A Financial Services Case Study
Leveraging significant industry experience, a balance of qualitative and quantitative research, and change management and adoption expertise, North Highland — along with experts from its experience design division, Sparks Grove — helped a multinational financial services firm activate a winning behavioral segmentation model. The efforts translated a framework into actionable results to increase revenue, customer loyalty, share of wallet, and referrals. The team also developed a governance structure to help the firm better incorporate the customer voice into its overall strategy and operations.
A multinational banking and financial services holding company headquartered in the U.S. had developed a proprietary framework for behavioral segmentation that consisted of five personas, or segments, related to how its customers wanted to engage with their advisors and their money.
The firm, however, had found itself unable to act upon these segments and wanted to develop a strategy to activate this framework, putting the personas to work. Emotionally connected customers are three times more likely to invest with the same firm the next time,¹ and connecting with just 10 percent of its customers would add more than $3M to the bottom line. To realize this potential, the firm needed to do things differently and engage customers in new ways, so they turned to North Highland to develop a strategy and tools they could use throughout the organization.
Later, when the firm wanted to infuse a more customer-centric approach throughout the organization to improve customer satisfaction levels, leaders turned again to North Highland and Sparks Grove for help.
Effective behavioral segmentation is about applying the human lens to a business. It requires an understanding of how to get to the heart of what motivates and engages customers, and, particularly in the financial services industry, it requires that an organization evolve from a productand solution-centric focus to a truly customer-centric one. Activating a behavioral segmentation model delivers results by using all channels to connect with customers and deepen the relationship with their advisors.
To identify the most effective solutions, the team tested language, materials, and engagement tools in customer meetings with more than 4,000 of the firm’s 14,000 advisors and analyzed the results to determine customer preferences and the value proposition that most appealed to each segment. The team then developed materials, trainings, and tools, including a library of data about each persona, to help the advisors better understand how to apply the segmentation to their business lines and talk about their products and services differently, depending on the segment.
For example, the financial advisor might decide to present an executive summary of a lending recommendation versus options for two or three lending products, depending on the customer’s engagement preference. Customers in each of the personas had a distinct preference for the level of information they wanted to receive from their advisors. The segmentation was integrated into the firm’s customer relationship management system to allow the organization to track activities.
North Highland then partnered with field and corporate leaders to drive adoption of the behavioral segmentation model across the organization. They launched a train-the-trainer program and led a change management plan that created ambassadors charged with spreading awareness of and an appreciation for the model.
On the heels of this work, the organization’s strategy team turned to North Highland to review its overall customer experience practices and governance structure and make recommendations for improvement. The team interviewed internal stakeholders to help define a vision for how the customer voice could be integrated throughout the organization, and provided real-time support for ongoing projects, helping project leads better consider the customer experience in their daily work.
North Highland also worked closely with the firm to gather insights about the voice of the customer and define a strategy to allow the firm to incorporate more sophisticated customer experience tools into their everyday processes, including dashboards to track feedback and the inclusion of a common measure to assess performance, such as the Net Promoter Score®, Forrester’s Customer Experience Index™ scores or the Customer Focused Insight™ Quotient. To establish a governance structure, the teams recommended that the firm create a network of customer experience advocates, a customer experience board of directors, and a set of management tools and routines. Together, they successfully communicated the importance of the voice of the customer to the business, secured executive approval, and created a roadmap of initiatives to drive business results in the short- and long-terms.
By enabling the financial services provider to take its existing behavioral segmentation framework and apply it to pressing business issues, North Highland helped the organization develop a customer segmentation model that drove real results. Among the advisors who took part in a one-hour training session to generate awareness of the model, the organization realized a more-than-4-percent increase in assets under management. Advisors who took part in the training session and also used the new materials increased the assets under management by more than 25 percent. Anecdotal customer feedback to the advisors was exceedingly positive as well.
The financial services provider also had a goal of securing $200 million in additional assets for its managed account group. This group realized an additional $2 billion in assets over the course of a year — a tenfold increase over the desired results — after the customer segmentation model was incorporated into its training. The team also fostered cultural change across the organization, with recommendations that helped the organization rally around the importance of integrating the customer experience into all aspects of the business. The new customer experience governance practices and procedures helped the firm drive accountability and ensured that the customer experience would be continually monitored and improved.