Posted by Ajay Kelkar on Sun, Aug 22, 2010
Credit cards helping you save-that sounds like a oxymoron! Are banks trying to become more customer centric!
Debit & credit cards are different silos within banks-Credit cards operates as a separate P&L and often the Debit card reports into the Liability business head. And of course it is rare for the silos to talk to each other in any business! So how on earth can these businesses become more Customer centric!
Credit card companies in the US that once were a vehicle for out-of-control spending are now helping consumers stay out of debt. Citi and MasterCard Worldwide announced that Citi will implement the consumer application in the U.S. of MasterCard inControl – a service that gives cardholders the ability to set spending controls and receive real-time information about their accounts. By itself this is nothing new, Quicken & others have been pushing this service for a while now.
Interestingly, MasterCard’s announcement comes days before the final provisions of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, the most comprehensive overhaul of the credit card industry in history, goes into effect today, August 22.
Dan Ariely the Behavioural economist has spoken about a “self control” credit card.
But is it practical to expect a financial institution to gustily embrace such a concept especially when they earn billion in “interest charges”. Is there an opportunity out there for a bank to be truly “customer centric” without “breaking the bank”!!
Here, from Dan Ariely’s Predictably Irrational is the idea of a” self-control” credit card:
A FEW YEARS ago I was so convinced that a “self-control” credit card was a good idea that I asked for a meeting with one of the major banks. To my delight, this venerable bank responded, and suggested that I come to its corporate headquarters in New York.
I arrived in New York a few weeks later, and after a brief delay at the reception desk, was led into a modern conference room. I began by describing how procrastination causes everyone problems. In the realm of personal finance, I said, it causes us to neglect our savings-while the temptation of easy credit fills our closets with goods that we really don’t need. It didn’t take long before I saw that I was striking a very personal chord with each of them.
Then I began to describe how Americans have fallen into a terrible dependence on credit cards, how the debt is eating them alive, and how they are struggling to find their way out of this predicament. America’s seniors are one of the hardest-hit groups. In fact, from 1992 to 2004 the rate of debt of Americans age 55 and over rose faster than that of any other group. Some of them were even using credit cards to fill the gaps in their Medicare. Others were at risk of losing their homes.
Now the ground was ready and I started describing the self-control credit card idea as a way to help consumers spend less and save more. At first I think the bankers were a bit stunned. I was suggesting that they help consumers control of their spending. Did I realize that the bankers and credit card companies made $17 billion a year in interest from these cards? Hello? They should give that up?
Well, I wasn’t that naive. I explained to the bankers that there was a great business proposition behind the idea of a self-control card. “Look,” I said, “the credit card business is cutthroat. You send out six billion direct-mail pieces a year, and all the card offers are about the same.” Reluctantly, they agreed. “But suppose one credit card company stepped out of the pack,” I continued, “and identified itself as a good guy--as an advocate for the credit-crunched consumer? Suppose one company had the guts to offer a card that would actually help consumers control their credit, and better still, divert some of their money into long-term savings?” I glanced around the room. “My bet is that thousands of consumers would cut up their other credit cards-and sign up with you!”
A wave of excitement crossed the room. The bankers nodded their heads and chatted to one another. It was revolutionary! Soon thereafter we all departed. They shook my hand warmly and assured me that we would be talking again, soon.
Well, they never called me back. (It might have been that they were worried about losing the $17 billion in interest charges, or maybe it was just good old procrastination.) But the idea is still there-a self-control credit card-and maybe one day someone will take the next step.
Posted by S Swaminathan on Sun, May 30, 2010
Most often hospitality industry talk a lot about customer service at the property as a key differentiator to customer experience & satisfaction.
I believe this is not the case and most often, it starts with even before the customer visits the hotel or the restaurant of choice. Also, there are many a times, the post usage experience is forgotten and very rarely have I ever seen any credible data-led customer marketing intiatives in this phase.
It was interesting to see Intercontinental Hotels do very interesting customer marketing work in this area. Here are some interesting facts:
- Intercontinental Hotel Group’s (IHG’s) uses of data-driven marketing to improve communications with existing customers and prospects is an interesting case study for many hotel groups across the world.
