Measuring the value of customer experience in financial services

Wil Wylie • 10 min read

With increased Royal Commission pressures rocking the financial world, the ability to deliver better value to customers has never been more crucial. How do financial service businesses across all levels seek to provide a competitive customer experience? 

Delivering experience

Marketers, product owners, operations managers, and experience chiefs have become increasingly concerned with the following questions:

  • How can we align regions, business units, and individual functions, and share a collective view of what’s important?
  • How can we motivate each sub-group to come together, providing a competitive experience in areas of significant importance?
  • How can we assess what’s most important for customer experience (CX)?

We’ve seen clients invest lots of money into advanced CX measurement software, only to struggle when it came to processing and acting upon the resulting flood of data. On the other hand, we’ve also seen clients try to piece together CX information from disconnected CSV files and manual reporting channels. Of course, this fragmented data proves hard to align and provides very little meaning.

Our experience has shown us that there are five key ways in which businesses can ensure effective CX measurement. Following our guidelines, CX measurement can enhance decision making, offer clarity, and generate greater commercial impact.

1. Consider the customer

Any successful leader will find it much easier to measure CX success within their own area of the business, rather than across the complete customer journey. Although this approach is common, it limits the potential insights of CX measurement.

Working with a large Australian Health Insurance and other national organisations, we have always looked at ways to measure CX by asking customers what was most important to them. Using observational studies and detailed interviews, we ask customers to identify their most important moments during the end-to-end B2C (business-to-consumer) journey.

Using this quantitative information, we were better able to understand customer behaviour at key stages of the B2C engagement. We could then examine how these behaviours affected commercial outcomes.

2. Create a cross-functional CX framework

Large organisations will typically have a number of CX KPIs, reporting tools, methods, and frameworks. While these may be useful for an individual management function, without centralised CX management, each area will have a slightly different idea of what’s important to the customer. Because of these contrasting versions, large organisations find it very difficult to translate cross-functional insights into relevant actions.

To address this issue, we’ve created a unified framework for CX measurement. Making results more actionable, we’ve enabled assessment across multiple functions and levels. By outlining key relationships, cross-functional frameworks enable large organisations to take a much more cohesive approach to CX.

With a common operating picture, senior executives, managerial staff, and operations teams can develop a shared understanding of their firm’s CX issues, opportunities, and performance.

High-level KPIs provide executives with the means to measure company-wide CX priorities. More comprehensive targets allow managers to mark clear milestones when addressing those priorities.

These KPIs help managers ensure the effective allocation of investments. Operations teams can drill down even further, engaging with intricate metrics to action existing plans, create service delivery targets, and monitor team performance.

3. Improve your model using leading and lagging indicators

Using a carefully-designed and centralised CX measurement framework, companies can prioritise measures that best suit customer requirements and enhance business performance. To do so effectively, they need to leverage a wide range of data, on factors such as customer opinions, consumer behaviour, operational processes, and commercial results. They must also engage in robust analytics and econometric models that show correlations between CX performance and commercial outcomes.

When supporting one of our large American financial services clients, we designed a CX model that would illustrate relationships across multiple CX metrics. To do so, we made sure to:

  • Record interactions and direct outcomes by considering jointly-determined variables. In doing so, we ensured that the estimates recognised simultaneity and the influence of variables;
  • Recognise observations within a given time period that correlated with results seen in others;
  • Confirm the isolation of true influence by measuring non-linear relationships and recognising decreasing returns;
  • Use probability to account for any uncertainty, using Monte Carlo simulations to note anticipated outcomes and possibilities, and their likelihood;
  • Note and control the results of macro-economic changes or shocks that had a commercial impact, such as regulatory changes or interest rate movements.

We were also able to detail key KPIs for managerial attention. Incorporating digital activity and engagement, we showed how these indicators could forecast lagging indicators such as advocacy, customer retention, and new business acquisition.

We were also able to demonstrate how all of these would ultimately shape commercial performance. Of particular use, we then created a simulator, allowing the client to forecast the commercial impact of a number of possible CX improvements.

4. Compare your CX with firms both inside and outside your industry

When seeking to invest in CX, competitive benchmarks can be very useful. However, we strongly recommend contrasting your CX with that of leaders in other industries, as well as your competitors. This is particularly true for sectors with systemically low customer satisfaction.

For instance, when working with a sizeable global insurance company, we found that the firm’s CX rating in an important Asian market was better than that of its competitors. Indeed, this was particularly true in the most important areas of the customer journey.

Delving deeper, however, we discovered that this market had significantly lower CX ratings than those seen within other, comparable markets. This told us that the firm’s CX was not as strong as its competitive ranking may have initially suggested; in fact, the entire sector had systemically low customer satisfaction.

Although it could have been tempting for this firm to declare themselves a CX leader, its managers were quick to agree that being “the best of a bad bunch” was simply not good enough. Rather, they seized the opportunity, boosting their CX strength, leaving their existing competitors behind, and disrupting newer rivals.

5. Invest in carefully-considered measurement governance

No matter how sophisticated your CX measurement strategy, you may come unstuck without a robust governance model that allows you to implement, maintain, and action new insights. We’ve found that successful governance models consider the following concerns:

  • Who, within the organisation and individual functions, will implement, maintain, and action insights gained from CX measurements;
  • Which management processes will be used to drive the implementation, maintenance, and actioning of CX enhancements;
  • Which data management tools and technologies the organisation will require for the appropriate acquisition, storage, and provision of KPIs.

Final thoughts

For financial services businesses to succeed in the battle for competitive CX, they must combine a clear CX management plan with a strong governance model. With both in place, business leaders can carefully examine their end-to-end customer journey, witnessing their CX firsthand.

By engaging with CX performance in this way, firms are able to identify customer needs and opportunities for improvement, while highlighting the areas in which these improvements matter most.

By getting this part right, businesses can empower key individuals within the business, offering them prompt and immediately actionable insights. When these executives do act, they can leverage customer insight and do more than just fix an identified issue. Instead, they can create new CX that surprises and impresses their customers. Indeed, effective CX management could even disrupt a firm’s own CX model, triggering even more transformative innovations.

Years of research and strategy work in the CX space has made Plural a leading authority on how to drive improved experiences for financial services customers. Get in touch to find out how we can help you.

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