Capital One Rebrands ING Direct, Puts Brand Equity At Risk

Capital One announced that it will drop the ING Direct brand (along with its highly recognizable orange ball logo) and rename the unit Capital One 360. While it may make sense to reinforce the Capital One brand across its operating units, this move comes with some risk.

It turns out that ING Direct has considerably more positive brand equity than Capital One. Take a look at banking results across many of our 2012 Temkin Ratings:

The bottom line: Hopefully a lot of ING Direct rubs off on Capital One

Customer Experience And Loyalty For UK Banks

In yesterday’s post, I discussed the connection between CX and business results for U.S. banks. Well, the relationship holds true for UK banks as well. Here’s a chart with the banks in the Temkin Experience Ratings UK and Temkin Loyalty Ratings UK.

The bottom line: The link between CX and loyalty holds true in the UK

USAA’s Mobile App Showcases Innovation

For years, there’s been a lot of hype about mobile banking. It turns out, however, that most people are not ready to abandon their branch visits, phone calls, or Web browsing for a mobile window into their bank. But that doesn’t mean that mobile can’t play an important role in banking.

Source: New York Times

USAA introduced an innovative iPhone applicationremote check depositing. Customers that qualify for the service can take pictures of their checks and deposit them into their accounts as if they were handing the paper check over to a teller.

My take: This application makes a ton of sense for USAA, especially since many of its military customers are stationed around the world. Companies can find opportunities like this by following my three steps for customer experience innovation:

  1. Uncover the needs. Many USAA customers do not have an easy way to deposit checks.
  2. Design a disruptive strategy. The mobile app is a great example of a strategy called online infusion.
  3. Evaluate the opportunity. Given USAA’s focus on making it as easy as possible for their customers, this new application makes strategic sense. And the company’s rules for qualifying help keep the risks low. 

The bottom line: Everything starts with customers’ needs.

Does Your Bank Make You Smile?

nwbankposter

This morning I presented at Digital Insight’s user conference in San Diego. After I discussed why customer experience is important for banks (especially small and mid-sized banks) and explained how to apply the principles of Experience-Based Differentiation (EBD), Doug Zernow told the story about Northwestern Bank.

ICDT webIt turns out that everyone in the bank wears a button that says “I can do that!” But it’s not a slogan, it’s the essence of the bank; they’ve infused a sense of ownership and accountability to customers in everything that they do.

Doug described the four values that underlie “I can do that!:”

  • Customer focus (the customer is the boss)
  • It’s about “I/we” not them (keep silos from getting in the way)
  • Energy givers, not energy takers (engaged employees)
  • Minimal policies and rules (employees are empowered to waive fees, negotiate rates, and spend money to make the customers happy)

What has “I can do that!” meant for Northwestern Bank?

Growth! When the bank started the program in 2002, it had 7.2% market share in its geographic footprint. Since then, it’s market share has grown steadily — hitting nearly 13% in 2008. During that time it has also grown larger than three of its main competitors in the region: Citizens, Huntington, and BankOne.

My take: Northwestern Bank’s “I can do that!” program is a great example of EBD’s Principle #2: Reinforce the brand with every interaction.

The bottom line: Make your customers smile.

PNC Bank Breaks Through Gen Y Blindspot

Last year I proclaimed that Banks Have A Gen Y Blind Spot. Well, that’s no longer true for all banks. It turns out that PNC enlisted IDEO to help engage Gen Y and created a new offering: VirtualWallet. According to a recent BusinessWeek article, PNC has signed up more than 20,000 customers (70% from Gen Y) and is on track to break even in two years.

Here’s how VirtualWallet is described on the IDEO Website:

[It is] a family of banking products that provide customers with seamless access to their finances and intuitive, tangible, and direct control of their money. Centered on electronic transactional banking, it is designed to both promote and optimize banking activities with features and visualizations that support the mental models and lifestyles of its Gen Y customers

My take: I really like VirtualWallet. It shows what you can do when you explicitly focus on Gen Y. The long-term success will require ongoing nurturing by PNC, but the initial approach makes a lot of sense because:

