From the beginning of time, this is how consumer finance companies have worked: a company sees a need that’s not being met (or something their competitor has done) and they build a new product or offer a new service around it. Then they have a team manage and market that product. At larger consumer finance companies, that team will sit within a group related product teams called a business unit. A very large company might have many of these business units. Occasionally there are efforts to integrate the various products with each other in intelligent ways. Some business units and product teams talk to each other, but many times they don’t. Or not very effectively. And the result is a somewhat jarring, disjointed customer experience.
But there is a new movement afoot in the consumer finance world. A new way of thinking. Not in terms of products that it sells or even people that it sells to, but something else entirely.
A customer episode is an entire experience (from beginning to end) that a customer might have with your company at one time. In other words, the customer has something that they’re trying to do and the episode represents their entire journey trying to achieve that goal. An episodes can be a single interaction like paying a bill online, redeeming rewards points, paying a bill, or disputing a fee. Or it can be an intricate series of interactions spanning weeks – like buying a home.
The organizing principle around this way of thinking is to create an entire customer experience that’s focused around what the customer wants to do.
Episodes can come in multiple varieties
In the omni-channel world, many companies now offer several options for handling tasks. For example, while some customers will want an all-digital experience to shop for, apply for, and finalize a loan, others will only take the digital process up to a point before they want a live human so they can get their questions answered directly. Of course, companies need to make sure the digital + in-person experience is just as a compelling as the all digital option.
Designing experiences can be a differentiator
The good news is that most people have fairly low expectations. Customers and prospects for financial services come to many of their transactions with an expectation that the process will be complicated, time-consuming and designed to be as cheap as possible for the institution even if that creates inconvenience and frustration for them. As a PricewaterhouseCoopers study found, “Compared to other industries, borrowers have low expectations of their lenders. Breaking this mold can be a key differentiator for lenders, as several new entrants have gained significant market share in recent years based on a simpler customer proposition.” By streamlining, simplifying customer actions and eliminating all the hassle factors, financial services firms can significantly place themselves above and apart from competitors and create true customer loyalty.
How to start making the shift to episodes
Identify your core team for the project, generally a highly cross-functional team, and pick one common episode – like paying a bill. Then break the journey into its individual parts and develop some theories around what might not be working and why. Then, over a short period of a couple of weeks, experiment with new ideas, develop a prototype of a new experience, and test it out. Measure the success of your test based on things like time saved and clicks eliminated – but also consider the intangibles like increased customer satisfaction. Then establish a structure, accountability, and governance needed to continually improve on the experience. Because you’ll never get it 100% right in the first go.
Because they are historically siloed organizations, it can be challenging for consumer finance companies to switch their thinking to customer episodes. Many episodes will require a lot of cross-departmental collaboration and that can be difficult. But that also means that there’s a big opportunity right now to differentiate in the marketplace with a superior customer experience. It might take a little bit of organizational rewiring, but the payoff is happier customers, more revenue, lower costs, and a rock-solid competitive advantage.