Dismantle Silos to Build
a Customer-Focused Enterprise
In a bank/customer relationship, providing a "good customer experience" really means providing an ongoing series of trouble-free, positive experiences. But with business customers having more access to information, less sensitivity to traditional advertising and more sensitivity to price, this is getting harder to achieve.
So, in the competition for customers, how do you stand out from the others in your customer's mind?
Forrester Research says organizations need to drastically raise the bar on the customer experience they provide, through what it terms Experienced-Based Differentiation. EBD requires an enterprise-wide change in mind-set, organization and structure. In Forrester's research report, "Experience-Based Differentiation: How to Build Loyalty with Every Interaction," analyst Bruce Temkin offers three imperatives:
- Obsess about customer needs.
- Reinforce brand with every action.
- Treat customer experience as a competence, not a function.
The new mind-set requires a redefinition of customer value. Customer value isn't just the value the bank can get from the customer. It also includes the value the customer receives in return — for that is what ultimately sustains the relationship.
When seeking mutual value creation, keep in mind the following points from SAS Institute's white paper, "Organic Customer Growth for Financial Services Institutions":
Customer retention doesn't necessarily mean customer satisfaction. A customer who holds a bank in low esteem but stays may be merely trapped, not loyal.
Customer satisfaction is no guarantee of loyalty. "Satisfied" customers might still be lured away by competing offers or the need to diversify.
Customer loyalty is the combination of satisfaction and behavior, but is still no guarantee of profitability.
Dismantling or transcending silos
Before banks can become customer-focused organizations, they need to dismantle or transcend organizational silos. According to a recent article in Harvard Business Review ("Silo Busting: How to Execute on the Promise of Customer Focus," May 2007, by Ranjay Gulati), some of the key factors in achieving this are:
Coordination. Harmonizing information and activities across all business units.
Cooperation. Through incentives, structures and allocations of power, all departments must work together in the interest of customer needs.
Capability Development. Develop skills to empower employees to deliver customer-focused solutions. Reward those who succeed in busting through silos to deliver customer solutions and establish desirable career paths for them.
Integrate sales, marketing and product development
Coordinating the efforts of multiple departments enables value creation for customers that would otherwise not be possible. A customer-centric culture provides a complete view of the customer across all products, while a product-centric culture gives only a partial view of the customer from a specific product lens. The latter doesn't bring insight into the banks' share of wallet with the customer and creates a disconnect that makes it difficult to spot and respond to cross-sell opportunities.
Information formerly sequestered by department must be opened up for information-sharing across the enterprise. This can be most easily achieved by structural overlays that transcend rather than obliterate old systems.
For instance, senior executives can have accountability for customer retention across traditional boundaries. Some experts even suggest creating a new C-level position in charge of the customer experience.
Existing customer data silos need to be scrubbed, centralized and made accessible to sales, marketing, product and senior management. Customer touch-points and interactions of all varieties must be catalogued continually to present an accurate and current view of the customer. Attitudinal information about customers can be derived from regular, impromptu surveys.
You can integrate e-mail surveys, in-person surveys and call center surveys, both formal and informal, into any customer interactions. This need not be a tedious or lengthy undertaking.
The ultimate question
The answer to one simple question can help direct your efforts to improve customer experience. Fredrick Reichheld, loyalty expert and author of The Ultimate Question for Unlocking the Door to Good Profits and True Growth, found that asking customers, "Would you recommend us to a friend or colleague?" can unearth keen insights into customer attitudes and help predict future behaviors. Going further to ask "why?" or "why not?" can reveal underlying attitudes and how your customers see you.
In his Harvard Business Review article, Gulati suggests that organizations move beyond dividing their enterprises into units of specialization. Instead, he suggests a model where employees have knowledge and skill sets that span boundaries, so they can assist customers with multiple products and services based on customers' needs.
To foster cross-boundary sales effectiveness, relationship managers can transcend their current sphere of knowledge and experience by training and rotating within various business lines. Cross-boundary sales skills and experience can continue to be cultivated through regular meetings in which relationship managers share with one another their knowledge, experience, challenges and success stories. These stories from the field, when documented in a centralized database, can be factored into more customer-focused processes in sales, marketing and product development.
Marketing can communicate value to customers across all business lines in a way that provides solutions regardless of business line. Product development can use the information to go beyond simply designing features to engineering better customer experiences and learning why customers use offerings as they do. They can also focus on what might be frustrating customers and try to uncover and even anticipate client needs that they may not have yet identified or addressed.
