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Q&A: still lacking--that critical customer conversation.

HENRY DOSS is a principal at Avenue ISR, a market research firm in Traverse City, Mich., where he has empirical conversations with his customers about how they can have the same with theirs. He was a senior vice president, sales and service at First Union for 10 years. Most recently, he was a senior vice president, retail bank, at PNC. He is a pioneer in sales force automation and customer information management.

What's your beef these days when you walk into the bank lobby?

I can't help cringing when I walk into my old bank. Don't get me wrong: I get treated great. Hello! Good to see you again! The branch looks great, keeps Teller lines short.

But nobody ever says to me, "You used to keep six accounts with us, and now just one. Your average monthly balance went from six figures to a bare minimum. What happened, and how can we get your business back?"

This bank has proudly told the world that it has invested millions in the customer experience. Branding, data analytics, customer profitability, sales and service training, branch automation, and a 360 view of the customer--they've tried it all.

Yet nobody there has ever tried to have a substantive conversation with me about the only thing that would contribute directly and immediately to bank profitability--my use of their services.

So banks are failing to initiate this critical customer conversation?

This is the critical missing piece of the customer puzzle, and its absence is costly. Consider: It is not unusual for 85 percent of the customer's total wallet to be somewhere else

For all of those 15 percent-penetrated customers with far more needs than the bank is currently meeting, the bank has full access to their banking histories, accounts and contact information. All that lies between the bank and a gold mine is having a focused, intentional conversation about what the customer wants and needs.

So why isn't that conversation taking place?

I believe it is because few banks have taken the steps necessary to ensure that the "customer conversation" is empirical. They haven't insisted that it be based on information gained by means of observation, experience and experiment. They haven't made it quantifiable, measurable and measured.

Further, since they haven't made it empirical, it follows that they have not made sure that all customer touch points have a shared knowledge base and "speak" with the same purpose.

What should the "customer conversation" sound like?

Three things drive the empirical "customer conversation": insight, management goals, and sales and service. Insight refers to the data, information and conclusions drawn from analytics and customer research. Management goals are what can be achieved when these insights become actions. Sales and service is where "insight" and "management goals" meet the customer.


Are each of the three drivers of the "customer conversation" rendered empirically?

Your people should be quoting empirical insights like: "Seventy-eight percent of our small-business borrowers do not have a mortgage with us--and should." "Our profit from adding insurance to a checking-only account is greater than adding a debit card."

Instead, they say things like: "June is prime time for home equity loans."

In the "management goals" category, empiricism is even more powerful. Many banks settle for a version of, "We will increase our cross-sell ratio to 3.5." Pity the associate trying to launch a customer conversation on that goal.

Explain how empirical goals lead to empirical conversations.

Here's an example of a management goal: "We will review each small-business customer and directly contact those who we know are candidates for personal mortgage or refinance, with the goal of converting 25 percent of the total small-business pool from non-mortgage to mortgage status."

In the "sales and service" category, my experience at my old bank is a prime example of the antiempirical conversation. If that bank knew the value of the "empirical customer conversation " I would be greeted with something like: "We realize that we did not have the value proposition you needed when you decided to use other providers. We regret the inconvenience to you and the loss of your business. But now we understand that you operate a small business. We would like to bank that business for you and are prepared to make it very attractive for you."

How does a bank make the shift from the theoretical to the empirical?

There are four things:

1. Start by optimizing your use of customer data by focusing on needs and insights, at the strategic and the customer level. Render them empirically (data and insight).

2. Ground your goals in the empirical insights and be certain that goals are clear and actionable at the front line employee level (set goals).

3. Then establish a specific, measureable, brand-aligned customer conversation; train the conversation; set goals for the conversation; and inspect/coach the conversation (sales and service alignment).

4. Finally, align the entire management team to a focus on achieving customer-centric goals, and to coaching and leading a market-distinctive empirical customer conversation (culture alignment).

Is it possible to have an effective, institutionalized customer conversation?

It isn't alchemy. It probably doesn't require information that you don't already have easily accessible or analysis that is beyond any community bank's abilities. It simply takes rigorous application of the principles you already espouse and systematic, aligned use of what you've already invested in.
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Title Annotation:Henry Doss
Author:Doss, Henry
Publication:ABA Bank Marketing
Article Type:Interview
Geographic Code:1USA
Date:Nov 1, 2010
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