How to champion customer loyalty during a crisis: a simple framework for banks

in Industry Insights, 28.07.2020

When the Coronavirus first made headlines last November, I could not have fathomed the chaos it would wreak across the globe. Like many I listened, and then continued with my life assuming a virus in the far east Asia would have no impact on me in Luxembourg. Eight months later and we have seen lockdown measures put in place, borders closed and all sense of normalcy cease.

This crisis has had a significant impact on banks and the traditional relationship with the customer. Banks need to adapt alongside the customer as we continue in this pandemic period and beyond. This blog highlights the six key areas banks can look at and invest in to champion customer loyalty in any situation.

What impact did the crisis have on banks?

In order to remain functional, businesses made dramatic changes overnight. Banks saw radical operational and IT transformations. However, it’s been difficult to get a real sense of how the banking industry is coping months later. In order to better understand the situation, KPMG teamed up with the Digital Banking and FinTech Innovation Cluster of the Luxembourg Bankers’ Association (ABBL) to conduct a survey. 43 of the ABBL’s members participated, and the results reveal the main impacts, and how transformation will continue in a post COVID-19 reality.

Banks were able to react quickly and maintain service levels

We know that banks have faced many challenges during the crisis, but our data shows that they did a great job of limiting the impact on customer relations. Two in three institutions managed to be fully operational within five working days of lockdown.

Customer service may even improve in the future

Almost two in three banks say the crisis helped accelerate long-standing digital initiatives. Automation or digital signature projects were silently waiting in drawers and their reemergence is great news for the customer. Shorter wait times and speedier service will likely follow when the projects come to fruition in a few months’ time.

Tips and guidance on championing customer loyalty

The way that banks managed to maintain great customer experience and outstanding customer service during the crisis will undoubtedly be the cornerstone of their growth going forward.

At KPMG, we have defined what we call the “Six Pillars of Customer Experience”—the universal principles that govern all positive human experiences with both customers and employees: empathy, personalization, time and effort, expectations, resolution and integrity.

At the best of times, these pillars are powerful tools for creating successful, sustainable and ethical businesses. But with the global threat of COVID-19, they can act as an invaluable guide to understand behavior in uncertain times. Simply put, they are a set of easy-to-follow principles that help you take a “customer-first approach” in any situation.

NPS SCORE

The six pillars of customer experience

  • Integrity: Doing the right thing, ensuring the needs of the many are met, prioritizing safety, protecting the vulnerable, being seen to act fairly and in all customers’ best interests.

Integrity comes from consistent organizational behavior that demonstrates trustworthiness. For all customers, it is the degree to which the organization delivers on its promises that is consistently top of mind.

  • Resolution: Responding rapidly to customer needs and finding solutions to new customer problems, accelerating innovation.

Customer recovery is highly important. Even with the best processes and procedures, things will go wrong. Great companies have a process that puts the customer back in the position they should have been in as rapidly as possible. But the ‘service recovery paradox’ teaches us that just fixing problems is no longer good enough; the customer must feel great about the recovery experience.

  • Expectations: Setting, managing and meeting customers’ expectations accurately in these difficult times.

Customers have expectations about how their needs will be met, and these are increasingly being set by the best brands they have encountered: “our best experiences become our references”. Great organizations understand that expectations are set strategically by the brand promise, and every day through touchpoint interactions where they need to meet and – if appropriate – exceed expectations.

  • Time & Effort: Making it easy for customers to access information, get essentials, access customer communities and networks helpfully.

Customers are time-poor and increasingly looking for instant gratification. Removing unnecessary obstacles, impediments and bureaucracy, to enable the customers to achieve their objectives quickly and easily, have been shown to increase loyalty.

  • Personalization: Understanding the customer’s circumstances, prioritizing effectively, putting the customer back in control.

Personalization is the most valuable component of most experiences. It involves demonstrating that you understand the customer’s specific circumstances and will adapt the experience accordingly. Use of name, individualized attention, knowledge of preferences and past interactions all add up to an experience that feels personal.

  • Empathy: Showing that you care, choosing the right emotional response to meet the customer’s circumstances

Empathy is the emotional capacity to show you understand someone else’s experience. Empathy-creating behaviors are central to establishing a strong relationship and involve showing the customer that you know how they feel by going that one extra step.

Be close to us, understand us

At the end of the day, we are all customers. And, as customers in times like these, we are as frightened as everyone else. We no longer have the patience for a customer experience that lacks empathy. We need our bank to be close to us, to understand our concerns, to be proactive and supportive. This is the moment when we need to talk to a human being, to a person that recognizes us, helps us, shows they care. Whether we are a retail client looking to ease our credit repayment plans, or a small shop owner facing cash flow issues as bills remain unsettled, or a private banking client worried to see our invested assets melt like snow in the sun, we need our bank to understand our needs, and to react to them — fast. This means both reassuring us and adapting quickly to provide the right products, services and solutions.

And the key pillar to work on during a crisis is …

Among all the qualities we could expect from our bank in times like these, empathy is undoubtedly the central element. Organizations that demonstrate empathy, that put themselves in their customers’ shoes, that were there when times were rough, are very likely to secure customer loyalty in the future.

Pervious page Next page