Establishing Customer Loyalty as a P.R.I.M.E. Resource®
By Jeff Thull, CEO, Prime Resource Group
Leading thinkers in business are discovering that traditional differentiation strategies are not nearly as productive as building a solid base of steady customers who look upon them as partners — ones who seek to establish P.R.I.M.E. Resource® relationships with a smaller number of key suppliers.
A few years ago a Fortune 50 company gathered 30 of its top vendors. A company executive opened the meeting: "You are all valued suppliers. Your quality and service levels are beyond our most stringent standards and your pricing is extremely competitive. Unfortunately, we will have to terminate our relationships with 90% of you. We can no longer afford to take the time to decipher the minute differences between your products and services."
I'm sure it was a sobering moment for the majority of people in that room.
Customers are demanding a higher level of expertise from the individuals they choose to work with and are giving greater loyalty to those who most adequately support their business objectives.
Becoming a P.R.I.M.E. Resource
P.R.I.M.E. is an acronym we use to describe the concept of becoming a valued contributor to your customer's business success.
P stands for Primary. According to Webster's, primary means, "First in time, rank or importance." Therefore, becoming a P.R.I.M.E. Resource means:
- You become pre-eminent in your customer's mind. You are the first person who comes to mind when a problem or question arises in your area of expertise.
- You outrank all your competitors — you become the competition everyone else tries to displace.
- You are vital to the success of your customers' operations.
R is for Resource, a source of help or supply. When you become a P.R.I.M.E. Resource, you are an extension of your customer's organization. You enhance the customer's capabilities to solve problems and build its business.
I is for Involved. Being a P.R.I.M.E. Resource means you will carry out a long-term, mutually beneficial relationship based on trust and respect. When you are involved ...
- You sincerely care about customer concerns. If a customer has a problem, that problem stays on your mind until you come up with a solution.
- You know that what is best for the customer is ultimately best for you and your company.
- You look for every opportunity to build a relationship so satisfactory that neither you nor the customer will be looking for ways to get out of it.
M is for Managing. It means, "To succeed in accomplishing; to have charge of or responsibility for." "Accomplishing" implies the successful completion of a plan. Our major plan in working with customers is the Multiple Decision/Mutual Understandings process. We have charge of it and accept the personal responsibility for accomplishing it.
E is for Expectations. A P.R.I.M.E. Resource manages the customer's specific expectations, based on the issue that has been diagnosed; will expand the customer's understanding of the problem and its cost; helps the customer envision what it will be like when the problem is cured; and helps the customer establish decision criteria.
How to become a P.R.I.M.E. Resource
Being a P.R.I.M.E. Resource ultimately involves building strong relationships with your customers. Here are a few pointers:
- Build a reputation for excellence based on trust and dedication.
- Keep up with market conditions, new products or services, technical standards, industry trends and personnel changes.
- Use a conscientious, professional approach in helping to resolve your customers' critical issues.
- Continually polish your professional sales and problem-solving skills.
- Know your customer's world — its associations, industry and customers.
- Be the customer's advocate. Work to smooth all problems your internal systems may create for your customers.
- Know what the competition is doing. Report back to your company any information regarding preferred performance, energy savings, lower cost or other features or benefits your competitors announce.
Respond to your customers and be receptive to their needs. Your knowledge will help to resolve their challenges, support their financial well-being and contribute to future growth.
As you become a P.R.I.M.E. Resource, you will find your customers depending on your expertise, products and services. The result will be loyal customers who put a high value on a "competitor-proof" relationship.
About the author
Jeff Thull is a leading-edge sales and marketing strategist and valued executive advisor at major companies including Shell Global Solutions, 3M, Microsoft, Intel, Citicorp, IBM and Georgia-Pacific.
He is also the author of the best-selling books Mastering the Complex Sale: How to Compete and Win When the Stakes are High and The Prime Solution: Close the Value Gap, Increase Margins, and Win the Complex Sale. Jeff’s new book, Exceptional Selling: How the Best Connect and Win in High Stakes Sales, is now available.
For more information, please contact: Prime Resource Group, 3655 Plymouth Blvd., Suite 110, Plymouth, MN 55446, [email protected], www.primeresource.com, 1.800.876.0378 or 763.473.7529, Fax: 763.473.0792.