How much influence do your employees have on customer value perceptions and loyalty behavior through their day-to-day interactions? At Royal Bank of Canada, agents can manage and reverse service charges. And through a program called "I Make It Right," an agent who thinks that a customer was mistreated can send a gift card or fruit basket to the client.
Employees are the common denominator in optimizing the customer experience. Making the experience for customers positive and attractive at each point where the company interacts with them requires an in-depth understanding of both customer needs and how what the company currently does achieves that goal, particularly through the employees. That means that companies must understand, and leverage, the impact employees have on customer behavior.
While employee satisfaction and engagement research findings show relatively little correlation to actual customer behavior, we have developed a new approach—ambassadorship—that focuses on the impact of employee commitment to the brand and value promise; to the customer; and to the organization. Top-level commitment, or ambassadorship, can have a dramatic positive effect on the organization's relationship with its customers. Ambassadorship is linked to, but distinctive from, the productivity and empowerment elements of employee satisfaction, loyalty, engagement and alignment research because its emphasis—indeed, its principal intent and objective—is in building stronger customer bonds through employee interaction. The graphic shows how employee ambassadorship and commitment, where they exist, result in stronger performance on every key measure of customer relationship and behavior.
The employee ambassadorship solution identifies new categories and drivers of employee commitment, while linking with the emotional and rational aspects of customer commitment. These customer-focused commitment categories include, at the top and bottom poles:
- Employee ambassadors: the employees who are most committed to a brand. Ambassadors represent employees who are strongly committed to the company's brand promise, the organization, itself, and its customers. They also behave and communicate in a consistently positive manner toward the company, both inside and outside.
- Employee saboteurs: the employees who are the least committed to a brand. Saboteurs are active and frequently vocal detractors about the organization, itself; its culture and policies; and its products and services. These individuals are negative advocates, communicating their low opinions and unfavorable perspectives to peers inside the company and to customers, and others, outside the company.
The principal objectives of this research framework are to learn where the saboteurs lurk and the ambassadors flourish—and how to encourage employees in the middle of the commitment spectrum to become ambassadors.
Within banking, as in many other financial services markets, studies of customers often reveal strong commoditization, one-dimensional non-differentiation where one bank seems much the same as another. Although there is a certain amount of inertia in this marketplace—difficulty in moving accounts and relationships between financial institutions—there is also very little true commitment, or customer advocacy, behavior.
Royal Bank of Canada is one of very few institutions that are bucking that trend. RBC studies have shown that the level of employee commitment accounts for 60 percent to 80 percent of bank customer satisfaction; and 40 percent of the difference in how customers view RBC's services can be linked directly to their relationship with bank staff.
One key area of focus for RBC's Client First initiative has been the contact center. RBC has identified contact-based loyalty drivers and detractors for each line of business. For example, one detractor is long hold times in the contact center, and one driver is a bank employee offering someone financial advice. RBC calls such detractors value "irritants," and executives decided to eradicate those annoyances. Now, tracking and removing them is a declared strategy for every line of business.
Successful execution of the Client First strategy has turned the RBC culture into a service organization. The contact center, consisting of 5,000 employees across five large centers and multiple smaller ones, has significantly elevated its service levels because of agent empowerment, an initiative to actually listen to customers and parlay agent-monitoring techniques. That's where the "I Make It Right" program comes in. RBC is supporting its agents by exposing all senior executives to the bank customer contact center experience and having them periodically listen to calls.
One of the contact center's main goals in supporting its agents is to try to make it easy for customers to conduct business with RBC. Uniquely, the bank calls itself a "relationship organization," emphasizing long-term, positive and strategically differentiated customer value. RBC achieves this by having agents listen closely to customers to understand their needs and then connect to them in an emotional way that brings their experience to life.
Client First, in the contact center and throughout RBC, is considered a continuing journey. In the first 18 months since the program began, the company saw service levels improve by 50 percent, along with consistent improvements on all key loyalty drivers, such as overall customer satisfaction, first-call resolution, the quality of financial advice, ease of conducting business and the likelihood of recommending products or services to others. The Client First strategy has definitely changed the way customers perceive RBC, significantly improving both loyalty and bottom-line profitability.
In a recent study by the Chartered Institute of Marketing in the United Kingdom, of 1,000 adults, only 8 percent believed that regular contact with suppliers is more beneficial to them than suppliers, while 50 percent thought that such an ongoing relationship benefited the suppliers. Worse, only 9 percent of the respondents said they wanted that contact to be driven by the supplier. These are alarming numbers, and they strongly suggest that consumers are rejecting common customer relationship practices.
To succeed at customer relationship and experience management, the cold reality is that frequency programs are not enough. Great product is not enough. Exceptional service and customer-sensitive staff, though incredibly important, are not enough. Use of new communication technologies and multiple channels is not enough. Tight, efficient operational processes are not enough. What really leads to loyalty and advocacy is the company-wide commitment to customers—strategic customer-centricity if you like—along with the ongoing creation of customer-perceived value and "barriers to exit."
Success will be defined by three outcomes: the highest share of customer possible, optimal lifetime customer value generation and the lowest voluntary churn. This requires both discipline and commitment. It's not easy, and nobody promises it will be. But it is elegantly simple.