PNC Bank Breaks Through Gen Y Blindspot December 3, 2008
Posted by Bruce Temkin in Customer experience, Design solutions, Disruptive customer experience strategies, EBD #1: Obsess About Customer Needs, Financial services, Gen Y, Innovation, Marketing to Gen Y, Online strategy.Tags: IDEO, Online infusion, PNC Bank, VirtualWallet
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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.
Engaging Gen Y With Immediacy November 18, 2008
Posted by Bruce Temkin in Customer experience, Gen Y, Marketing to Gen Y, Online strategy.Tags: Allstate, AT&T, Old Navy, Scion, T-Mobile, Victoria’s Secret, Zappos
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We just published a report called Engage Gen Y Online With Immediacy which examines one of the four design approaches that we’ve outlined for reaching Gen Y: Immediacy (the others design approaches are Gen Y literacy, individualism, and interactivity). The research examined the online experiences of a handful of retailers, auto insurers, auto makers, and wireless carriers to find positive examples of the following three strategies for immediacy:
- Refresh and update content constantly. Changing content frequently and updating feature page elements on a regular basis give users a reason to return over time.
- Expose value immediately. Delivering clear calls to action and interactive cues help draw young visitors into experiences right away.
- Provide frequent feedback. Presenting notifications, rewards, and other feedback to users throughout an experience keeps them alert and engaged.
Here are some examples of immediacy best practices that we found:
- AT&T displays updated lists of its newest and most popular phones.
- Several insurers start the quoting process right on their homepages.
- Old Navy provides an online only “sneak peak” at upcoming styles.
- Victoria’s Secret’s “Dress Shop” section provides pictures of products as users roll over navigation options for dress types.
- Zappos’ checkout highlights that some items are almost out of stock.
- Scion’s “Tweaks Of The Week” showcases vehicle modifications submitted by actual Scion owners.
- Old Navy engages users with recommendations to “complete the outfit.”
- Allstate provides a quick path to value by offering the choice to “get ballpark estimates without giving your name.”
- T-Mobile provides an interactive slider and buttons on its homepage to select plans.
I need to give a shout out to Andrew McInnes who was the researcher on this project (which means he did most of the work) and to Ross Popoff-Walker who worked with me on defining the Gen Y design strategies.
The bottom line: Give Gen Y what they want: immediate gratification.
Which Customer Experience Topics Are Hot? May 18, 2008
Posted by Bruce Temkin in Customer Experience Index, Customer experience, Customer-centric DNA, Experience-Based Differentiation, Marketing to Gen Y.3 comments
I like to look at how many people (Forrester clients) are reading my research reports. It helps me figure out the topics that people care about. So I decided to share some of that info in this post. These are my 15 most-read documents over the last 6 months [along with their publications dates]:
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The Customer Experience Index, 2007 [Nov. 07]
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The Gen Y Design Guide [Dec. 07]
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The Experiences That Satisfy Consumers [Feb. 08]
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Experience-Based Differentiation [Jan. 07]
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The Strength Of Customer Relationships [Feb. 08]
(Here are links to my complete list of research and my 2008 research agenda).
My take: Some observations about this readership…
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Experience-Based Differentiation (EBD), the oldest piece of research on this list, remains a vibrant blueprint for customer experience excellence. I continue to get a lot of demand on this topic for speeches, workshops, and advisory sessions. I am very excited about my current research on “Customer Centric DNA” which will illuminate the third principle of EBD: “Treat customer experience as a competence, not a function.” Look for that to get published in late June.
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Clearly the Forrester’s Customer Experience Index is hot, especially with three of our key industries: banking, insurance, and retail. We plan to repeat that research again this year, with even more industries.
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Many companies are beginning to actively look at how to reach Gen Y. Our data shows that these consumers are quite different and relatively underserved across many industries.
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One of my newer reports, The Business Impact Of Customer Experience, is getting a ton of readership because people are looking for quantitative proof (to reinforce their intuition) that customer experience is tied to loyalty. Well, this research shows that it is. So now it’s time for companies to get moving and make some improvements.
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Customer experience remains a hot topic overall. I continue to have the highest level of readership at Forrester; the number of clients that read my research during the past 6 months was nearly 70% higher than the second analyst on the list.
The bottom line: If people keep reading, then I’ll keep writing.
