Want to Increase Sales and Lower Costs? Start With Your Customer Journey

February 13, 2017

In the financial services consulting industry, we are often asked to justify the “ROI” of our work. Different types of engagements have different ways of measuring value. Over the past several years, one specific type of project has consistently returned a high “ROI” for our clients – examining and improving the end-to-end customer journey.

What is a Customer Journey?

A customer journey is simply the steps a customer goes through to interact with your firm to accomplish a specific task. Examples of customer journeys could include: applying for and obtaining a mortgage loan, requesting a replacement credit card, or seeking settlement on a charged-off debt.

The strength of a customer journey has a substantial impact on financial performance through various key metrics.

  • Applying for and Obtaining a Mortgage Loan
    • Metric: Drop-out rates, which directly impact loans booked and credit quality (those who drop-out are likely the best customers with other lender options)
  • Requesting a Replacement Credit Card
    • Metric: Sales volume, which directly impacts interchange revenue and credit quality (those who start using another card are likely better credit risks with other cards in their wallet)
  • Seeking Settlement on a Charged-Off Debt
    • Metric: settlement completion %, which directly impacts recovery dollars

While improving the customer journey may not seem like it can move the needle, when applied at scale, fairly simple process changes can drive millions of dollars in bottom-line revenue and cost savings. Additionally, less “measurable” benefits, such as loyalty and brand building, can also be gained by having a strong customer journey.

How to Improve a Customer Journey

There are two steps to improving the customer journey: identifying what needs to change and executing that change. The first, and the easier of the two tasks, can be done by documenting the end-to-end process, observing the process within the operations, and reviewing data/reporting to identify where non-value added or negative experiences are occurring. You can see from this where efficiency opportunities exist, where customer communication can be improved and where any non-value added activity occurs.

Once the opportunities are identified, then it is time to execute. We prefer executing the redesigned process in a pilot environment to allow for refinement and measurement against the “Business as Usual” process. However, conducting the pilot is not a simple task – it requires creating new procedures, training new agents, and rolling out a new process alongside the existing process. When done right, it can be rewarding. Considering the workload that is required for effective execution, our clients often hire us to design, implement and manage the day to day efforts of the pilot process – which can be done at a low cost relative to the typical benefits obtained.

A Case Study: Mortgage Lending in the UK

To fully grasp the benefit of examining the end-to-end customer journey, it is helpful to examine the story of a client we recently worked with in the UK. The client was a mortgage lender who felt they had opportunities to improve the application journey. After spending several weeks conducting the end-to-end process assessment, we identified that the journey was too long, the number of missed advisor appointments was too high, the number of customers calling in to check on application status was driving too much call volume, and that too many customers were being declined while working with an advisor.

Additionally, existing operations staff had grown frustrated with the inefficiencies of the incumbent process, impacting employee morale. After conducting further analysis and proposing redesign options, a series of changes were implemented in pilot, these included:

  • Improving upfront questioning of applicants to enhance the quality of leads being passed to advisors (which were more expensive resources)
  • Adjusting how advisor appointments were scheduled (both in terms of meeting length and scheduling strategy) so that they were driven by customer choice rather than internal shift patterns
  • Changing the way advice is given, through a more holistic approach to make the conversation meaningful
  • Enhancing process controls to ensure the customer was ready for the next stage of the process before progressing
  • Improving customer communications
  • Simplifying queues and workflow management

Upon completing an eight-week pilot, and assessing the data, the results were compelling:

  • Journey time had been reduced by half (from approximately 55 days to 23 days) – resulting in a lower drop-out rate and increased number of loans booked
  • Missed advisor appointments fell from over 13% to approximately 1%. This improvement alone resulted in being able to book the same annual loan volume with 11,000 less appointments – an estimated cost savings of £1M per year
  • Volume of inbound application status calls fell from 50% to under 5% – reducing operational cost
  • Decline rate at the advisor stage in the pilot fell from over 11% to 3.5% – reducing operational cost
  • Operations staff provided positive feedback indicating the new process was much more logical, and improved overall job satisfaction
  • Conduct Risk decreased due to the new approach of giving Advice – Zero ‘Wrong Customer Outcomes’
  • Operational Risk decreased due to the controls in place to prevent customers moving through the journey when not ready for the next stage

Overall, the customer journey changes allowed the client to reduce operational expense by over £1M per year, while increasing revenue by £8,000,000 per year – quite an “ROI” for bringing on a few consultants for 12 months.

“In December 2016, I applied for a new mortgage…the changes to the journey are incredible! The revised process is simple, defined and efficient; resulting in a significant reduction in the time I spent on the phone from 4 hours to less than 2 hours. #amazing”—Bridgeforce Client

Conclusion: Don’t Underestimate the Power of the Customer Journey

While it is easy to look at elements of a process in isolation, it is essential not to overlook the holistic customer journey from the perspective of all stakeholders involved – most notably, the customer, but also the operations staff. It is a far too common mistake for organizations to make tweaks to the process without thoroughly conducting an end to end impact assessment, which then creates more inefficiency and frustration by impacting upstream/downstream processes. But, by taking a step back, examining the customer journey and regularly testing and implementing enhancements (with the utilization of impact assessments and embedded controls/monitoring), you can create a virtuous circle where your customers and staff are happy, which ultimately increases your bottom line.

If you have a customer journey that you feel could be improved, let’s chat. We would be happy to spend some time helping you “make the business case” to determine if investment in a revised customer journey would be profitable.