Creating life-long Customer Ties: the process of customer experience management (CEM) is similar to onboarding, only it starts with the prospecting phase and extends forward to include the customer's entire lifecycle.

• Author: Wojtowicz, Bob

OVER THE PAST FEW YEARS, the struggling economy, stringent regulations, low interest rates and changing customer expectations have combined to create a perfect storm for retail banking. Banks of all sizes are quickly redefining who they should be targeting and rethinking how they should be communicating with them. Banks are trying to identify profitable customers and to grow them faster--transforming new customers to best customers as efficiently and cost effectively as they can. They are also striving to engage these customers throughout their individual lifecycles.

It has become clear that today customers, not marketers, are in control. Conversations are taking place across a wide variety of touch points, and customers are the ones driving the interaction. Understanding what customers are saying, and using that insight to inform interactions in the right channel at the most opportune time is the basis of customer centricity--and this is where banks and other financial institutions must be headed if they are to succeed.

Achieving customer centricity

The journey to customer centricity has been evolving since the 1990s and through the mid-2000s. At that time, the financial companies (card companies, lenders and banks) became experts in predictive modeling and the use of direct mail and telemarketing to drive product sales. During this era, financial companies were leading the direct marketing industry.

By the mid-2000s to 2010, product marketing had given birth to targeted marketing--characterized by customer segmentation, lifecycle marketing and the use of multiple channels to reach consumers. Banks began to segment customer audiences and create communication strategies specific to a customer segment. While this was an improvement over product selling, the multichannel tactics were still "pushed" outward to the customer and the customer was expected to buy the product or service. There was little interaction or back and forth dialogue between the customer and the bank.

With the emergence of digital media and social networks, today's focus is on customer experience management (GEM). GEM is a transition towards managing customer interactions and delivering right-time, personalized solutions back to customers. This new direction has been led largely by industries outside of financial services. Retailers and consumer product companies have fewer internal barriers to deal with when it comes to creating integrated client experiences. Banks have...