Treating Customers Fairly

If you’re an IFA or an accountancy or other financial institution with a retail investment management service, then ‘Treating Customers Fairly’ will soon be a MUST HAVE component of your business. From December 28th 2008, firms regulated by the FSA will be required to demonstrate that they treat their customers fairly; so as customer-focused marketers we must ask: 

• How do you treat yours?

• What do they think?

• How do you know?

• What do you do about it?

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Managing and measuring the expectation and experience of your customers is vital; not only to meet your professional and legal obligations through the FSA, but also to build sustainable value into your business.

Customer Value

Customers create ALL VALUE for a business – even brand value is calculated based on factors such as NPV of customer base and brand equity (the likelihood of customers wanting your brand).  Without customers, there is no business.

In the SHORT term they provide cashflow; an income, a margin. But in the LONG term – how likely are they to buy again?  

• Your strong brand can foster loyalty and trust, but …

• Bad experience will reduce future buys, which DESTROYS value.  Events today build or destroy value tomorrow … 

• And the CEO or Managing Partner who announces that his future forecasts are lower, suffers a drop in his share price TODAY!

• By Treating Customers Fairly you will build POSITIVE brand association and BUILD future value.

Customer Insight

Customer insight is priceless. You are already experts in your market and know your customers well … or do you?  

• Is your customer dialogue regular, recorded and sustainable?

• Is it embedded into your business at a cultural, behavioural and process level? 

• Do you ask the right questions, listen, and act on the answers?

• Do you communicate your insight to staff?

• Do you communicate back your actions to customers?

Here’s how you can manage and measure the expectation and experience of your customers:

A deep understanding of customers

• the Business Plan or marketing plan may already target certain types of customers in certain markets; this is your segmentation. What does it tell you already about your customers' expectations?

• if you record customer data in a ‘data warehouse’ (transactions audit) you will be able to determine buying patterns and spot trends

• your salesforce or business development team will have a close feel for what’s happening – if a little biased, sometimes!

• market analysis will tell you what’s what in your markets – competitors tempting away your customers with new, better or different products for example, or upcoming regulation

• your suppliers and distributors will also have a view

You need to formally record and analyse all this data. This is why the large organisations have CUSTOMER INSIGHT managers – even teams!

 

Customer research & feedback – ongoing measurement

Customer KPIs will depend on your company size, structure and business model, but top-level aggregated measures might typically include:

     

1. Customer Focus.

2. Product Quality and Value.

3. Service Performance and Delivery

4. Likelihood of Future Use

5. Likelihood of Recommendation

6. Comparison with Competitors

You can measure, record, analyse and track these customer key performance indicators through regular client surveys, and other touchpoint feedback mechanisms, such as:

• Complaints

• Enquiries

• Event feedback (experience)

• Inbound call centre reports

• Outbound customer care calls

• Observation

• Collaboration (client panels)

• Performance audit (staff job evaluation, TCF and values)

Analysis and Insight

You have to work hard at understanding what the data is telling you; customer satisfaction is not the same measure as customer fairness and you must be able to distinguish between the two and act appropriately.

• More sources = more comprehensive = more difficult.

Make sure your Marketing Manager can do this, or has someone who can. If not get outside help.

Your analysis of customer feedback may result in new actions, new priorities, new communications. It may impact on business strategy. And because this management approach is a system, you will be able to demonstrate continuous improvement in ensuring fair outcomes to customers.

 

Communications

1. Your customers may be willing to give you feedback, and that’s great. But in return, they’ll want to see how you have acknowledged the value of their input: so communicate. Demonstrate how things are changing for the better. If you take no action, or take action but don’t tell anyone, then you’re unlikely to enjoy their participation in future surveys. Consider customer magazines or newsletters.

2. Your staff should be ahead of the curve in understanding what customer fairness means and how they can make it happen. A customer focused workforce won’t happen by chance. Communicate with them; staff magazines and newsletters, intranets, climate surveys and employee engagement programmes are all valuable tools at your disposal.

3. Your product, sales and marketing materials must be clear and easy to understand. Test them through the customer feedback processes described. If you re-write them, test them again so there is no doubt.

If you don’t have an in-house writer, get outside help: effective, engaging writing is worth its weight in gold.

 

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