Use the Good to Outweigh the Bad

Instead of reacting to negative customer experiences and feedback once damage has already happened, an organization is more successful when it takes a proactive approach. It may seem obvious, but the time and effort it takes to overcome a negative experience is much greater than that of maintaining a positive one.

Consider a study on romantic relationships from the 1970s. Two researchers discovered the difference between happy couples and unhappy couples was the balance between positive and negative interactions during conflict. The study found happy relationships had a ratio of 5:1, meaning happy couples had five or more positive interactions to counter each negative interaction. That same recipe for success translates to other types of relationships too, including relationships with customers.

In the business environment, customers require even more positive interactions for the good to outweigh the bad. For example, when it comes to customer reviews, the positive-to-negative ratio can be as high as 40:1, as explored in this Inc. article. This happens because unhappy customers are far more likely to write a review than happy customers. Add in word-of-mouth, and recency bias – there’s more trouble than meets the eye. Customers have higher expectations of product and service quality now than in previous years, which makes vying for their business even more competitive.

We can also look at this from a Net Promoter Score (NPS) perspective. NPS is a market research metric that asks customers how likely they are to recommend a company, product, or service to a friend. NPS is a valuable way to gather insight into how an organization is currently performing and identifies opportunities for improvement. NPS responses fall into three ranges:

• The detractor range is 0-6, categorized as unhappy customers who are unlikely to repeat customers or refer a friend.
• The passive range is 7-8, which includes customers who are satisfied but not excited enough to promote the company or product.
• The promoter range is 9-10, the most loyal and enthusiastic customers. It takes constant dedicated effort to maintain this high score.

The Negative Impacts of a Poor Customer Experience Strategy

When navigating the customer experience, past performance is not indicative of future performance. We’ve all heard it, and when it comes to your brand, it is 100% true. Customers are constantly evaluating and comparing brands. Brand equity takes years to build but can be destroyed by a single tweet – that’s reflective of the impact of a poor customer experience strategy. It adversely impacts the premium a business can command for its product and services and diminishes customer lifetime value. Brands that score low are less profitable and brands that score high are more profitable. The London School of Economics estimates that a 7% increase in NPS increases revenue by 1%.

That’s not all though. Bad customer care has a ripple effect beyond customer retention and growth; it impacts internal team morale and attrition, increasing stress and deteriorating emotional health among employees. Just as it takes lots of time and effort to overcome a bad customer experience, the same is true for employees. It’s difficult to replace great employees. Happy customers and happy employees go hand in hand.

The Importance of Product Design

The most ever-present way a customer interacts with a company is through the company’s product. It’s one of the forefront factors in how customers judge you. Some argue the product is the brand and experience; others say the experience is the product. I believe the entire customer journey is the experience, and products and services provide valuable decisioning influence.

Product design is important in a customer experience strategy, but it is not a magic bullet that can overcome other poor areas of the experience, particularly bad customer service. Examples include long wait times, no live agent to resolve an issue and having to repeat the same information when transferred to different agents. Before, during and after the product, are experiences that either add to, or detract from the journey. This reminds us to break down functional-based silos and not project those onto customers.

All of this leads us to some key customer experience strategy advice:

• Make the customer experience so enjoyable that people don’t want to leave you. Think long-term.
• Stay grounded, honest, respectful, and open to feedback. Learn and pivot quickly.
• People first. Do what’s best for others.
• At the root of all design and product goals, deeply understand what problem or solution you are trying to solve. How are you making someone’s life easier?
• Once you’ve solved this, look at it from different perspectives.
• Challenge assumptions, and always be mindful of ways to improve.

Further Reading

Check out this resource for more customer experience strategy tips Customer Data Analytics Hub provides details on how to get real-time actionable insights across all your customer experience data silos. There’s also some useful information on a reference architecture to build a unified customer profile. Learn how to educate and empower customers.

