful decisions about your company’s online presence. Recently, Mercury Insurance used Liferay to overhaul and consolidate their insurance customer portal. As a result, Mercury Insurance found that customer experience greatly improved, leading to higher ratings, reduced costs and many more positive effects. It’s just one example of improved customer engagement leading to measurable company benefits.

How Does Customer Experience Affect Revenue?

According to Forrester Research, good CX can lead to client retention, enrichment and advocacy, which all have loyalty-driven revenue potential. While there are many reasons why a client may terminate his or her services with a company, all businesses should prevent poor digital customer experience from being a cause.

But how will improving CX improve a business’ revenue?

While hard numbers on customer experience-revenue relationships can be difficult to come by, research done by Harvard Business Review shows there is a direct link between CX and annual revenue increase. Their survey polled customers about their experiences with both transaction-based and subscription-based companies. For transaction companies, clients who had the best experiences were shown to spend 140% more than those who were shown to have the poorest experience. For companies based around subscription services, it was shown that members who rated their experience at the lowest score possible only had a 43% chance of still being a member one year later. In contrast, those who scored their experiences at the highest ratings had a 74% chance of still being a member in a year.

In either case, it is clear that positive customer engagement meant a greater likelihood of higher revenue and happier clients who could advocate your brand to other potential clients.

However, not every customer experience manager takes long-term relationships into account when determining profits. But the widespread effects of happy clients should be part of every CX decision. If you are a CX leader attempting to make improvements in your company’s customer engagement, it is crucial that you tailor your investments to your brand’s unique needs, consider non-revenue benefits like happy customers becoming advocates and think about both complete CX overhauls as well as targeting the worst experiences reported by your clients.

Three Types of CX-Revenue Improvement Strategies

As detailed by Forrester, there are generally three types of online customer experience-revenue relationships. These show how a company should focus its initial CX improvement initiatives in order to see the greatest effects on your company’s revenue.

Broad Improvements to Customer Experience – In this strategy, efforts to improve CX can be applied across the board and in all types of interactions that customers have with your organization. Any individual aspect of customer experience improvement should result in improved revenue, but broad improvements may have the most noticeable results, as they will impact the largest amount of customers. This strategy relates to a linear customer experience-revenue relationship, which often affects companies like internet service providers, big-box retailers and auto insurance providers.

Focused Improvements on the Worst Customer Experiences – You may find that the greatest gains can be found in primarily addressing the worst experiences. Focus your time and energy on improving the worst customer experiences, which can likely be distinguished through customer surveys, feedback and records of complaints that your customer service team has received. By doing so, you can prevent customers from dropping your service and are likely to find the largest return on investment in your customer experience improvement efforts. This strategy relates to a relationship of diminishing returns between customer experience improvement and revenue, which is often felt by credit card providers, wireless service providers and airlines.

Focused Improvements on the Most Positive Customer Experiences – Further improving the highest levels of CX could result in the most dramatic revenue increases, while improving the poorest experiences will do less for your bottom line. Keep your customer experience improvement efforts focused on the most positive experiences seen by your business, which can likely be determined through positive feedback received in surveys. In doing so, customers who have a positive experience with your business will be encouraged to return time and time again, as well as become an advocate who can bring in additional customers. This strategy relates to an exponential CX-revenue relationship that often affects credit card providers, wireless service providers and airlines.

While these three types of revenue-impacting digital customer experience strategies should be individually tailored by each company that adopts them, they can be a helpful guide to what your business should first address. By focusing your efforts while improving CX, you can create a successful plan for optimizing customer portals and other forms of engagement.

So what is keeping some businesses from improving customer experience?

Many see improving CX as not being worth the cost. However, improvements have been shown to actually reduce costs due to needing to handle fewer complaints, as shown by information provided by Medallia. That means less money spent on fielding upset clients, happier employees who don’t have to spend all day handling complaints and more time available for optimizing internal processes and other forms of customer engagement.

These factors are vital in determining the long-term goals of a company and weighing the true value of online customer experience and what can be done to improve it.

How to Build Customer Loyalty in the Digital Age

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This post was authored by Matthew Draper and originally appeared here on Liferay.com

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The age of digital transformation has helped companies better understand and connect with their target audiences, with everything from dynamic content to page behavior insights helping to create a better picture of how individuals interact with companies. However, it has also greatly affected how loyal customers are to any given company.

