In a previous post, I argued that the journey of the average customer in the financial services sector resembles a continuum or life-cycle. It is so because a service experience involves multiple interactions or transactions taking place over a long period of time. Take, for instance, mortgages, investment funds, insurances or pension plans. These products require long-term commitments as there is no customer outcome until many years down the line. This type of customer experience is quite different from, say, dining at a restaurant or a trip to Disneyland.
In this new post, I argue that the nature of the journey has implications for the measurement and improvement of the customer experience. In a nutshell, my research suggests that FS firms systematically gather and analyse large sets of customer, operational and voice of the employee data to assess how customers perceive their interactions with the firm. They then implement evidence-based corrective actions to fix the broken points of interaction.
The measurement and improvement process is split up into three main steps. Firstly, all interactions are rank ordered based on their relative importance in the customers’ eyes. From this classification, the moments of truth are established. Moments of truth are critical interactions affect significantly key performance indicators, such as word of mouth and customer loyalty. For instance, an insurance company identified 10 moments of truth in the customer journey lifecycle. ‘Point of claim’ and ‘point of payout’ were particularly critical interactions from the customer perspective.
Secondly, firms select improvement opportunities by identifying major fail or break points. A breakpoint is a moment of truth that is consistently rated negatively by customers. It causes customer pain, disrupts the consumption experience and has a high potential for destroying customer value. Going back to the example above the insurance firm found that not releasing funds in a timely fashion causes their customers a lot of pain and increases the probability that they switch to another provider.
Thirdly, process improvements are implemented to eradicate break points. Given that resources are scarce, focusing on breakpoints that have a big effect on the overall customer experience gives FS firms a way to prioritise their efforts.
To summarise, although managers sometimes believe that all interactions have the same value for customers and should be given equal consideration, my research shows that good organizations: (1) identify the moment of truth from the customer perspective; (2) systematically measure performance on these critical interactions; and (3) dedicate efforts and resources to improving break points.