About Actian Corporation

Actian empowers enterprises to confidently manage and govern data at scale. Actian data intelligence solutions help streamline complex data environments and accelerate the delivery of AI-ready data. Designed to be flexible, Actian solutions integrate seamlessly and perform reliably across on-premises, cloud, and hybrid environments. Learn more about Actian, the data division of HCLSoftware, at actian.com.

Big data is revolutionizing virtually every industry, perhaps none more than financial services. It is giving finance firms the ability to do things they never could before – like roll out new payment systems, deliver data-driven offers and use AI to combat fraud.

Banks, investment firms, stock traders, and others have more data at their disposal than ever before. To generate positive business outcomes, they must master the art of organizing, accessing, and analyzing this vast amount of structured and unstructured data to pull insights out in efficient, timely, and cost-effective ways.

Legacy data management systems are struggling to keep up with the myriad sources and different types of data flowing in at higher velocities. Data platforms operating in the cloud provide a solution to these issues across industries. They also have the power, storage, and scaling capabilities necessary to solve specific data-related challenges that financial services firms face.

Regulatory Requirements

The finance industry, of course, is one of the most tightly regulated of all industries. Many countries require data to stay in their country, which makes it difficult for firms to pull reports and perform analytics in finance across geographical boundaries. Firms wanting to look at how a payment instrument performs in one country vs. another, or on a global basis, face challenges accessing and analyzing that data. Modern data management tools enable them to set up data warehouses country by country or region by region. Analytical tools can study the data in stages, with queries getting rerun against different warehouses, all using one platform.

Data Quality

Data quality is critical in financial services because firms generate reports and perform predictive intelligence based on the data they have. Because data comes from disparate sources, quality is often suspect. There might be some data missing or in a different format. Data management tools can preview the data that is collected, and integration tools can translate data from one format to another. Data platforms can fix data quality issues within systems and integrate with other data quality management solutions.

Data Governance

Because financial services firms also deal in sensitive data, they must maintain fine-grained control as to who has access to specific reports. This is especially true for personally identifiable information (PII). Plus, organizations must adhere to data governance rules, as certain types of data can only be “kept” for certain time frames. Using database management tools, financial companies can comply with timelines on transaction and processing data and create governance rules on access and archival data.

Data Silos

Data silos are a significant problem for financial services companies. They often have credit data, customer data, and marketing data in separate warehouses, governed by separate sets of rules. Data integration tools can connect the sets in one warehouse, where departments can run analytics across forms, functions, and geographies. Data management tools provide the capability to connect to different sources and generate reports in one format.

Data Security

As hackers intensify their efforts and broaden their intrusion tactics, financial services firms must respond with tougher security strategies. It is a challenge because every piece of data that gets brought in or shared must be authenticated for each database it connects with. Organizations need to encrypt data warehouses to ensure that data is secure. Integration tools and analytics software also play a key role in providing access to secure data warehouses.

Moving Forward With a Data Strategy

Financial services firms are no stranger to data. They have been collecting and analyzing big backlogs of information for decades. But today’s data requirements dwarf those from previous decades. For those looking to adopt a big data strategy or refine their current tactics, a methodical approach makes the most sense.

Here are some steps they should take:

• Interview internal and external stakeholders.
• Evaluate the current state of systems, processes, and skills.
• Identify a problem space to focus on.
• Create a roadmap for transformation.
• Develop a platform for data collection, organization, and analysis.
• Utilize a cloud data management platform that aligns with your strategy to accelerate this step.

Financial services firms recognize the value data can provide. They are developing new and creative ways to pull insights from data to do a better job connecting with customers and driving efficiencies through their own operations. Taking advantage of tools like the Actian Data Platform can provide the strategic advantage they need in today’s competitive environment.

About Vamshi Ramarapu

Vamshi Ramarapu is VP of Actian Data Platform Engineering, leading cloud data management development. He has 20+ years of experience, previously at Mastercard and Visa, focusing on scalability, user experience, and cloud-native development. Vamshi is passionate about FinTech and data engineering, often contributing to research on secure, scalable platforms. His Actian blog contributions explore next-gen cloud data solutions, security, and innovation. Read his articles or insights on building resilient data infrastructures.