Monday, May 30, 2005

The Great Customer Disconnect

Look at the financial services industry for an illustration of how far companies and customers can be from one another.

In a study conducted by First Manhattan Consulting Group, 54 percent of financial-services respondents reported that "a lack of understanding of customer needs" was keeping them from finding a profitable Internet strategy.

At a Bank Administration Institute conference on retail delivery, bankers were asked to answer a series of questions posed earlier to consumers. Interestingly, with few exceptions, the bankers were out of synch with customers in a number of areas. For instance, when asked what service most financial consumers would pay for, 48 percent of bankers said advice and planning. In reality, only 20 percent of consumers said they'd pay for those services. When asked whether consumers would agree with the phrase "My life is different because of the Internet," 80 percent of bankers said yes, while only 33 percent of consumers did in fact agree.

Financial-services firms have to work hard to get into the minds of their customers. Most firms, when asked to list customer needs, mention “CDs” or 'investments' rather than 'long-term savings' or “aggressive portfolio growth.”

One of the direct benefits of detailed profiles is the ability to home in on customer needs and find ways to meet those needs. Firms moving into this realm recognize this as a critical component of their personalization strategies.

Unfortunately, shifting from thinking about products to thinking about customers can be a challenge. Most firms are organized around products, and even those that have shifted still focus more on product sales than customer needs

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