Studies show that customers are more likely than ever to jump to competitors when they become dissatisfied with their current services, no matter how long they may have had a relationship with a company. Research from Vision Critical has found that 42 percent of Americans will stop shopping with a brand after only two bad experiences, making consistent high-quality customer experience critical in customer retention. While that lack of loyalty may mean ample opportunities for companies looking to expand their clientele, Harvard Business Review research shows that it costs approximately seven times more to gain a new customer than it does to retain one. As such, cultivating customer loyalty has both reputational and financial benefits.

But the question remains, how does a company improve customer loyalty in an age where loyalty is in short supply?

Encouraging Customer Loyalty Through Good Customer Experience

Changes in modern customer loyalty can be seen as an outcome of digital transformation, with more services than ever made convenient and easily accessible online. However, today’s customer often takes greater advantage of these online opportunities than the companies themselves, leading to today’s drop in customer loyalty. One of the largest factors in constantly shifting customer loyalty in the digital age is customer experience. Studies show that while pricing and quality of products may play a part in why a customer chooses one company over another, customer experience (CX) is the most important aspect in his or her choice.

The term customer experience can be applied to any interaction that a potential client has with your company, but there are several specific areas that can have the largest impact on loyalty. Brands can fight back against the waning tide of customer loyalty and its impact on client retention by improving the following areas of customer experience.

Ease of Access

Existing and potential clients should have the ability to quickly and completely reach your company’s services whenever and wherever they want. Today, customers expect to find and receive the online services they want without complications or delays. Without true brand loyalty, making your services easily accessible can make a major difference during a potential customer’s split-second choice between your company or a competitor.

Pre-existing loyalty may cause an existing client to go to you first, but not being able to quickly find/receive the services they want will easily send them to your competitor. Companies should consider how to implement omnichannel experiences in their services. In doing so, target audiences can smoothly and quickly interact online in both desktop and mobile, as well as in person, for a seamless experience that pushes them consistently and naturally toward closing a sale.

Supply Helpful Customer Service

The field of customer service is one of the most memorable interactions between your business and its customers. Customer service can include free shipping on items, customer loyalty rewards programs, return policies, promotional offers and customer support with issues concerning a product. According to research from Harris Interactive, 62% of U.S. consumers have switched brands in the past year due to a poor customer service experience. Good customer service not only reinforces to clients that your company cares about them, but prevents one of the biggest reasons for customer drop-off.

No matter the industry, customer service plays a crucial role in representing your brand in what are often the most decision-influencing interactions in any customer journey. Successfully demonstrating your dependability during these times can have a major positive effect on customer loyalty.

Distinguishing Your Brand Identity

Customers will tie your brand to the customer experience you provide. Should you offer a great experience, customers will attach positive feelings to your brand, but provide poor experiences and these failings will be tied to the brand instead. As such, it’s crucial that customer experiences align with your company’s larger goals so that good experiences not only gives clients a positive memory, but improve your brand’s standing in the public consciousness. For example, Amazon Dash buttons, which allow customers to reorder a product with the single push of a button, distinctly feature the brand of the company. In doing so, customers tie the brand to the simple, successful and satisfying experience they have had in using the button.

Forrester’s Customer Experience Index has found that a customer’s emotional connection with a brand has some of the strongest influence on loyalty. Cultivating that emotional connection and making it a positive one will yield short- and long-term loyalty in an age that has more competitors than ever before. In a sea of products and services from more brands than ever, having a positive emotional tie will help your brand distinguish itself from the crowd and feel less replaceable to clients.

Are Banks Failing at Customer Experience?

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Welcome to Part 2 of our two-part series examining customer experience in banking, through graphics from the Financial Brand. In Part 1 of this article, we discussed which channels consumers use to research various financial products (or services) and what banks believe the biggest benefits of personalization are. We also looked at why banks struggle to provide an excellent customer experience and examined the gap that exists between banks (who believe they offer an excellent CX) and their customers (who believe the same). In this article, we will take a look at how banks intend to enhance their service, which channels consumers deem most important and why technology has not been more widely implemented to improve CX.

