Webinar Recap: Getting to Customer-Centricity in Financial Services

61 min

Prophet recently hosted a webinar on customer-centricity in financial services – what it means today, what firms across the industry are doing to achieve it and how they measure success. We were joined by several senior leaders who graciously shared their insights and experiences:

  • Beth Wood, Chief Marketing Officer, Principal Financial Group
  • Andrea Schultz, Head of Workplace Retirement Marketing, Equitable
  • Kai Sakstrup, Chief Strategy Officer, US Bank

The questions and inputs from attendees made for a lively session, and we wanted to share some follow-on thoughts based on the big ideas that emerged during the discussion.

The State of Customer-Centricity in Financial Services

For years, customer-centricity has been a hot topic for banks, insurers, investment firms, credit agencies and other industry players. Tech-driven disruption, increased competition and rising consumer expectations have kept it near the top of the strategic agenda for marketing, sales and service executives, but indeed all types of business leaders and throughout the C-suite.

As we highlight in a recent report, the business case for customer-centricity – which is based on revenue growth, increased share of wallet, stronger loyalty and higher Net Promoter Scores (NPS) – remains as clear and compelling as ever. But many organizations still face longstanding challenges to achieve true customer-centricity. The most common barriers include:

  • Complex organizational structures
  • Post-M&A integration difficulties
  • Heterogeneous customers with diverse needs
  • Rigid legacy systems and fragmented data
  • Regulatory constraints

Collectively, these challenges lead many customers to feel as if they’re dealing with different companies when they engage with more than one business unit or product from the same organization. As Kai put it, “customers should not see our org chart.” But legacy operational models with siloed product lines and busines units make it challenging to offer seamlessly integrated customer experiences. Andrea commented that she was “jealous of FInTechs” because they don’t have to contend with all the outdated tech and can execute around a clear customer-centric vision.

Customer-Centricity in the Big Picture

Beth spoke on the need to “empathize with customers and to identify what each touchpoint really means to them.” This could emphasize tactical actions, such as data cleansing and harmonization to ensure all business units have access to complete and timely customer data.

There are unique elements of the customer experience – which Beth called the “visible edge of the brand” – that should be owned by business units. But it’s critical for marketing leaders to “build bridges and open doors and windows” between all parts of the organization so that experience is unified and as seamless as possible for individual consumers. After all, marketing leaders are often the most passionate advocates for satisfying customers.

Collaboration between business units is how customer experience and human-centered design can be truly embedded within and throughout the business, rather than being bolted on. Beth added that “customers are the avenue to scale transformative change.” Advanced technology can help operationalize such change, as well as promoting consistency in the customer experience, though it takes more than just the latest to be truly customer-centric. Indeed, chasing the newest tech can even distract some organizations from delivering what customers want. To become customer-centric, organizations need to align strategically on holistic transformation.

How to Drive Customer-Centric Transformation: Actions and Advice from Senior Financial Services Leaders

Seek Ongoing Feedback to Enhance Customer Knowledge
Success starts with deep knowledge and understanding of consumer needs and wants. While most companies would say they know their customers, the reality is that it’s much harder than it looks. And simply having lots of data doesn’t equate to customer knowledge.

Detailed journey mapping and segmentation exercises can help convert huge volumes of raw data into actionable insight. These efforts must also be supported by active and ongoing feedback mechanisms to track the effectiveness of every touchpoint.

Principal conducted a global study to learn what was going on in the hearts and minds of all of its consumers, across age and socioeconomic bands. “Do your homework on who you are, what you want to be, and then talk to your customers about what’s important to them,” added Beth.

Prioritize Diversity

The need for insight has only increased with the spotlight on diversity, as one participant question highlighted. Some consumers perceive that the financial services sector has historically focused on wealthy white males, a perception that true customer-centricity can powerfully counteract.

According to Kai, deep research on all customer segments helps prevent marketers from “assuming that we are the person that we’re serving, which can lead to bad outcomes.”

Champion the Promise Amongst the C-Suite
There was consensus among the panelists that buy-in and leadership from the top of the organization (including from product and business unit executives) are critical to realizing the promise of customer-centricity. Shifting the mentality of the organization involves getting more people thinking about the business from the perspective of the customer and talking about customer needs.

Marketers are often responsible to ensure that customers are represented in such discussions. Kai spoke of taking inspiration from senior-level advocacy and engaging “the people within the organization that actually do the work day to day.” Making customer-centric change sustainable requires incenting and rewarding the right behaviors. It also requires ensuring that the business case for change is clearly explained; you don’t want to imply that people have been doing things wrong.

Find the Right Talent

Talent is another key variable in the equation for success. All of our panelists are looking for more data science and analytics talent, as well as targeted expertise in engagement strategy, social media and other areas.

There is increasing interest in bringing in talent from other industries, with the goal of challenging conventional wisdom and energizing marketing teams. Fresh thinking is more valuable than knowing about financial services regulation, for instance. After all, new hires from consumer packaged goods and retail can always learn the industry. Our panelists agreed that such talent is critical to generating strong returns on their large-scale investments in technology and data.

Track and Celebrate Incremental Progress

NPS and customer sentiment are among the top metrics for tracking customer-centricity. But it’s also important to track the small nuances of consumer behavior that can serve as leading indicators. Andrea believes the key is to know how customers feel about individual interactions and their willingness to go through them again. “Those are universal metrics that drive change, because everyone can understand them,” she said. Plus they provide more detail about what’s behind NPS.

Though firms should adopt an agile approach to upgrading elements of the customer experience, customer-centricity is more like a marathon than a sprint. “You want to say ‘within two quarters, we’re going to transform this business,’ but I think that’s the wrong approach,” said Kai. “You have to realize there’ll be milestones along the way and identify how to incrementally keep moving forward.”

Andrea agreed. “When it comes to customer-centricity, you have to play the long game, because the wins you’re going to see won’t show up on the balance sheet in a year.” That’s why leading marketers orient their customer-centric change efforts – including strategies, budgets, resources and their teams – around the target customer behaviors and business outcomes that matter most.

Final Thoughts

Our recent webinar, along with our ongoing client experience, shows the intense interest senior marketing leaders have in instilling customer-centricity in their organizations. Their passion will serve them well in advocating for richer and more personalized experiences and creating momentum for the long-term journey.

Watch the full replay here or get in touch with our financial services team at Prophet.

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