Cook Up Customer Advocacy the Way You Would a Lasagna, in Layers

The objective of any supplier is to create a value-based longitudinal relationship with customers, such that the customer will give a high share of wallet to that supplier—optimistically to the exclusion of others. Like lasagna with layers of cheese, pasta and other goodies, the relationship is constructed on alternating layers of messaging and experience. With care given to melding these layers to produce a positive, lasting impression, a pièce de résistance can be created that ensures customer loyalty. If it's just hash, the customer may go to another restaurant.

Consider financial marketing. How does a bank develop and sustain customer advocacy? In all of the messaging to customers, suppliers need to set and then reinforce the promise of what will be experienced in touch-points and in all experiences over the long-term. Then, they need to deliver at a rate and level that meets, or exceeds, what they have promised.

Over-promise and over-deliver
Business consultant Rick Barrera, author of Overpromise and Overdeliver, hypothesizes that banks such as Washington Mutual and Commerce create brands that uniquely demonstrate high customer loyalty and advocacy behavior. They achieve this success, where larger and better-funded competitors fail, by breaking through functional brand-promise clutter with value-add benefits and solutions that appeal to customers on an emotional level. Then they over-deliver on the ambitious "over-promises" made in messaging. It's a winning strategy, but it takes focus and discipline, plus a deep understanding of what resonates with customers.

All of Commerce Bank's communications to customers and prospects reinforce its bold brand promise of being "America's Most Convenient Bank." The Cherry Hill, New Jersey, regional power proves out the messaging over-promise in service over-delivery through well-trained branch staffs, seven-day extended-hour service and local-community retailing orientation. Commerce's higher-order promises are not made by other banks.

Customers have grown increasingly skeptical of supplier messaging. It is becoming well understood that when customers are making final purchase decisions, their principal criteria are intangible, emotional relationship benefits. The meld between messaging and experience must be as seamless as possible.

Too many banks seem over-focused on tangible features and under-focused on relationships and real customer value. A good example is the fuzzy value created by bank marketers and their affiliates in the mad scramble to lure consumers to their credit cards.

There's a great deal of money to be made through the extension of credit to qualified card users, so it's no surprise that there's so much competition to get qualified users. It has been estimated that the average American household receives at least three credit card offers a week. That's more than 150 a year! One online credit card search engine carries close to 350 different credit card offers.

Much of the sales messaging appears similar and muddled. That's a big part of what makes the value proposition for these cards so indistinct for the customer. There's usually a low introductory annual percentage rate for new purchases or balance transfers from other credit cards. Then services like high credit lines; 24/7 "relationship managers" available by phone, email or online chat; email account reminders; travel insurance (life, automotive and even luggage); and concierge service are layered on. That's not the lasagna I'm talking about.

In this blinding array, which so-called "benefits" do customers consider valuable? And by what process—divine or otherwise—have the card issuers arrived at the combination of benefits? Juniper is not at all bashful to say it uses its own staff—"Product Innovators"—to help design benefits. Juniper's advertising says: "We're all customers, too. So we designed products we'd want to use ourselves." Where is the "real" customer input?

On the other hand, MBNA (now part of Bank of America) has maintained one of the highest rates of cardholder retention, despite higher APRs, with a focus on proactive benefits, such as quick and easy credit limit increases, built-in over-limit protection and relationships built through the company's call center. NextCard Visa has built a following by offering online capabilities—balance transfers, account management and special features like one-click shopping—and instant cost comparisons. It is possible to both promise and reward.

Royal Bank of Canada
Royal Bank of Canada is one company that evaluated its line-of-sight competencies and identified the most effective strategic approaches to providing customers with compelling value delivery. It has clearly profited from this focus.

When research revealed that customers did not understand the bank's value proposition, RBC set out to identify what prevented people from having a more engaged relationship. It learned that clients didn't feel the bank was proactive on their behalf and showed little personal interest in them, often providing high-tech bank branch gadgetry but failing to develop any kind of emotional bond. A classic case of benign customer neglect.

Through a customer management assessment, RBC determined that stronger customer bonds create real, sustainable value. This led to a "remodeling" of its involvement with customers at all touch-points. The bank refocused its employees around the creation of greater customer intimacy, need understanding and personalization. Client-centricity became a stated vision, shaping processes and initiatives around the entire enterprise.

The results have been successful from every perspective. The bank has micro-segmented its customer base around dollar level, degree of engagement and receptivity to receiving information about specific bank programs, as well as demographics and lifestyle characteristics. There are now close to 20,000 customer micro-segments, allowing RBC to target messages tightly and offer more personalized, consistently positive experiences.

Profits have increased substantially, increasing an average of 25 percent per year for several years, in part because marketing programs are more efficient. For instance, marketing cycle time has reduced by 60 percent, and most of the bank's direct marketing programs average a 49 percent or better response.

RBC understands individual customers' needs and wants and, with this deeper level of insight, can create, launch and deliver new products and services with much greater speed and effectiveness. Customers are significantly more responsive to the bank's promotional efforts and other communication programs.

That's a great customer advocacy lasagna.