How would you react if your company spent half a million and two years on developing a new app but after launching it, the customer satisfaction decreased? There are several non-obvious factors that can completely sabotage all of the huge investments and efforts of creating delightful customer experience in banking or Fintech. So, let's explore customer experience gap model to find out why customers might not like your expensive new product.
A shorter version of this article was originally published on Forbes.com
There's no doubt that great customer experience (UX/CX) is mandatory to retain a competitive edge in the digital world.
Despite that, the efforts to improve banking customer experience do not always lead to success due to certain critical blindspots. It happens that failure is pre-installed into the project, regardless of the budget size and the efforts of the team.
In fact, if implemented inaccurately, it can lead to losses caused by the so-called “customer experience gap”.
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Banking customer experience Gap Model as a part of UXDA's Financial UX Design methodology
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This was the case for a certain bank that invested nearly half a million dollars to improve its mobile banking app but it resulted in a decrease of the overall customer satisfaction. The root cause of it was several internal experience gaps at different levels of the financial company that the team failed to spot and prevent. How to identify and avoid these blindspots in time to protect the success of expensive, large-scale digitization projects?
Banking CX Efforts Can Fail Even With Huge Budgets
In the last decade, a huge amount of research has been carried out confirming the priority influence of customer experience on a company's market efficiency. If bad CX leads to multiple business problems, then positive CX increases referrals, retention rates and revenue, because 86% of customers are ready to pay more for a better customer experience, according to Oracle report.
It would seem that everything is simple - to see a significant increase in profits it's enough to provide the best customer experience. But in real practice, this is not that easy. 80% of CEOs believe they deliver a superior experience, while only 8% of customers agree with that, according to Bain & Company research.
The main reason for that can be explained through the “experience gap”. It is the negative difference between customers' expectations and the experience they get from a financial digital service. If the experience is significantly worse than expected, it can have many unpleasant consequences, like decreased customer loyalty, tons of negative reviews, and even customers who decide to leave the brand.
In most cases, the real experience gap is not recognized. The leaders and employees of the company do not understand what and why to improve, even if they feel that something is wrong. If something is not consciously realized, it is not possible to manage it.
Real-Life Example: Customer Experience Gap Model in Action
To explain the way that the “experience gap” might cause trouble, I'd like to share a real-life example. Several years ago a quite known and respectable Central European bank embarked on a voluminous digital transformation journey. The bank's application had a rating of 3.5 and was outdated. In order to digitalize, improve the bank's image and the competitive chances in the growing digital market, the management intended to urgently create and launch a modern looking banking application. Therefore, the initial design and development period was 6 months.
Nevertheless, the bank spent three times as much time building the new application by themselves: 1 year and 8 months. This was a serious project not only in terms of time but also the budget invested. Judging by the scope of the project, the improvements made and the timeline, the overall costs could be estimated at around half a million.
However, the result did not live up to expectations at all. After the new application was released it decreased to 2.4 from the previous 3.5 and has kept dropping even a year after its first release as it did not improve, but significantly worsened the customer experience.
How could this happen if the bank did everything to improve the user experience and the whole team worked hard for almost two years?
In this case, there was an “experience gap”. Despite that dozens of the bank's top professionals have spent 20 months and half a million creating an improved product, it has failed to meet user expectations.
Though the real reason for customer dissatisfaction is the unconscious experience gap, often the financial companies tend to explain it by blaming external circumstances. Such as changes in the market, the activity of competitors, the emergence of innovations, changes in consumer patterns. Of course, there's objective truth in that, but a company capable of effectively adapting uses these factors for its growth, not as a scapegoat.
But the most important way how the effectiveness of adaptation can be measured is by how well the company's service meets or even exceeds the expectations of consumers.
Companies that are unaware of the gap between their service and customer expectations are unable to adapt.
In some cases, the company's actions even lead to broadening the experience gap to critical levels. This often leads to an alarming drop in demand for the company's products and services.
If we go back to the example, it seemed that management was confident about the success of the significant improvements made, and devoted large funds and efforts to advertising. The ads promoting the brand new modern, innovative, and user-friendly mobile app caused overestimated expectations among consumers that significantly exceeded the actual quality of the service. As a result, when the product was finally released, the customers were surprised to find out that their expectations are disappointed and that the new app is even worse than the old one. This led to a massive wave of negative reviews not only on the App Store and Google Play but also on social media. People were tweeting their struggles ironizing about the failed digitalization project of the bank.
Unawareness of the Gap is the Main Threat
Let's explore how the gap was formed between the digital service and user expectations, and why no one was able to prevent it. In fact, the biggest challenge is that these types of gaps are often not noticed in the organization. Their reasons are not obvious and are found at several levels of the organization at once. Moreover, their influence is so imperceptible that it leads to destructive consequences unexpectedly. In the end, no one understands what the reason is until the team faces the product failure in the market.
The main difficulty in bridging the gap is that the higher the hierarchy level, the higher the unawareness of the experience gap. In fact, at the top of the hierarchy, the root cause of the gap is usually found. The lower in the hierarchy, the more employees feel problems and gaps, but they often do not have the authority and ability to eliminate them, they are constrained by culture.
In this particular case, the support department received thousands of calls every day about the struggles caused by the new product but due to fragmented business processes, they weren't able to do anything about it.
Customer frustration grew even stronger. They faced issues that made it difficult to execute even the simplest everyday scenarios but the “support” they got from the bank employees was that they are not the only ones struggling and that currently, the bank is busy working on new features, instead of fixing the current ones.