Banks Need A Youthful Overhaul March 24, 2008
Posted by Bruce Temkin in Customer experience, Financial services, Gen Y, Marketing to Gen Y.add a comment
In a post from late last year, Banks Have A Gen Y Blind Spot, I discussed that banks aren’t serving young consumers very well. Well, we found the same thing in a recent research effort, Customer Relationship Snapshot: Banks.
This analysis examined feedback from 5,000 consumers across 5 generations (Gen Y, Gen X, Younger Boomers, Older Boomers, and Seniors) on overall customer experience; satisfaction with Web, branch, and phone interactions; as well as consumer plans to stay loyal to their current banks. Here’s some of what we found:
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Seniors have their needs met most frequently
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Seniors are the most satisfied with phone and in-branch interactions
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Gen X are the least satisfied with phone, in-branch, and Web interactions
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Seniors are the least likely to switch banks
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Gen Y are the most likely to switch banks; Gen X the next most likely
The bottom line: The battle for the next generation of banking customers is wide open (check here for some ideas: Gen Y Design Guide).
Hulu.com Showcases Gen Y Design March 15, 2008
Posted by Bruce Temkin in Customer experience, Gen Y, Marketing to Gen Y.Tags: hulu
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Matt Vella wrote an interesting article in Business Week called How Hulu’s Design Gets It Right (and he included some quotes from me). Hulu is a joint venture between News Corp. and NBC Universal that lets users stream television episodes, films from Warner Bros. and Lionsgate, as well as sports content.
The article looks at Hulu.com as a good example of Gen Y design. While I didn’t do a review of the site, on the surface it adheres to many of the principles that we defined in the Gen Y Design Guide (here’s a shout out to Ross Popoff-Walker who led much of our Gen Y research).
On a related note, I just published a couple of reports that examine customer relationships across generations of consumers: ”Customer Relationship Snapshot: Retailers“ and “Customer Relationship Snapshot: Banks.” In both banking and retail, it turns out that Gen Yers are the most likely to switch providers.
The bottom line: If you want business from Gen Y, design for them.
Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch” December 27, 2007
Posted by Bruce Temkin in 2008 trend watch, Branding, Customer experience, Marketing to Gen Y, Online strategy.2 comments
In this Trend Watch, I’m taking a closer look at the following article from The McKinsey Quarterly: “Eight Business Technology Trends To Watch.” While you can see the full list of trends at the bottom of this post, here are the five items that I think are most important for customer experience:
#2) Using Consumers As Innovators. Excerpt: “As the Internet has evolved – an evolution prompted in part by new Web 2.0 technologies – it has become a more widespread platform for interaction, communication, and activism. Consumers increasingly want to engage online with one another and with organizations of all kinds.”
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My take: What’s a trends doc without a reference to Web 2.0?!? I’m not sure that online consumers will become the core innovative force for companies in 2008, but firms definitely need to tap into the online voice of customers — as they blog, write customer reviews, and connect with each other in new ways on the Internet. This is particularly true if you’re going after younger consumers.
#3) Tapping Into A World Of Talent. Excerpt: “As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence… The best person for a task may be a free agent in India or an employee of a small company in Italy.”
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My take: The Net definitely makes it easier to tap into a variety of workers in new ways. But it’s hard enough to keep a centralized workforce aligned; think about how hard it is when the talent is ultra-dispersed. In this environment, it is even more important that companies have a clear sense of purpose and a well defined and internally-communicated brand (see principle #2 of Experience-Based Differentiation). These items will help maintain consistency across the myriad of activities and decisions that go one across your company.
#5) Expanding The Frontiers Of Automation. Excerpt: “Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What’s more, this information can be combined in new ways to automate an increasing array of broader activities.”
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My take: The combination of service-oriented architecture (which connects disparate applications) and business process management systems (which can flexibly control processes) opens up the opportunity to automate many processes. Firms will squeeze inefficiencies out of customer-facing processes like applications, problem resolution, and credit approval. But don’t just automate processes; redesign them to better meet the needs of customers.
