Featuring Don Peppers and Martha Rogers, Ph.D.
Cashing in on
Financial institutions must do a better job leveraging customer data to rebuild trust.
Recognized for over a decade as one Don/Martha of the leading authorities on customerfocused business strategy, Don Peppers is an acclaimedauthor and a founding partner of Peppers & Rogers Group, the world's premier customer-centric management consulting firm that provides clients with world-class customer strategy, flawlessly executed, for bottom-line impact.
s financial institutions begin to pick up the pieces from the last 18 months of disruption and the competitive landscape shifts, many
expect a new wave of consolidationas stronger institutions acquire weaker players. The challenge for buyers: rapid integration of the organizations they’re acquiring to achieve higher levels of customer service. Even banks committed to going it alone face the challenge of caring for skittish customers in a multichannel environment. In this 1to1 Executive Dialogue, Don Peppers, founding partner of Peppers & Rogers Group, and SteveMuran, financial industry subject matter expert with Infor, talk about the importance of customer retention, the need to integrate disparate sources of data, and the opportunity for financial institutions to rebuild customer trust as a means to competitive advantage.
With all the disruption in the financial services industry, how are banks performing in terms of their customer focus?
DONPEPPERS: One of the biggest problems facing the financial services industry is
Steve has 18 years experience developing and executing business strategies for service companies. He has spent nine years working with financial services companies and has seven years of experience devising sustainable CRM strategies and implementing the respective programs. He also spent eight yearsconsulting Fortune 500 companies across industries.
the significant loss of trust they’ve suffered over the past several months. Very few customers trust their banks, credit card lenders, or their money people in general. They’ve seen too much abuse.
STEVE MURAN: I’d agree with that. Clearly you see people shopping around, particularly customers of some of the larger banking institutions. Now you seepeople taking a closer look at community banks or credit unions, looking for a personalized experience. There’s a lot of fear in the marketplace. With the emergence of online banking, it’s very easy now to move your account from one bank to another. The barriers to entry are down.
What must banks do to win back lost consumer trust and retain existing customers?
DP: The first step in recoveringtrust once it’s been damaged by some event – in this
case, it’s a systemic event – is being extremely straight and fair and open with customers. Tell them frankly what you’re doing and why. Tell them how you intend to work in the customers’ interest and when you intend to make a profit. The next step is taking action to redress the issues. Sometimes a promise of doing better will help, butsometimes promises followed by inaction are worse than doing nothing. So if you do make a promise that you’re going to do better, you have to take action.
SM: For me, customer trust always
of useful services and products. Fundamentally, you have to visualize your business in terms of creating the most possible value from each customer, because customers are a scarce resource, as scarce as laboror capital. And they’re not easily replaced. Think about how customers create value. They create short-term value through their transactions, which
which ones are the most profitable. There’s analytical sophistication in the risk management side, but that’s clearly lacking on the marketing side, where marketers struggle to deliver actionable customer data. In many cases, they don’t even have...