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There is often a mistaken belief that great customer experience (CX) comes at a higher cost. Through Datacom's CX advisory engagements, we have been able to demonstrate, with primary data, that improving service design will reduce error rates and reasons for a customer to call back. It will improve the overall service experience, which will drive down the cost to serve. This cost improvement can be identified by channel and/or as a total cost of ownership (TCO). In the US, for example, organisations offering a high-quality customer experience can lower the cost to serve by up to 33 per cent, according to Blake Morgan of Forbes.
In Australia, there have been great strides forward from leading organisations to better engage with customers. However, this engagement has still not consistently met what most customers would consider excellent service. Most banks are still optimising their approach to customer service by leaning towards achieving internal metrics such as net promoter scores (NPS) and average call handle time. What isn't well-measured is how easy they are making it for customers to interact, and how they are reducing the amount of confusion about products, responsiveness to customer enquiries, and embracing customers when they just need service and not sales.
Some great examples can be found around the world, including First Direct in the UK and Capital One in the US. First Direct designs all its interactions (especially service activities) to reduce customer effort. Their integrated channel approach means digital actions have minimum keystrokes, the payment and enquiry functionalities are the same, independent of channel, and there is no interactive voice response (IVR) to fight through when you call. The outcome is the highest NPS of any UK bank (Retail Banker International 2019). Capital One has a data-driven strategy that pre-populates and predicts the needs of customers using artificial intelligence (AI) (Berrada 2015). This enables incredibly fast interactions and decision-making, and the outcome enables Capital One to continue to grow market share year on year.
The future success and profitability of banks operating in Australia is predicated on their ability to shift thinking and align the mandate of their executives to meet customer expectations. When this happens, banks will experience more bottom-line growth with the added bonus of starting to live up to their social promises of caring for customers and their communities.
James Johnstone is Datacom’s head of commercial strategy for our Connect business. He is passionate about combining his experience in IT and customer service to advise on how to improve the service experience for our client’s customers.