#6) Unbundling Production From Delivery. Excerpt: “Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively… Unbundling is attractive from the supply side because it lets asset-intensive businesses raise their utilization rates and therefore their returns on invested capital. On the demand side, unbundling offers access to resources and assets that might otherwise require a large fixed investment”
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My take: Interestingly, in 2000 we wrote a report called eBusiness Networks in which we predicted that: “Processes like customer care that span manufacturer, distributor, and retailer can be shared in eBusiness networks. Rather than design captive business processes, companies will plug into shared systems.”So I’m bought into this unbundling trend. Every firm needs to ask themselves: “How can my product/service be delivered as a metered service?”
#7) Putting More Science Into Management. Excerpt: “Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models… The holy grail of deep customer insight-more granular segmentation, low-cost experimentation, and mass customization-becomes increasingly accessible through technological innovations in data collection and processing.”
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My take: No doubt; there’s more data than ever. So make sure you’ve got some strong left-brainers around to look at Web analytics and customer analytics; there’s a lot of valuable insights to be mined. But don’t get caught over-focusing on analysis — it’s only one part of the equation. Your organization needs to treat customers differently based on the insights and this often takes more ”art” than “science.”
8 Business Technology Trends To Watch from McKinsey
Here are all of the items listed in The McKinsey Quarterly:
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Distribution co-creation
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Using Consumers As Innovators
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Tapping Into A World Of Talent
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Extracting More Value From Interactions
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Expanding The Frontiers Of Automation
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Unbundling Production From Delivery
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Putting More Science Into Management
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Making Businesses From Information.
Also see: Trend Watch #1: The Economist “The World In 2008 (Business)
The bottom line: Look for a lot more connectivity; but temper it with common sense.
Designing Experiences For Gen Y December 5, 2007
Posted by Bruce Temkin in Customer experience, Gen Y, Marketing to Gen Y, Online strategy, Social computing.7 comments
We just published a research report that I’ve alluded to in earlier posts called “The Gen Y Design Guide.” The research examines how Gen Y (ages 18 to 27) are different from older consumers and defines a set of implications for designing experiences. Here’s the executive summary from the research…
Gen Y consumers are a unique breed. But what exactly makes them different from their elders? Our research unearthed nine attributes of Gen Yers’ social, emotional, and mental makeup that shape their perception of interactions. To reach these young consumers, we’ve identified four design approaches: immediacy, Gen Y literacy, individualism, and social interactivity. To truly engage Gen Y, firms should create a Gen Y advisory board and apply Gen Y design approaches across touchpoints.
To get a sense of the world of Gen Yers, just take a look at the lyrics from a top-rated song “Crank That” from Soulja Boy:
What?!?! I have no idea what that means, but I’m pretty sure that I don’t want to know.
Our research uncovered the following key attributes of Gen Yers:
- Socially Fluid And Highly Networked. Having gone through high school, college, or a first job, many Generation Yers are breaking away from their families and forging their own paths and networks. We found three characteristics that define Gen Yers socially. They are continually connected, speak their own language, and are influenced by peers.
- Emotionally Searching For Their Identities. Adolescents and early adults are at a period of self-discovery, shaped by their environment, education and activities, and social culture. That’s why they seek recognition and fame, enjoy absurdity – and humor with an odd slant, and embrace a variety of subcultures.
- Mentally Fickle And Creative. Few Generation Yers can remember a time when technology – from DVDs to PCs – did not play an important part in their lives. Having grown up with deep exposure to media and devices, they skim text and information quickly, are easily bored, and are expressive and creative.
Based on the unique characteristics of Gen Y, we defined four design approaches for appealing to them:
- Design approach No. 1: immediacy. To overcome Generation Y’s fickle attention and broad use of media, firms need to hook Gen Yers in by quickly exposing value and then keeping them interested over time.
- Design approach No. 2: Gen Y literacy. Because Gen Yers are so influenced by peers and their own communication style, firms need to speak to them authentically and on their level.
- Design approach No. 3: individualism. Diverse and expressive, Generation Yers respond to experiences that allow them to personalize and customize their interactions.
- Design approach No. 4: social interactivity. Since Gen Y consumers are very social, firms should consider enabling them to communicate and express themselves.
The bottom line: If you want to attract and engage Gen Yers, stop treating them like Boomers.
We Can All (Hopefully) Learn From Halloween October 31, 2007
Posted by Bruce Temkin in Customer experience, Marketing to Gen Y.add a comment
Halloween is a lot of fun.
