Measuring Your Customer Centricity: Four-Part Test to Assess Your Business Orientation
Financial Services
Theodore Levitt, a renowned Harvard marketing professor, once observed that “people don’t want to buy a quarter-inch drill bit, they want a quarter-inch hole.” Over the years, others have pushed Levitt’s idea even further, noting that no one buys holes. Rather, the drill and the hole it creates are simply the means to a higher-order benefit that people want to enjoy, whether it be more storage space from a shelf or cabinets, or a decoration hung on a wall.
The essence of Levitt’s point is especially relevant to banking. The financial services industry is being reshaped by new technology and new customer journeys that promise to change how people bank, and almost every bank is looking to license or build customer-facing applications to make sure people keep depositing, borrowing and investing with them. Many leaders see the development of those applications as their commitment to a customer-centric service culture that is consistent with the insight in Levitt’s famous quote.
But is it, really? Or does the urgency around FinTech simply reflect an interest in digital technology coupled with broader pressure to match competitor efforts to bring novel products and experiences to market? In short, are we building drill bits, or new solutions that provide a level of value to our customers they can’t get anywhere else?
Assessing Your Culture and Operating Orientation
Is your digital transformation strategy primarily driven by clear insight into unique customer needs and an obsession to meet them, or is it focused on what the technology can do for you and your ability to maintain market share? It is an important question, and the answer can’t be both. Ideally you can say the former, in which the customer focused orientation will lead to a truly differentiating value proposition. The latter simply means keeping up with the competition by offering commoditized technology and experiences.
Implementing a proven process to assess customer centricity, and how effectively it’s leveraged to serve customer interests, doesn’t need to be overly complex, but it does need to venture well past basic customer satisfaction scores. Customer satisfaction can be rather misleading, as it’s quite common for organizations to have strong and rising customer satisfaction scores and yet have a declining share of customer wallet performance. In fact, high satisfaction scores can create complacency, dull an organization’s drive to continually create new value for customers, and lull management into a false sense of having succeeded in becoming customer centric. The goal should be to have raving fans, not satisfied customers because satisfied customers will be the first to leave when something new comes along. Raving fans on the other hand will be your biggest source of referrals, reward you with greater share of wallet, and will stick with you no matter what.
To test customer centricity, banks should assess four variables:
Each variable can be cross-walked to distinct elements in a brand, business and operating plan, all of which should align to the delivery of uncommon value, at each touch point and in meaningful ways. None of the four variables are inherently difficult to address, but do they require a commitment from leadership to define and know their ideal target customers, to understand what motivates their behavior and to constantly renew the value proposition to meet their ever-changing needs and preferences.
With this approach, FinTech and competitor intelligence become the means to achieve the end of an obsession with solving problems for customers. Customer referral and loyalty become the yardstick by which we measure impact and business success. And, having the clearest, real-time insight into what motivates customer behaviors becomes the core business competency.
Kevin Steltz, BVK Senior Vice President; Financial Services
Michael Eaton, BVK Brand+Lever Senior Vice President
Brand Lever is a growth consultancy dedicated to using deep consumer insight, detailed market intelligence and proven strategies to build more valuable companies in highly competitive, heavily regulated and overly commoditized categories.
If you are interested in assessing the strength and of your bank or financial institutions’ culture and clear understanding of what it takes to be customer-centric, BVK > Brand+Lever can help. We do a three-day assessment with a half-day workshop for interested organizations at no cost (other than expenses) and with no obligation to purchase additional services. The output from that exercise is a formal scorecard with recommended steps that you can implement with internal resources or our counsel to make customer insight a core business competency for your organization.
