ORLANDO, Fla.-Financial services providers, including credit unions, have raced to provide as many delivery channels as customers/members demand. But that has raised a new challenge and potential for either high levels of customer/member satisfaction, or frustrating dissatisfaction: integration of those channels.
Executives with two major financial services provider and Nationwide Insurance recently joined to discuss the "Integration of Distribution Channels" during SourceMedia's Best Practices in Retail Financial Services Symposium.
The panel was moderated by Edward Change, VP-strategy and business development with Strands Personal Finance. Joining Chang were Ronald Kerr, chief Internet executive with Nationwide; Jody Bhaghat, EVP-online sales and marketing with US Bank, and Andy Hernandez, EVP-director of channel development and retail banking with BBVA Compass.
Below is a look at what each had to say about a host of channel integration issues.
Q: What do you think customers' expectations are when they visit your sites?
Kerr: When it comes to expectations in customer satisfaction, they are not any different from what your expectations would be: make it easy, make it fast, make it really simple for me to do what I want to do. One interesting thing to me is that when we do customer research, customers are interested in being presented with other opportunities, but it shouldn't be a 'would you like fries with that?' approach. It should be more rational. It might be bundling.
Bhaghat: We think it's very useful to look at these scenarios. We call them personas. How do we design a site that meets their needs? You've all heard the statistic that better than 60% of customers research products online. What's not clear is where are they in that research. We need to solve for those who aren't ready to decide and for those who are. One of the things we've seen and are trying to deliver against is more of a needs-based approach. They navigate through the site according to their needs.
Hernandez: I been in this space 20 years, and what the customer was asking for 20 years ago is the same thing the customer is asking for now. Speed, ease of use and convenience. For us it's trying to stay ahead of how the customer is redefining those. We subscribe to research that shows wherever the customer is going to buy, more than 75% of them are doing the research online.
Q: How do you look at other distribution channels?
Bhaghat: We are seeking to help customers navigate and make it simple. We structure the site according to what the customer's needs are rather than product. If a customer has come back before, or done or completed an application previously, you can tell them they can go right back into the app. But one of the things customers are looking for is options, without distracting them with too much content. That's true in the branch, too.
Kerr: On the property and casualty side for us, the exact same issues are there for us, as well. Our bread and butter is auto insurance policies. The behavior we see from customers is that virtually everyone starts that shopping experience online. But the difference is in how far do they go with that experience online. It has to do with customer preference and how complicated do we make the process.
What we have seen from customers is that with the more complex products, customers are very interested in starting the learning process online, but very uninterested in finishing that process online. They want to learn enough to have a good conversation in person; let me learn enough to protect me from myself and from doing something stupid.
The last part of it for us is that when it comes to closing the sale today, if a customer gets a quote from us online and if they buy that policy from us, only about a third-buy it online. About a third buy on the phone and a third buy in an exclusive agent's office.
Q: On the product side, how do you ensure you deliver adequate product information in the different channels?
Kerr: How we focus here is in line with our market segments. For us one of the key segments is the attitudinal segment we call 'up and comers,' the 20 and 30-somethings. For the products we go deeper on online, those customers generally not looking for the complex info on line. We try to bias our online sales experience toward the up and comers. I don't know that we'll ever enable variable annuity opening online; but for auto and homeowners, that's where we have doubled down our efforts online.
Hernandez: For years the industry has tried to convince bankers that it has to be a multi-channel experience, and for the first time we're starting to see that. People talk about getting an inconsistent experience across channels, and now that is starting to show up in people's dissatisfaction. People want to start a more complex product online, but ultimately online can't satisfy, and they want to come in.
Bhaghat: It's likely the online customer won't complete the application online, so you want to promote the alternative channels. One of the unique aspects of the online experience is the opportunity to capture information about customers in a very rich way. That's where you can create the much richer profile. Leveraging their activities online and capturing that can make the other channels much richer.
Kerr: If a customer online doesn't complete the quote and bails out in the middle, which is typical, we still capture it and feed it to the call center to complete the process, if interested. If they did complete and get a price, they can take that quote and walk into an agent's office and say 'I got a quote online', or (the agent) can start where the customer left off. Think of your own experience. If you have to start from Square One, it's not a satisfying experience.
Hernandez: The issue often is that there is an incentive for the branch employee to at least start the application, but not finish it.
Bhaghat: Being able to funnel information to the call center is important, but you need to be able to score those leads. Some may fall off quickly. What I haven't seen is how that can support the 800-pound gorilla, the branch platform?
Q: How are your institution and your position structured?
Hernandez: I think it's an advantage we have. I recognize many of you don't recognize BBVA. My position has responsibility for all non-branch channels, including card operations. That helps considerably. But we're only as good in the integration promise as the partnership with our branch channel. What may be unique about what BBVA is doing isthat my team exists as a compliment to the branch. The branch is the heart, anchor of our strategy. I report into retail, as does the person overseeing branches.
Kerr: A big part of our distribution channel that is different from the banking business is the exclusive agent, who are not employees. Within our direct business we're trying to increasingly drive 'customer enthusiasm.' We are trying to drive greater levels of retention of our customer base, which is massively important to use in a commoditiezed industry. We average 1% a year growth. We're also trying to drive greater operational efficiency. Rather than being driven channel by channel, we are really trying direct sales and retention and service as the key areas. It's not good enough to optimize by channel; we must optimize by customer experience.
Q: What about capturing the customer signature?
Bhaghat: We capture the first check for the signature card when new accounts are opened online. And the branches are saying 'That's not fair' (due to incentives).
Q: What do you admire about the retail space?
Kerr: I'll give you a real-life example. I bought a fleece jacket online from Land's End. It didn't fit and I returned it to Sears, which has a relationship with Land's End. The next day I got a call from Land's End asking if there was a problem and asking if I had made a decision about a replacement. He reminded me I got a 25% discount for buying online and got free shipping. The point being was that in that one sales transaction I was across three different channels, and that to me was a simple, nice, customer friendly example of integrated information and multi-point distribution.
