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Strategic Planning: The Importance of Focusing on the Customer Experience

Dec 18, 2018

As I travel about the country and engage with financial institution leadership, I hear similar statements regardless of geographic footprint, asset size, or identity. 


“Profitable growth is priority number one; the key question is, How do we attract the customer of the future?”


“Customers’ expectations of us are changing; how do we keep up?”


“Technology and our customers’ adoption of it is changing so quickly; we need to know how it will affect us in the future.”


All three comments above underscore the need to flip our thinking from how we respond to our customers to how well we anticipate their needs and desires. If pressed, we in the financial services industry would say that we are all about customer service; however, I would challenge us to look at what makes or breaks a customer relationship. It’s really the customer experience and how they feel after doing business with us!


Where were we, where are we now, and where are we going?


How does strategic planning play a role in solving the three dilemmas expressed to me by leadership? Let’s take a look at what we traditionally think of when we contemplate strategic planning. A common definition of strategic planning taken from Wikipedia is “an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy. Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management.”


Has the industry progressed beyond the definition that came to prominence in the 1960s? When you think of strategic planning in the traditional sense, what comes to mind? Do you think of spending a day or two in a conference room, conducting a budgeting exercise, setting key performance indicators, performing a SWOT analysis, all resulting in a nice little binder collecting dust on the shelf waiting for us to pick it up next year?


Focusing on the customer experience changes all that. We’ll turn back to our friend Wikipedia for a definition of the “hot” buzz phrase of customer experience. In commerce, customer experience is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction is made up of three parts: the customer journey, the brand touchpoints the customer interacts with, and the environments the customer experiences during their experience. A good customer experience means that the individual's experience during all points of contact matches the individual's expectations.”


How do the two fit together? Why should the traditional process change, and what is driving the change?


The pace of change in the financial services industry is accelerating and being driven by the advancing needs of customers, their behaviors and expectations, as well as competition from both traditional and non-traditional service and FinTech providers. Can we expect our traditional strategic planning process (that looks out 3 to 5 years) to be relevant within this change environment? Or must we also think about our plans and processes becoming more nimble?  Improving the customer journey and providing a positive customer experience was ranked as the number one trend, as well as top strategic priority, in the survey of global banking leaders for the 2017 Retail Banking Trends and Predictions report issued by The Financial Brand. FIS has also concluded in its 2018 Performance Against Customer Expectations (PACE Study) that there needs to be a shift in strategic thinking among banking providers—especially smaller ones.


What can you do? Where do you start? It all begins and ends with the customer.


How do you align strategic priorities, specific strategies, and action plans with the customer experience? There are several items to consider when doing so:


  1. Who are you and who do you want to attract? This goes back to your vision and mission statement, business plan, and customer segment targets. To whom do you want to be the provider of choice, and what exactly does that segment want you to provide to them?


  2. Do your research. You think you know your customers, but do you really? Can you properly analyze what your customers are doing with you, much less what their behaviors are outside of your relationship with them? What market data are you subscribing to, what trends are you following, what industry groups are you involved in? I’m not speaking about what the industry thinks, but what consumers are “telling” you. One example of a low cost yet effective practice that a small community financial institution can adopt is the formation of its own internal focus group of Millennial employees that mirror the customer base it is trying to attract. The group can provide insight into everything from lobby look and feel to mobile banking features.


  3. Consider non-industry-specific case studies. What customer expectation or behavior lessons have we learned from companies like Amazon, Uber, Google, and Apple? Consumers want every aspect of their life to be made easier, more convenient and efficient, with simplified transactions, and they want to have some degree of empowerment. They desire the right mix of technology, products, services, education and outreach. Self-service is a high priority along with efficiency and ease of use.


  4. Remove silos! Look at customer experience, not customer service. Every customer touch point should be examined in small pieces from beginning to end. Where is the friction in the process? Create a customer experience team with representatives from all areas of your financial institution who can truly map out an end-to-end journey. Review product, service, culture, talent, processes, and technology. Consider a lean process exercise; remember the “devil is in the details.”
  5. Have a strategic process, not just a plan. Strategy may start in the board room but shouldn’t just stay there. The highest performing financial institutions live and breathe strategy; it’s a daily discussion. They become nimble at adapting to changing customer expectations and are not afraid of it. They become proactive and not reactive. Their ongoing discussions feed their strategic plan.


Strategic planning is fundamental to running a high-performing organization. A strong strategic plan is comprised of solutions that can be effectively implemented and tied to bottom-line results, as opposed to theoretical recommendations that inevitably end up being ineffective and sitting on a bookshelf. Strategic planning can be daunting and overwhelming, leaving even top-tier management with doubt about where to start. It’s all about taking that blank piece of paper or computer screen and plotting the offense and defense, making sure the right people are in the right positions, establishing short-term and long-term goals, and defining how they will be realized. The most important element is remembering WHY your organization exists—it’s your customers!


I started this article mentioning that customer experience is how you make the customer feel about you. I recently purchased a car from a local used car lot—paid a great price, was very happy with the purchase, even negotiated a manufacturer’s service plan that pays for any work—oil changes to tires. Within a month, I hit a pothole and had a severely ripped up tire. I took it back to the dealership and heard, “I’m sorry, but we will have to order it, it will take a week, and the labor costs will be $X. But you can go over to the manufacturer-related dealership across town and try there.” Needless to say, I was none too happy, but managed to call the group that was about an hour away. They had the tire in stock and said to come on in even though they were closing up shop. When I arrived, I was welcomed with a cup of fresh coffee, fresh fruit and a cushy waiting area where they made sure the TV was on the channel I wanted. They changed and rotated the tire, honored the manufacturer’s service agreement, washed the car inside and out, and didn’t charge me a dime. A customer experience well thought out and consistent on every touch point. I left feeling pretty darn good about them.







Marcie Bomberg-Montoya, OCI, OEI
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