You don’t know what you’re going to run into – from free candy in offices to co-workers dressed-up like vampires. And later today, I’m sure that my house will be invaded by swarms of Hannah Montana and Jason Varitek (and Tom Brady) look-a-likes demanding treats. It all seems to work out well for retailers who, according to an article in today’s San Francisco Chronicle, rake in $5 billion.
Since the holiday has already been commercialized, I thought I’d suggest 5 ghoulish customer experience lessons that companies can learn from Halloween:
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Kids just wanna have fun. In an upcoming research report called ”The Gen Y Design Guide,” we describe 4 strategies for designing experiences for younger consumers. These approaches are based on how young consumers are different mentally, socially, and emotionally from older consumers. One of the key things to keep in mind: They enjoy absurdity — and humor with an odd slant.
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Treats avoid tricks. If you want to keep your customers from saying bad things about you, leaving you, or other bad “tricks,” then find ways to treat them well. When’s the last time that you designed a campaign to thank your good customers for being good customers (and not just to sell them something new)?
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It’s not about your favorite candy. In this day and age of safety, most parents don’t let kids eat things like unwrapped candy or fruit. So even if you love eating hand-fulls of loose candy corns, you probably wouldn’t hand them out that way to the kids. When thinking about how you interact with customers, make sure that you keep their needs top of mind (and not overly focus on your own).
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Safety always comes first. When kids come to your front door, you have to make sure that the stairs are well lit and free of clutter. No-one wants little kids hurting themselves. Customers deserve that same consideration around safety and security when you’re handling their personal information.
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Don’t take things too seriously. It’s hard not to smile when you see kids dressed up in their Halloween gear. You should find a reason to smile like that every day.
The bottom line: Have a wonderfully Happy Halloween!
What Men And Woman Want — Online October 23, 2007
Posted by Bruce Temkin in Customer experience, Gen Y, Marketing to Gen Y, Online strategy.add a comment
The title of this post (What Men And Woman Want — Online) is also the title of a research report that I published with Ross Popoff-Walker earlier this year (we had fun picking that title). In that report, we looked at what different consumer groups liked most about their online experiences. Since we had about 5,000 consumer responses, we were able to examine differences across both genders (male/famale) and generations (GenY, Gen X, Younger Boomers, Older Boomers, and Seniors).
The survey asked consumers to select important elements in their most frequently visited site. One of the interesting pieces of insight came from looking at which consumers selected “it was fun.” Here’s what we found:
- Young consumers are the most fun loving. No surprise; Gen Y (males and females) were the most likely to select “it was fun” from the list. About 40% of those younger consumers thought it was an important element of their favorite site.
- Men become less interested in fun as they age. Gen Y males were slightly more likely to select “it was fun” than were Gen Y females. In older generations, however, females became more likely to say that fun was important. And the gap increases in every age group — growing from a 1% gap for Gen Xers (32% versus 31%) to a 6% gap in Seniors (24% versus 18%).
The bottom line: Consider infusing some ”fun” into your online efforts. It’s important for many Gen Yers and one-quarter of Senior females.
Banks Have A Gen Y Blind Spot October 20, 2007
Posted by Bruce Temkin in Customer experience, Gen Y, Marketing to Gen Y.5 comments
Let’s face it, large banks aren’t generally easy to do business with. In a recent Forrester Research report called “Consumers Don’t Enjoy Financial Services,”I examined survey responses from about 5,000 consumers who told us what they thought about their bank. Here are some tidbits from that research:
- 35% of consumers fall into a segment that we call “at-risk” because of their low level of enjoyment with their bank. Compared to other segments these ”at-risk” consumers are the youngest and have the highest income.
- Young females (Gen X and Gen Y) report the most problems with their banks
Banks know they have a problem. In a previous post called “Banks Prepare For Customer Experience Wars” I discussed a survey of banking execs that I did with American Banker. In that survey we found that:
- 97% of banking execs think that customer experience is very important or critical
- Most say that they aren’t meeting customers’ needs – especially online, where less than one-third of respondents gave their bank’s interactions a vote of confidence.
Hmmmmm. Doesn’t take a PhD to figure out that banks have a customer experience problem — especially with younger consumers.
Given that Gen Yers are really a different beast from older consumers (take a look at my presentation on Gen Yers within this post: A View Of Forrester’s Consumer Forum October), banks will need to focus explicitly on this younger segment.
The bottom line: FWIW, IMO b8nks need better Gen Y strats. HTH 