5. Intentions to Enhance Service

Intent to enhance customer experience

On the graph from our previous article, Customer experience excellence: reality vs. perception, we saw how customers and firms rated their customer experience. Here we get a chance to see what financial service providers plan on doing to improve their CX. At the bottom of the list lies social media. Something that, while useful for communicating broad information, does not make for a better experience in banking. Branch transformation, something that has been a focus for decades, also lies near the bottom of the list. 

Enhancing mobile and online channels is by far the most common answer. This shows that omnichannel is a growing concern for banking providers. The attention to omnichannel is beginning only after FinTech firms have begun to apply pressure to traditional banking sectors.

The other three most common answers go hand-in-hand with providing an omnichannel experience. Staffing and training, leveraging new technology and providing better support are essential to combating FinTech firms. The reason that mobile and digital channels need more development than the traditional in-branch experience may be due to the decades’ banks have spent trying to perfect the in-branch experience. Digital and mobile channels are still relatively new and need to be improved upon, as they are the greatest strength of most FinTech competitors. This graph provides hope that banks are finally moving to the modern era.

6. Ranking Importance of Customer Experience by Channel

Consumers view of the importance of channels for customer experience

This graph examines how important each channels CX is for banking. It is very clear that in-branch experience and web experience are the most important channels to provide an excellent customer experience in. For now, in-branch banking is the most important delivery channel. This could be for a few reasons, one being that many demographics, such as the elderly, are still far more likely to come into a branch than to use any another channel.

Very few people think that phone banking is the most important channel in regards to experience. However, it holds a very strong number of votes for second and third most important channel. This could be because people still want to talk to a real person if they experience issues with the channel of their choice. Regardless of how much progress digital channels have made over the last decade, people still often feel most comfortable solving their problems with a human.

The seemingly least important channels are those that are accessed via a smartphone or tablet. This might be due to low adoption rates but may be due to the fact that smartphones are not people’s only channel for banking. Perhaps most people use smartphones to check their balances or to transfer money to friends. They are not trying to do complex tasks and therefore, are less concerned about a great CX. 

7. Obstacles to Offering a Personalized Customer Experience

Obstacles to offering a personalized customer experience

So, after we examined how banks and customers think of customer experience in finance, let’s examine what obstacles are in place to determine what is delaying FinServ firms from offering a personalized experience.

The main obstacles appear to be budgets that are not large enough to keep up with the ever-changing regulatory requirements and security concerns. This is par for the course with the industry. Often regulations and security concerns are at the front of most companies minds. Budget constraints come with the territory, as handling security issues can be extremely costly.

Other major obstacles include disjointed business processes, providing omnichannel experiences, outdated technology infrastructure and competition from FinTech providers. Many of these obstacles are issues that banks need to handle internally and have not been because of a lack of budget or leadership.

None of these obstacles should scare financial service providers from adopting more personalized CX, yet they do. Financial service firms need to improve, their viability as stand-alone businesses depend on it.

These graphs conveyed a lot of information about customer experience in banking. The first two graphs showed the perceived importance of improving various channels, both for banks and consumers. Banks plan on improving their mobile and online channels with a secondary focus on providing better training to employees. Customers should appreciate those efforts as they believe in-branch and online experiences are the most important channels in banking.

The final graph shows the challenges faced by banks when trying to offer a more personal experience. Banks have a wide variety of challenges to face, from a lack of funding to a complex regulatory landscape. These challenges will need to be successfully maneuvered in order to offer the personalized experience customers expect.

Did you find these graphs informative? How do you think banking will change over the next few years? Is customer experience the most important aspect of banking? What takeaways can other FinServ firms take from these graphs? Let us know on Twitter @VeridayHQ!

The State of Customer Experience in Banking by the Numbers

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Most people use more than one financial institution for their banking needs. It is easy to see the competition from other big banks, but many financial institutions struggle to quantify the threat from FinTech firms. Customer experience (CX) is a key factor in building and maintaining high customer loyalty, but this might be the area in which big banks struggle the most. If a bank provides an excellent experience to its customers, they will be able to maintain customer loyalty and keep money in their banks. So, how can you improve your CX? You’ll have to ask yourself some questions.