What makes things complicated is the fact that the internal processes behind the experience gap are caused by the same mechanisms that have facilitated company survival and growth in the past. Since any organization has inertia, these mechanisms are supported by inner beliefs and values and create resistance to attempts to recognize and close the experience gap.
First of all, the gap should be addressed at the management level. Thus, the lower in the hierarchy, the farther from the leadership and the closer to clients, the more the gap is felt and recognized. Naturally, front-line workers will have the most data. They got it from the clients whose expectations are not being met.
The 7 Types of Experience Gaps in Banking CX / UX
According to Forrester's research top challenges to delivering a good CX are internal struggles: the lack of a cohesive strategy across teams (48%) and silos of various CX operations and functions across the organization (38%). The main experience gap may be caused by blindspots in one or several of the seven levels (culture, feedback, execution, design, value, brand promise, emotional connection) in the financial organization.
1. The Culture Gap
The lack of customer-centricity at the level of culture prevents employees from bringing service closer to customer expectations and causes a "culture gap". The processes and activities that contribute to customer-centricity in a company with a "culture gap" will not have priority and resources will not be allocated to them.
2. The Feedback Gap
Lack of data about customer expectations and their experience with a product or service creates a "gap of feedback". Here, financial companies often even collect the data but it's not analyzed and no action is taken to improve the situation.
3. The Design Gap
Even if a customer-centered approach is a priority and a large amount of data about customer expectations is collected, there could still be a gap concerning the design competence and methodology. Having the right expertise in place allows to build a high-quality ecosystem of digital products that will provide the best possible service according to customer needs.
4. The Execution Gap
This gap is associated with poor design execution. If user-centered product design is not a priority, decisions and efforts to create the final product and service are of low quality and efficiency. This determines the company's ability to create competitive services and products in the digital age.
5. The Value Gap
The value gap can form if the design ecosystem is not in compliance with user expectations at the five levels of the Value pyramid: functionality, usability, aesthetics, status, mission.
6. Gap of Overpromise
As my example with the bank demonstrates, if a company aggressively promotes its service, promising something that the product is not able to provide, it will lead to even higher disappointment in user expectations. As a result, the negative assessment of the service could double since the advertising promises don't meet reality.
7. Emotional Gap
If brand communication is purely informational, focused on functional features, then an emotional connection with users can't be formed. Since humans make decisions based on emotions, building service value on an emotional basis has a positive effect on customer expectations and the end user experience.
Bridging the Experience Gap
Each client unconsciously evaluates the service they receive according to their expectations.
The emotions caused by the quality of user experience form the brand's reputation. In the modern world, digital channels have become the main “marketing” and PR of the brand. A negative experience with a mobile application can sabotage all the efforts of brand promotion even if it has a hundred-year history of serving clients and an excellent service on other channels.
It's simply because in the digital age, the mobile channel dominantes and for some, it's becoming the only way to interact with the brand. That's why it's so important to be aware of the ways to bridge these seven experience gaps that might arise when creating digital products.
1. Bridging the Culture Gap
When it comes to culture, the transformation begins with a change in the mindset of the top management, spreading this influence over the entire culture of the company and inner values. In particular, the customer-centered experience mindset could be implemented.
2. Bridging the Feedback Gap
In our particular example with the bank, the first step to start bridging the gap would be to dive deep into the most common of complaints shared on social media and calls to the support department. These are the clients who are closest to the gap. In fact, they have more insight into fixing it, than the management, and are often eager to actively share their emotions and be heard. If a company is open enough and ready for critics, it can use this data to bridge the gap and improve agility.
3. Bridging the Design Gap
To create a strategy for overcoming the execution gap through the integration of the design approach and design thinking Design Pyramid can be used. This framework determines five levels at which design integration will significantly increase the overall efficiency of the company: the process, the team, actions, results, and value.
4. Bridging the Execution Gap
You need a proven design execution approach such as Financial UX design methodology with a step-by-step system for designing digital financial products that live up to customer expectations and are able to bridge the execution gap. This approach includes Design Thinking, BUP (brand, user, product) frame, and a wide range of UX design tools.
5. Bridging the Value Gap
The Value pyramid helps to bridge the value gap. Creation of true value and benefit for the customers begins at the functionality level of the product and expands through delivering an exceptional usability; aesthetics - visual identity that WOWs; status - personalization for a specific audience of the product and, finally, a mission statement that builds a community around it.
6. Bridging the Gap of Overpromise
The customers of the digital age demand transparency, care, honesty and open communication. Due to the network effect, it has become nearly impossible to sell a bad quality product because everyone can post negative feedback on social media. This damages customer trust deeply. So, it's crucial to make promises that can be not only fulfilled but even over delivered on.
7. Bridging the Emotional Gap
Empathy and care toward customers is more important than ever. Building an emotional connection between the brand and its clients is essential to ensure long term loyalty and demand. This connection is built through all of the previously covered stages - the right mindset that puts the customers first; collecting feedback and making improvements based on it; using the right tools and methodology to create product design and the ecosystem; creating true value and benefit, and, finally, by being honest and over delivering on promises.
Find out how UXDA methodology bridge the gap
Pathway Towards Becoming a Beloved Financial Brand
This covers the seven main experience gaps that can sabotage the creation of digital financial products, as well as the seven bridges that can help to avoid and solve them. The financial brands aware of these banking CX blindspots can instantly gain a significant market advantage of their competitors who are still in the blind zone.
Awareness alone makes a huge difference, but awareness combined with action leads to a long term success in becoming a greatly demanded and loved financial brand.
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