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Lincoln Barrett, vice president for guest marketing and alliances, shared that, for IHG, building a customer-centric marketing strategy is based on 3 Key pillars:
- Invest in technology
- Expand into new frontiers
- Build a centralized customer organization
She was talking at the UNICA Marketing Innovation Summit in Orlando.
- She talked about the need for real-time data mart that would allow IHG to match the data it was gathering through proprietary and third-party sources to existing customer information.
- According to her this step also made it possible to gain immediate access to data for analysis or campaign building purposes – a significant upgrade to IHG's previous functionality, which updated records in batches and only made data available some 30 days after a customer incident (like a hotel stay).
- She talked about some interesting trends in hospitality Marketing - Right Time marketing, Channel Synergy, Glocal Communication, Non-member marketing etc.
Posted by Ajay Kelkar on Sun, Jun 14, 2009
Last week, Cequity was speaking at an event hosted by the Retailers Association of India(RAI) and the topic was really about how Retailers can make Customer experience their true diffrentiator!
The interesting thing in Retail is that eventually ,competitive advantage in location,merchandize assortments & price can be replicated by competition ,but Customer experience can be a unique diffrentiator. The difficult thing about this is that Retail brands have so many touch points with customers and how do you make each of these interactions "memorable".
Many organizations,especially in growth markets & industries are already dangerously "out of synch" from their customers. One of the indicators of this is this Bain’s research
that found 80% of companies believed they were delivering a superior
customer experience while only 8% of their customers thought they were receiving
a superior experience.
I believe that the key lies in not making the "customer experience" the accountability for any one function but rather making it a key company competency across function. Bruce Temkin of Forrester has this interesting perspective "Treat customer experience as a competence, not a function.
Delivering great customer experiences isn’t something that a small
group of people can do on their own — everyone in the company needs to
be fully engaged in the effort. It all starts at the top; the CEO and
his executive team need to be fully engaged in the effort. To keep a
companywide focus on customers, companies need a systematic and
continuous approach for incorporating customer insights into all of
their efforts. That’s why we recommend building a voice-of-the-customer
program".
In the last 12 months Customer experience management (CEM) has started to get more profile but it is still just a good idea emerging into an area of marketing thought currently dominated by CRM. CEM is currently a poor cousin to CRM. If it is to grow up and become a powerful business tool it must move out of marketing and directly link itself to business outcomes. See what Adam Ramshaw has to say about ‘Will Customer Experience Management grow up big and strong like its rich cousin CRM?
http://crmguru.custhelp.com/cgi-bin/crmguru.cfg/php/enduser/std_adp.php?p_faqid=1638
Posted by Ajay Kelkar on Fri, May 08, 2009
The complaining customer - we just can’t stand them! Well, most of us can’t stand them. The reality is that business organizations should love them. Shep Hyken comments that "A complaining customer tells you where you can improve. They actually come forward and show us where we make mistakes. But, most of the time, people hate to hear the complaints. First, a few facts you should know about people who complain. Most of the time, when people have a complaint, they complain to everyone else rather than the person or people who caused the complaint. If you resolve your customers’ complaints, you will keep them most of the time. But first you have to know there is a complaint. So, how can we find those complainers? Well, most likely customers won’t tell us, so, we have to ask them. It is that simple. Call them up or ask them in person. Actively solicit feedback to find out what they are thinking."
And most criticaly use Customer behaviour data to spot Customer service failures as they occur. Customers are constantly leaving behind a data footprint of "failed brand promises". Direct data analytics to spot incidents of customer promises "not met". The crux of " Analytical marketing" is using data to drive an improved customer experience. Imagine if a bank were to call you up and say " I am sorry sir ,we are one day behind schedule on your cheque book request,please accept our apologies and your cheque book will be with you tomorrow morning". Or better still build predictive models to find customers where "service levels are likely to slip" and then proactively monitor that customer's transactions to create a moment of delight.
And when you find a problem or complaint, resolve it on the spot. No company is perfect. So find out what those imperfections might be. And, when you hear about a problem, fix it. And make sure you give that customer a reason to come back so you can do it right the next time. Take that moment of misery and turn it into a MOMENT OF MAGIC.See what Shep Hyken has to say about ‘The Complaining Customer’http://www.hyken.com/Article_11.html
Posted by Ajay Kelkar on Thu, Apr 30, 2009
In this down economy, organizations must maximize the value they get from every available resource. Often CRM has been thought of as a long term strategy and companies have looked for long term returns from these investments.What gets missed out is that there are many ways to get "quick wins" from CRM. Too many CRM initiatives have failed becuase too much effort was spent on creating effective capability and not enough effort spent on "finding and extracting short term profit opportunities". Have a look at this interesting article from Mc Kinsey which talks about how you can use CRM to drive short term profitability enhancement.Take a look at what Mc Kinsey calls Tactical CRM !!
