ABA Banking Journal - October 2008 - (Page 26)
RETAIL BANKING REPORT segmentation Demographics are only part of the story. How customers react to a series of vignettes helps banks get inside the customer’s mind, heart, and emotions. Here’s how the process was applied at one large retail bank Rethinking n their seminal work The Experience Economy, Joseph Pine and James Gilmore identified Customer Experience as the emerging key differentiator in today’s services economy. That was almost a decade ago. Yet a positive, differentiated, memorable and engaging customer experience continues to remain an undefined and elusive goal for most banks. More than ever, banks recognize that their products and services are viewed as commodities. Bankers, vendors, technologists, consultants, customer advocates and industry pundits all have opinions on what the key elements are of an exceptional customer experience. But how are those opinions validated with the customer who will actually have the final vote? Usually, it is done with a series of focus groups that fine tune financial products and services after they already have been built, when the major decisions are cast in stone. We present in this article a new approach to solving the issue of creating an exceptional customer experience in banking. The predictive analytic techniques are not new. They have been proven in successful use in the consumer goods and manufacturing sectors for over 25 years. What is new is the application of these techniques to the banking and financial services industry, and to the realm of experience engineering. And, they deal with the newly emerging notion of “addressable minds.” Knowing By Stephen Onufrey and Howard Moskowitz, PhD. Onufrey is retail banking solution executive for the SRO Group, LLC. He spent 38 years with IBM and two with Unisys working on retail banking solutions. Moskowitz is president of Moskowitz Jacobs, Inc. A pioneer in the field of psychophysics (the study of perception and its relation to physical stimuli), he was inducted into the Hall of Fame of New York’s Market Research Council in 2006. the ‘mind’ of the individual customer lets the bank create the exceptional experience for that customer. The article is based on our work with a large retail banking company. The work focused specifically on questions relating to customer acceptance of new technology-based services. The chief technology officer of that bank was faced with the task of recommending new technologies that will be cost justified and will also provide an exceptional customer experience. A predictive analysis study was performed in order to determine the potential impact of specific new technologies (including RFID— radio frequency identification) to the customer experience. The resulting data is useful in its own right, but more important, we feel, is the methodology and approach to customer experience research. Other banks can measure their own efforts against the approach used here. 1. Here are four broad findings from the project: No future experience really strongly appealed to or repelled the average person. The “average person,” as we will see, is a myth. Experience can be engineered, but not by looking at everyone in the aggregate. In fact, the average reaction to “new ideas,” the substance of the new experience, was neutral to somewhat negative. Scratch winning ideas for everyone! We have to dig deeper to engineer a better experience. With the traditional subgroups—sex, age, income—we saw some differentiation. The new, technology-based ideas appealed more to men under the age of 40 who had an income in excess of $40,000 per year, for example. Still, there was something missing. It was clear that going about dividing people the 2. 26 OCTOBER 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com
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