Yesterday I had the pleasure of presenting at the Customer Experience for Financial Services (CXFS) 2018 conference – which was held in Boston. As well as seeing a number of fascinating presentations from contributors across the world of customer experience, I was able to present our most recent findings from our study on customer experience in the banking industry, in particular on checking accounts in the US.
This year we were looking to go beyond NPS – the universally popular measure of customer experience. To understand what really makes customers tick – cue the watch metaphors – it is necessary to understand a holistic view of experience, allowing us to identify the root causes of dissatisfaction and prioritise change.
Using KAE’s proprietary KX:model, as discussed in our recent blog series, we built a multi-dimensional picture of customer experience, using hundreds of painpoints across multiple consumer journeys and channels.
The most frequently cited painpoints for checking accounts are ‘the interest rate is low’ (27%) or ‘no interest on my checking account’ (24%), as shown in Figure 1. Traditionally, strategists might use this kind of finding to help prioritise change but resolving the most commonly experienced painpoints does not necessarily correlate in the largest increase in NPS. Increasing interest rate could make already satisfied customers a little more satisfied but may not appease customers who are experiencing other, potentially more serious issues. Therefore, we need to look at the impact each painpoint has on satisfaction – how important is it for determining overall NPS. Resolving the most impactful painpoints will have the biggest effect on each customer’s satisfaction. In our study, the most impactful painpoint was ‘not feeling like a valued customer’, followed by ‘lack of cashback’ and ‘misleading information from their bank’.
Resolving the most impactful painpoints helps us build a strategy for improving customer experience, but we can go even further, identifying which specific issues are causing customers to cross the line from satisfied to dissatisfied. The most severe painpoints are those for which the clear majority of those who experience it become dissatisfied. In our study, the most severe painpoints were not feeling like a valued customer, being unable to switch to paperless billing and unclear breakdown of spending transactions.
Using machine learning, we can use the metrics of impact and severity to identify the unique combination of painpoints that will result in the highest increase in NPS and reduce the likelihood of ‘severe’ events from causing damage to reputation. Feeling like a valued customer was first among the eleven prioritised painpoints for US checking accounts, which upon resolving would result in an estimated 14-point increase in NPS score, as shown in Figure 2.
Of course, feeling like a valued customer is not a straightforward painpoint to resolve. When thinking about customer experience, we can’t expect a simple relationship between customer pain and the process that causes it. Using further modelling techniques, we can delve deeper into what exactly causes customers to feel valued – which is a combination of satisfaction with customer service and checking account fees.
During the presentation, I was able to show how this methodology was able to both:
- Help a well-performing bank to further boost its NPS
- Push a the NPS score of a bank that is struggling with its customer experience score from negative to positive
All banks, regardless of their NPS score, have unique customer experience strengths and weaknesses, but it takes investigation to effectively prioritize change. My presentation identified some key areas to focus on in general checking account customer experience but a model bespoke to a bank’s customers will always produce the best results.
- Prioritising painpoints based on which are most common may not be effective in improving customer experience
- Feeling valued as a customer was a key painpoint resulting in dissatisfaction of checking accounts in the US
- Analytical techniques and modelling can provide fundamental insights for improving customer experience
If you would like to hear more about the presentation or how the KX model can work for you, please feel free to contact me at Tom.Mowat@kae.com or contact the team at firstname.lastname@example.org. I hope to see you at future events – for more information on CXFS please visit: https://cxfinance.wbresearch.com/