What channels do consumers want to use? What do banks think customers want? Why haven’t you provided the experiences that customers want? Is there a gap between the mindset of consumers and the mindset of banks? Today, we will examine these questions, using graphs from one of my favorite publications: The Financial Brand.

The Financial Brand is a digital publication for banks and credit union. The Financial Brand specializes in marketing and strategy. The publication creates many informative graphics about a wide variety of subjects. In this article, we will examine 7 informative graphs about customer experience (CX) in finance. We will take an in-depth at what insights they give us about the state of CX in banking.

1. Consumer Research Channels

Consumer Research Channels customer experience

This graph examines the channels used by consumers for researching and purchasing different financial products. I find it interesting and informative because of the stark differences in research channels, based on which product is being examined.

Websites, email and physical mail are all used disproportionately when searching for credit cards. What do all of these channels have in common? Perhaps the customer wants information without having to interact with an actual person. This could be the case because credit cards are a less-personalized product (compared to something like a mortgage or larger line of credit), meaning standardized rates may be published online.

Another reason that people may use impersonal channels when shopping for credit cards is because people often carry multiple cards. This is in stark contrast to chequing accounts and mortgages, where most people will only need one at a time. Since they are less of a commitment and you may have multiple credit cards, people won’t feel the need to come in-branch to learn about a product.

Mortgages are the one product that will motivate customers to call a bank. Again, it might be due to the fact that people generally only need one. They are more willing to visit a branch or talk to a real person because a mortgage will radically affect their life. A person is more likely to make personal contact with a financial institution when the solution they are looking for will dramatically change their life.

2. Benefits of Personalized Experiences

Benefits of Delivering personalized experience

This graph takes a look at what bank leaders believe the biggest benefits of delivering personalized experiences and content to consumers are. Using customer data to make the right offer at the right time is far and away the most common benefit. The second leading answer, improving cross-channel CX, shows the importance omnichannel experiences. If your cross-channel experience is slow, or subpar in any way, the customer will choose to get their products or services from elsewhere. They may even decide to do business with your competitors.

Many of these answers relate to communicating with customers more effectively. Aside from providing frictionless services at a lower cost and enabling flexible product/service bundling, improving communication is a key concern. Personalization in FinServ and all other industries will allow brands to communicate relevant information to their customers. This is something that every FinServ provider should aim for.

3. Funding Difficulties

Difficulties getting CX funding

This graphic shows the difficulties that FinServ firms face in getting funding for CX initiatives. Only 28% of firms rated the experience as easy or somewhat easy. The other 72% of firms found the experience difficult.

This speaks to the disillusionment of many FinServ leaders about the need to fund customer experience initiatives. As the competition from FinTech firms heats up, challenger banks become more established and traditional competitors begin to invest in technology solutions, CX will become a key differentiator when it comes to retaining your customers.

Would a customer accept a subpar experience on a social networking site? Would somebody use a very frustrating dating app? Why would they accept poor CX from their financial service providers?

4. Customer Experience Excellence: Perception Vs. Reality

CX Excellence: Perception v. Reality

These graphs really jump off the page for a few reasons. They are so telling of the systematic customer experience issues FinServ has. Over half of retail banks and wealth management firms believe that they provide an excellent customer experience. The issue is that their customers don’t agree.

It appears that leaders in financial services may have missed the mark on their customer experience estimates. Perhaps, the research process needs to be slightly tweaked. How can a firm over-estimate how good an experience they provide by 27%? That doesn’t even begin to approach the 41% overestimation by wealth management professionals. The answers by financial service professionals to this question call for financial institutions to take another look at these problems. 

These graphs show that leaders in financial services need to communicate with their customers better. They show that leaders in FinServ need to put more resources towards understanding their customers. Without putting the effort towards understanding your customers, you will be unable to serve them in a way that meets their needs.

This large a gap cannot be logically explained. Talk with your customers, ask them how satisfied they are with the CX you provide, engage with them. Not only will they appreciate it, but you can begin to bridge the CX gap from a realistic starting point.   

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This is the end of part one of our two-part series examining customer experience through graphs by the Financial Brand. Did you find any of these insights surprising? Let us know on Twitter @VeridayHQ. Next, we will be publishing part two, which contains insight into how banks plan on adapting to improve CX.