The second in a series of five articles published by Mortgage Strategy magazine in March & April 2015, on the fundamentals of business strategy. Read the original article here.
This week we will address an issue that is close to everyone’s heart in the mortgage industry – consistency. Whether we are talking about FCA regulation, lenders’ underwriting policies or property valuations, one thing that is always called for is consistency.
There is good reason for organisations to strive to deliver it, too. Consistency of customer service has been proven to be a value creator for companies of all sizes who are seeking to outperform their rivals.
In a piece of research last year, management consultants McKinsey found strong correlations between top performing companies and consistently high quality customer service. No surprise there, but the interesting thing is that they managed to prove a direct correlation between consistency and profit.
McKinsey found that maximising satisfaction within the customer journey has the potential to lift revenue by up to 15 per cent while lowering the cost of serving customers by as much as 20 per cent.
Trust is a key factor. In the banking sector, customers trusted banks that were in the top quartile of delivering consistent customer journeys 30 per cent more than banks in the bottom quartile.
The numbers paint a compelling argument, but how can you look to replicate them in your own business?
Today, customers are interacting with businesses on more separate occasions and in many more ways than they used to, including social media, of course. To use the example of a mortgage lender, this starts with marketing and lead generation activity and flows all the way through to the completion of a mortgage and subsequent servicing activity.
With many touchpoints, it is vital to have a joined up approach across all channels and to view all these many interactions as a cumulative and integrated customer journey, rather than purely a set of individual interactions. Performing well in each interaction but with an inconsistent approach can confuse customers rather than satisfy them.
The challenge today is to operate in an integrated manner across multi-channels – now referred to as ‘omni-channel’.
Here are three tips for improving consistency in your business:
1. Take a journey-based approach
Aligning your business to focus on the overall journey of your customers is more likely to embed consistency. This might require refining or even redesigning the customer journey among many different individual touchpoints, but it is key if you are to increase revenue and reduce costs – subject to a justifying this via a cost:benefit analysis.
For example, if you are a brokerage, it would be useful to put yourself in the shoes of one of your clients. Think about the point they first come into contact with you, through to them receiving your marketing communications, attending appointments, completing their mortgage and then receiving your retention or cross-sell focused materials in the subsequent months and years. Could you improve the experience of this journey? And if you did, would this enable you to win more customers and write more business, more profitably?
2. Fix negative experiences before improving good ones
Negative experiences can cause significant long-term damage and require many positive experiences to repair the damage, so companies should focus on fixing what is broken ahead of making something good into something excellent. It is important to be honest and use customer feedback to improve processes.
3. Do it now
Patience is getting thinner with customers and they have less time for variability in delivery. Expectations have increased and customers reach their ‘moment of truth’ immediately. There is no benefit in making additional investments to improve customer experience without tightening the consistency of experience.
According to McKinsey, positive customer experience emotions – principally trust – were the biggest drivers of satisfaction and loyalty in the industries surveyed.
Your proposition to customers or clients therefore needs to engage with them in a way that highlights the service you deliver as well as its features and your achievements. This reinforces operational plus-points and consolidates customer opinions of your brand as a strong performer.
Furthermore, customers view brands in the same way they do any other presence in their life. Trust and investing time and energy in a relationship is driven by a combination of promises made – or broken.