Killing Two Birds

In a recent global survey, Accenture asked top management at retail banks on what changes they expected to see in their customer’s behavior in this post-crisis era. There are two trends in the top of the list that may seem inconsistent:

But I will argue in this blog post that self-service and personal services are complementary for the multichannel customer and that it is possible to “kill two birds with one stone” with multichannel advisors. Contrary to the branch bashers, I will argue that branch based advisors, that are available to their customers both on-line and in the branch provide both optimal customer experience and unmatched sales effectiveness.

Many branch bashers use the fact that 90% of all transactions are done on-line as evidence to the demise of the branch and the advisory role. But what they forget is that customers want personal advice. A survey performed by Capgemini proved that customers favor the branch when considering mortgages and resolving problems.

But it is not the brick and mortars that the customers value. It is all about relationships, at least if you want loyalty. Relationships build on trust and trust is earned by people, not by brick and mortar or technology. Nordea is an example of a bank that understands this when they refer to themselves as a relationship bank.

What puzzles me is that banks do not capitalize on their personal relationships on-line. Imagine if customers can see whether their advisor is available when they log-on to the on-line service and they can start a dialogue on-line with them using chat, voice or video. To me, it is a natural extension that multichannel customers are served by multichannel advisors.

The concept with multichannel advisors is not only a question about providing a superior customer experience to the multichannel customer. There is a solid business case for having advisors to serve customers both in the branch and on-line. Today, few advisors have more than 50% customer facing time. The low sales effectiveness, not the cost base, is what is causing the high customer contact costs in the branch network. Both Handelsbanken and Swedbank have recently told their investors about the potential to increase shareholder value by increasing their advisor’s customer time and conversion rates. My own back-of-the-envolope calculations indicate that there is a potential to increase revenues by 15% and the operating profit by 30% in the branch network if the lowest quartile of advisors perform on the same level as the average. And I strongly believe that multichannel support may be instrumental in such a transformation.

From my experience, it is common that low performing advisors explain that they cannot schedule too many customers meetings in order to ensure availability for drop-in customers. They will probably appreciate the fact that the probability for drop-in customers will increase exponentially if they are available on-line.  And customers that have had physical meetings will probably reward the advisor with higher conversion rates if they are available on-line for questions that arise when the customer discuss the recommendations with their partner.

In my next blog post, I will give my view on the roadmap to the multichannel advisor, but, as you will see, I do not think that branch based advisors will be first on-line.

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