Credit unions and small banks: level up your CX expertise

Once the focus is on your customers or members, not products or internal processes, you know you’re on the right path. Look at your interactions with your customers today and challenge them. Are you meeting their needs? Are you solving what they consider to be their biggest problem? How do you know?

According to Capgemini, 75% of companies think they’re customer-centric, yet only 30% of their customers agree. We call this the empathy gap. 
 

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With more choice, CX is the deciding factor for whether companies survive or fail. Despite customers rarely switching bank providers, some are ready to exercise their power. Customers who are considering a switch are looking for low-cost offerings, personalized products, ease of use, faster service, and better features. 

To avoid losing market share, your team must have a deep understanding of your entire customer journey, including all touchpoints. Whether online or in-person, whether you have control over them or not. This understanding will empower you to confidently assess where you can make changes that will have the biggest impact on customer loyalty. 

Introducing customer empathy

Customer empathy is developing a deep understanding of your target audience and customers’ changing needs and expectations to ensure the experience you provide online and in-person consistently exceeds their expectations. For empathy to work, it has to be infused into your organization’s culture. While not a success metric, customer empathy is how you influence your success metrics. It's your company's north star. 

Building empathy gives you a direct sightline into what customers want by gathering their feedback and opinions at the cadence of your choosing. Create a culture of empathy by sharing customer feedback across your organization. This gives business leaders, executives, board members, and other functional areas insight into customer needs. Gain stakeholders through changes implemented using customer feedback. 

Empathy flourishes when customer and member needs are brought closer to decision-makers. With empathy, you can: 

• Innovate faster by learning more about your prospects and customers, such as their pain points, then design solutions to meet their needs. 
• Drive business growth by identifying low-lift areas where you'll see the highest ROI and impact. 
• Reduce risk by investing in solutions that customers actually want versus spending money on things that don't lead to results. 

Scaling customer empathy = scaling customer loyalty

Historically, geography decided a small bank or credit union’s customer or member base. Thanks to the digital age, consumers have more choices than they know what to do with. Your customers can be anywhere, anyone, and their loyalty is up for grabs. So, what does it take to earn it?

Discovery

To determine what to build next, supplement business strategy, usage analysis, and instinct with a deep dive into customer and prospective customer interviews. Interview people in a market that you’re interested in learning more about. These interviews will provide you with a prioritized list of the most critical unmet needs, and the size of the market.

Map impact by determining one measure that matters for each team or initiative.

When you’re looking to educate others, don't tell them the results, show them. Use video feedback to reinforce the vision and roadmap so that everyone can move forward together with a shared understanding of your target customer.

Design and build 

Once you have a clear understanding of the problem you’re trying to solve, start by showing your target audience some concepts. These could be static images, landing pages, written descriptions, or marketing collateral. This helps you narrow down the feature set and value proposition. As you increase your understanding and the fidelity of your solution, continue to test prototypes, both for usability, understandability, and value. When you’re close to launching a new product, test the live code with customers, and run betas. 

Align to the design framework the team is already using. Commonly used frameworks are: 

Design Thinking

A human-centered approach to innovation that draws from the creator’s toolkit to integrate the needs of people, the possibilities of technology, and the requirement for business success. Regardless of the order you complete the stages, the most important stage is “empathize.” Customer empathy should inform everything your team does to ensure that your customer is the center of the experience. 

Double diamond

A non-linear process for exploring an issue widely or deeply (divergent thinking) and then taking focused action (convergent thinking). The four principles of the double diamond are to put people first, communicate visually and inclusively, collaborate and co-create, and iterate, iterate, iterate. All of these steps help to keep the focus on the customer throughout your process. 

Don’t forget to talk to non-customers too. These should be people in your target audience but not familiar with your offering or brand. This will help you avoid the curse of knowledge, a cognitive bias occurring when an individual, communicating with other individuals, unknowingly assumes that others have the background to understand. No matter how hard you try to put yourself in a first-time user’s shoes, it’s nearly impossible once you’ve been working on a product. Be sure to always get an unbiased perspective by collecting feedback from people from your target audience who aren’t already familiar with you. 

Launch and evaluation

Once an experience has launched, track usage and customer feedback, consider conducting usability testing of the live product with people who have and haven’t had a chance to use it. All this leads to incremental improvements and feeds into the discovery phase for new ideas. 

Be sure to show stakeholders the responses to the new product, idea, experience, or whatever it is you’ve created. 
 

Additionally, there were several benefits of using UserTesting that were not quantified for the study: 

• Elevated impact of customer insights - attributing profit improvements to the influence of qualitative insights elevated its position within the organizational hierarchy. 
• Fostered a culture of empathy - spreading customer feedback enabled customer insights to reach more corners of the organization. 
• Increased customer satisfaction -  customer loyalty was a byproduct of increased customer satisfaction. Customers were having better experiences when their insights and feedback were taken into consideration and put into action.
• Provided business value from faster time-to-market - efficiencies in the design process translated to faster time-to-market for products and services.

Conclusion

While credit unions and small banks tend to be naturally customer-centric, the digital world is changing what that means. As we transition into an economy where consumers seek top-notch experiences, credit unions and small banks are competing against a slew of new contenders. Meanwhile, the coronavirus pandemic pushed the digital experience to the forefront. Luckily, your digital transformation plan and the best strategy to compete in the experience economy are the same–customer-centricity. After all, businesses aren't going customer-centric for no reason. There are real benefits and ROI for financial firms as well as the consumer.