Also with the advent of software-as-a-service (SaaS) technologies, your organization can easily and cost-effectively extract greater value from your CRM - and demonstrate greater value to your customers. Often building organization capability takes years ,but using the SaaS technologies allows you to bring in a specialist team along with a customized technology application.
See what Michael Zirngibl, CEO, Angel.com has to say about ‘Extract greater value from existing CRM applications'.
http://www.dmnews.com/Extract-greater-value-from-existing-CRM-applications/article/126869/
Posted by Ajay Kelkar on Sun, Apr 26, 2009
Airmiles, the rewards program owned by British Airways, is launching a new company devoted to managing white label loyalty programs for other businesses.
It is interesting to see how the core proposition of a Loyalty program,which is to enable "profitable growth from loyal customers" can get quickly re directed to an entirely new business model. Why would a business transfer its core strategic diffrentiator on a platform and make it available to others?
The Mileage Company, which went public this week, will run the existing Airmiles program and British Airways' frequent flier program, BA Miles. Andrew Swaffield, managing director of The Mileage Company feels that since the recession has really started to bite around the world, loyalty points are more valuable to customers, and loyalty schemes are more valuable to businesses who are looking for ways of keeping customers loyal and ensuring they don't lose them to the competition.
The Mileage Company will use some major lessons gleaned from 20 years in the business to drive strategy for its new clients. It will stick to the tenets that successful reward schemes must be simple and consistent, with rewards that are attainable. The Mileage Company will use its particular expertise in the travel arena to woo new clients from that industry. Retailers and service providers also have shown interest in working with the company, Swaffield said, particularly those with higher-income customers. Airmiles' recent success could help encourage new clients to climb aboard with The Mileage Company.
See what Lauren Bell has to say about ‘Airmiles to help others manage loyalty programs'.
http://www.dmnews.com/Airmiles-to-help-others-manage-loyalty-programs/article/130696/
Posted by Ajay Kelkar on Sat, Apr 18, 2009
Each time a customer makes contact with an organization through any channel, it is an opportunity to build the relationship and also revenue!In fact even a customer complaint call is actually a gold mine,because very few customers actually care enough for the brand to actually complain! In growth countries like India ,the added opportunity is to use the inbound calls as vehicles for customer education leading to better onboarding of customers.
There are monumental gains to be realized when companies prepare themselves to engage with customers who are calling in. When consumers contact an organization, whether a communications firm, financial institution, retailer or otherwise, that organization has already incurred a cost, simply by answering the phone or putting up a Web site. The challenge is how to more effectively convert those interactions into value opportunities for the consumer and the brand alike.
In order to do this, marketers need to change their perspective and let the customer history, marketplace and business objective drive the engagement at an individual level. Aligning key elements of the customer engagement model, such as channel, cycle, content, cost and competition, as well as embedding advanced analytics into the offer catalog, facilitates personalized one-on-one communication. With an integrated process, high-volume consumer brands can increase conversion rates, identify qualified leads, improve retention and increase satisfaction levels by engaging consumers in targeted conversations.
See what Diane Lucero has to say about ‘Optimizing customer engagement'.
http://www.dmnews.com/Optimizing-customer-engagement/article/127545/
Posted by Ajay Kelkar on Sun, Sep 07, 2008
Do Banks and other large customer facing companies really want to be Customer centric?Forrester recently did some interesting research about the need for Chief Customer officers and the interesting fact that this role is best played by people having two traits: 1) Very high energy levels to be able to drive change & 2) High degree of patience because large organizations take time to change. We at Cequity have always believed that organizations need to move beyond their "silo based" thinking and begin to "think customer". Maybe a good place to start is to start focussing on Customer profitability and not only brand/product line profitability.
http://searchcrm.techtarget.com/news/article/0,289142,sid11_gci1316019,00.html