I’ve been in discussions with a ResponseTek (www) over the last few weeks. Their products are ahead of many companies in any market at the moment. Why? Because many companies simply don’t see the value of their customers to them. They don’t appreciate the value of customer advocacy and the immense value of the opposite – a customer telling ten people how poor their experience was.
My goal is to be able to build a business case to justify the investment in a product suite, such as Reponstek’s, and the subsequent implementation of it into a financial organisation where I am currently consulting. Building a business case should be easy, especially for someone who’s done it more times that I can remember. Not at the moment it’s not.
During my “personal brainstorming” I realised that I don’t think that banks truly value their customers. There is little fear that customers will leave and that churn will be high. I also think that there is very little competition in the retail banking market. Interest rates for both borrowing and deposits are all comparable, services (such as web access) are all comparable and more fundamentally the products are almost constant across all banks.
From a customer’s point of view, few will choose to move their mortgage to a different lender to gain 0.1% interest advantage, particularly when you consider the costs in doing so and the time and frustration involved. Furthermore, few would move their current accounts (checking accounts for U.S. readers!) simply because of the hassle involved in changed all those direct debits and standing orders that we all have.
So in trying to answer that dreaded sales question of “Where’s the pain”, I’m not sure that I know the answer. However, I do know under what circumstances I will. Before we come to that, one more point.
Although I’m used to it, I am still surprised at the lack of innovation, reliance on process and the hiding behind it that occurs in large organisations. Now I’m not trying to generalise here and say all organisations are like this but many are, and I’ve worked in many of them. Why does it still take weeks to process a new mortgage application. It’s a rhetorical question, please don’t volunteer reasons (read excuses) rather think about how to reduce this to days.
In smaller, more commercial organisations if you don’t get return a call from a customer for a week then you probably shouldn’t bother – they’ve gone to your competitor(s). If you deliver sub-standard products you’d better make amends or risk losing the customer, and not just that one all of the ones that they’ll tell also. So there is competition here, fear of loss of customer and the corresponding loss of revenue.
How about this then, a globalised banking industry. When you want your mortgage you’re not limited to a few “key” lenders on the high street but a few thousand across the globe all of who will loan you money secured on your property in your home country. Now we have some competition! How will your decisions be influenced now by interest rates and completion times I wonder. Whoever can complete in 4 weeks can take a jump, I want the bank who can complete this week. Don’t say it can’t be done – please.
So will we have a virtual monopoly in banking due to lack of competition in the market place? Will we continue accept as “the norm” delays due to inefficiencies and bureaucracy?
The high street is dead, long live globalisation.