Putting the customer first – is it an impossible task for financial service providers, or is it actually possible to strike a balance between customer focus and profitability? You already know that the emotional customer experience is an important factor that can help set you as an asset manager apart from the competition. However, this isn’t just about customer satisfaction and the product approval process. Really putting the customer first means much more. This blog post will discuss four success factors for implementing the customer-centered concept.

 

 

Why focusing on the customer is becoming increasingly important

Nowadays, the customer plays an increasingly central role in the value creation and value destruction of organizations. This is called customer engagement, which refers to the involvement of customers in an organization or a brand. This trend is mainly a result of new, fast growing developments in the online world. Examples of value creation include positive word-of-mouth advertising via social media or the opportunity for participation on online platforms for co-creation. Value destruction may include sharing negative experiences via social media or posting negative reviews on websites such as independent comparison sites. In any case, it is clear that the customer has a considerable effect on the organization’s image, which can be difficult to correct with expensive marketing efforts. In addition, partly due to new technologies and communication channels, the customer expects improved information and services provision. Focusing on and raising customer interaction is therefore becoming increasingly important.

 

Putting the customer at the heart

For financial service providers, focusing on the customer goes further than just performing a duty of care. In practice, the duty of care is limited to giving specific product advice and minimizing the client’s risk as much as possible. In our opinion, it’s more about dual value creation. This comes down to serving the customer optimally, which will also have a positive effect on customer loyalty and business performance in the long term. However, serving the customer optimally must be a coordinated effort throughout the organization. This often requires major changes within the organization – and in some cases, even a total culture change. The customer must be seen as the starting point for almost all decisions. Of course, it’s important to know and understand the customer in order to provide him or her with optimal service. This means organizations must place a strong focus on the collection of information about customers and the dissemination of this knowledge within the organization.

 

Four success factors for implementing the customer-centered concept                                                                                                                                                                                                                                                                                                                                                                             In his research (Verhoef, P. C. (2012). Banking Code: customers at the center of the banking sector.) into focusing on the customer in the banking sector, Prof.dr. Peter C. Verhoef of the University of Groningen makes recommendations on how to implement this in practice within an organization. These are summarized below into four success factors:

 

  1. Top management must structurally embrace and propagate focusing on the customer through a joint vision, formulating customer objectives, and guaranteeing customer protection at the top. Leadership from both top management and lower management levels is necessary. For example, a Chief Customer Officer (CCO) could be appointed to promote the customer centered concept and represent the interests of customers at the top levels of the company.
  2. Top management must have sufficient insight into customers and customer value. There is often a financial and managerial background among (top) managers, which leads to a lack of customer and marketing knowledge. This can be structurally improved by having more actual contact with customers, for example by spending a few hours a month at the customer contact center.
  3. Management must use customer-oriented standards/KPIs for planning, evaluation, remuneration and reporting. These must be linked to financial KPIs, such as the business value. It’s important that there are standards that look at value creation towards the customer and the resulting value creation for the organization.
  4. It’s great if you have acquired the correct customer data and customer insight, but then it’s important to make this information fully available to the entire organization. For example, the current data must be available to management in real time, based on reports and dashboards. A good CRM system, in which customer data can be linked to various back office systems, can provide this.

 

Placing the customer at the center of automated business processes

The success factors make it clear that putting the customer first is intertwined with the vision, culture and objectives of your company. Ultimately, this will also need to be reflected in daily business processes and associated operational activities. With the right software (such as SCOPE), this can be partly automated based on process steps, control and authorization times. As a result, the right employee carries out the right tasks at the right time, taking into account the standards set for correct customer focus. Automating business processes, for example, is very suitable for client-on-boarding (SCOPE Know Your Customer Cloud Portal). In doing this, a complete appointment calendar can be recorded with a client, which includes all ensuing future issues to ensure a positive customer experience. In addition, verifiability is increased, the work is carried out more efficiently and a consistent quality of service in which the customer is central can be guaranteed.