Thursday 27 July 2017

Banks must shift focus to customers

Dr Martha Rogers, author, business strategist, and a founding
partner of Peppers & Rogers Group, the world's premier customercentred
consultancy
Dr Martha Rogers, author, business strategist, and a founding partner of Peppers & Rogers Group, the world's premier customercentred consultancy

SHE believes the "terrible mistakes" made by many of the world's banks could have been avoided if they'd spent more time focusing on customers and less time focusing on products, so internationally acclaimed marketing guru Martha Rogers is sure to make an impression when she addresses a Dublin gathering tomorrow.

Flown in by business analytics giants SAS, Rogers' schedule includes a breakfast with 50 or so marketing types and a lunch with 15 senior executives drawn from SAS's Irish client list, many of whom count themselves among the two million worldwide who have read Rogers' litany of books.

Speaking ahead of her Dublin trip, Rogers said her main topic of conversation would be the need for businesses to become more "customer centric", to recognise that "as well as making quarterly income [each quarter], you're also creating or destroying value for the future".

Rogers argues that measuring the value created or destroyed each quarter, or the "customer equity" as it is known in marketing speak, is well within the gift of modern technology, and she insists the exercise is worth the trouble even if it can take up to eight quarters to get right.

"Companies have to understand what value they're creating or destroying, if they don't they're going to make terrible mistakes, we've absolutely seen that with the banks," she adds, using the world's "customer-focused" banks to make her point.

Leading the pack is Royal Bank of Canada, which has been "managing customers instead of products" for five years -- over that time average profitability across their customers has gone up 13pc while the average profitability of their best customers has jumped 20pc, says Rogers.

Fellow Canadian bank CIBC has moved to having people in charge of "customer portfolios" rather than branches, with managers asked to report on how profitable given customers are over a quarterly basis as well as their projected three-year value, encouraging a longer-term view which could arguably have benefited many other banks.

Closer to home, Dutch bank ING is identifying customers whose accounts are running low, checking their credit ratings and then sending them messages offering a "customised line of credit that's just right", an exercise that has a 50pc response rate according to Rogers.

"It [being customer focused] is an opportunity for companies to serve themselves and their customers better," says Rogers. Given the state of the Irish banking sector, any opportunity for banks to serve themselves better is likely to be well received.

Irish Independent

Promoted articles

Also in Business