  • It applies a strategy called online infusion. While it’s a financial offering, online features like a money slide bar to graphically indicate available funds, a “Savings Engine” that helps customers establish rules around spending, and a playful instant transfer feature named “Punch the Pig” are core to the value proposition.
  • The online experience implements many components of the four strategies we’ve defined for engaging Gen Y: 1) Immediacy, 2) Gen Y literacy, 3) Individualism, and 4) Social Interactivity.
  • There’s a mobile component. While this wouldn’t make sense for many banking applications based on overall mobile usage, it’s almost a requirement if you want to target Gen Y; many of whom view their cell phone as their primary digital device.
  • The approach starts with customer needs. While this is not novel for projects that involve IDEO, many companies aren’t diligent enough in starting with a solid process for uncovering the true needs of specific customer segments. By understanding Gen Y behaviors, the bank can actually charge fees for anything more than 3 checks per month.

The bottom line: Gen Y will be getting a lot more attention from banks.

Forrester’s European Forum, Part 2 (Banks)

As I mentioned in a previous post, I was the Forrester’s European Consumer Marketing and Financial Services events in London last week. Here are highlights from a few interesting speeches about customer experience initiatives within large European banks:

  • Mike Thompson, Head of Real Retail Center of Excellence, Barclays
    “Building Better Customer Journeys”
    Thompson discussed the bank’s “Way Ahead” program. While Barclays had customer insights, it realized that the front line “was oblivious” of the information. The goal of the program was to translate the insights into language that the front-line staff would understand. Thompson shared the simple statements they came up with for guiding customer interactions: Be welcoming, be knowledgeable, be proud, be inquisitive, be innovative, and be memorable. He shared a couple of powerful videos they produced to make these items come to life with the staff. To make the training engaging, the bank created tools like playing cards with tips for each of these areas and processes for the staff to translate these statements into their own enviornment. They also created DVD-based training modules which were developed for managers to use in their short (5-10 minutes) morning meetings with the staff.
  • Nick Read, Director Distribution, Sales and Service, HBOS
    “Develop A Branch Led Customer Experience Culture”
    Reed discussed how the bank had become really good at growing customers in the early 2000’s, but then started to lose customers around 2005. The success of the “sales machine” kept the bank from recognizing the problem and focusing on customer service. This year, however, they have started to address the situation with a program focused on being “easy to do business with.” The bank created a three-level service strategy: 1) Get operational basics right; 2) delight customers when it matters; and 3) stand out from the competition based on our attitudes and behaviors. To get the staff focused on great experience, they created “Service Expressions” to bring to life the staff’s role in customer experience: “It’s good to see you.” “I take responsibility,” “You matter to me,” and “I can make you better off.” The bank uses 4 key measurements: Customer satisfaction, customer complaints, average product holdings, and colleague satisfaction (it uses a “Colleague Morale Index”).
  • David McQuillen, Head of Client Experience, Credit Suisse
    “The Three Causes and Cures of Bad Customer Experiences”
    McQuillen dicussed how product/price/performance represents about 37% of the drivers of customer satisfaction for banks; service and experience account for the rest. He described three causes for customer experience problems: Too much choice, increased complexity, and the inability to communicate. He also discussed four elements of design for each channel; for the Web it’s function, structure, content, and aesthetics. To keep employees from being internally-focused, McQuillen gets people to say “I am not my customer” and he talked about a collaborative process for designing with the customer and not for the customer. To get empathy for customers, executives go through immersive experiences which include trying to accomplish something like a customer, observing customers, and interviewing customers. McQuillen discussed one project where they got the bank’s lawyers to sit in a room and fill out some of the bank’s forms.

The bottom line: Many banks are taking customer experience seriously.

Wells Fargo Buys Wachovia: A Win For Customer Experience

In a recent post, I discussed my concern about Citibank buying Wachovia. But there’s good news on that front, Wells Fargo has stepped in and bought Wachovia. Well, that’s GREAT NEWS for customer experience.

In Forrester’s Customer Experience Index, Wachovia was fourth and Wells Fargo was seventh out of 14 banks on the list — two of the highest ranking large banks. I’ve worked with both of those banks; they have reasonably strong customer-centric cultures (at least compared to other big banks). You can see some of that in my post about how Ken Thomson’s leadership impacted Wachovia.

The bottom line: Hopefully Wells/Wachovia will raise the level of customer experience across the whole industry.

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