The digital customer piss-off machine

Some years ago, the head of operations at a major credit card issuer sent me on a mission to reduce the cost of Internet services across the bank.  Turned out that there wasn’t much juice in that squeeze.  But along the way, I was surprised to discover that the Bank’s primary website was killing off good customers at an astonishing rate.  Over 10,000 customers per month were trying and failing to register for our website, because of a couple of annoying features that were, frankly pissing them off.  40% of the 10,000 were cutting up their cards in half and closing their accounts with us in the following 4 months.

What was truly scary was that nobody had noticed this steady wave of attrition or connected the dots to the broken-channel experience that these customers were suffering.  I found it almost by chance.  Someone showed me the attrition data as a “control” data set to prove that customers who signed up for and used our web-based self-service system were just as profitable as a similar group who tried and failed. The control group had roughly the same characteristics as the ones who registered for and then used the system, but I was told they were “too stupid” to figure out how to register online, so they continued to rely on paper statements etc.

I just had to ask – why are 10,000 customers each month failing to register for our website?  I was told that those customers don’t matter, because they were “touched with a stupid stick”, per one VP in Card operations.

And then I asked what do those customers do next, and that’s when we discovered that over 4,000 of them closed their accounts within 4 months of failing register for our online services.

Once we saw the problem, the root causes weren’t hard to detect – one was a poorly designed registration process with unclear instructions and a nasty habit of rejecting your choice of username and clearing the whole application, so you could start all over again.  The other was a breakdown between mail solicitation and online underwriting – we expected preapproved applicants to go to a special website and when they mistakenly went to the main branded website, they were treated as “walk in” applications, were not pre-approved and were therefore 90% rejected.

These two problems cost about $75,000 to fix.

The value of the lost customer business due to attrition was worth about $60 million in net present value (based on the life time value of annual customer profit) PER YEAR!

This was the best ROI I’ve ever witnessed and it was a slam dunk to convince the head of Brand to fund these quick projects.   He was spending a fortune on company branding advertisements, while the website was quietly contradicting him, all day long.

In the digital world, we often talk about customers expecting an “all channel experience”, fully-integrated across web, mobile, mail and live channels.  This was more like a “broken-channel experience” ™ – and because it was digital, it was a silent killer.  Nobody was yelling in a branch, or writing a nasty letter to the CEO, they just got frustrated and went to another bank who “got it”.  It was like a silent basement plumbing leak that was slowly undermining the foundation of the house.

And of course, the customers who cared about managing their accounts online were people who intended to pay and wanted to pay online, so they were mostly good customers or prospects, with good credit behavior, who would probably never be back.

SO what can we learn from the digital customer piss-off machine?  At least a few things, I think:

• It’s never a good idea for an organization to harbor the view that its customers are “stupid” or otherwise don’t deserve excellent service. When you pick up this kind of attitude, it’s probably smoke worth tracing back to the source inferno…

• Customers have high and rising expectations for an integrated digital all-channel experience, driven by born-digital providers like Uber and Amazon and by the enormous convenience advantages of transacting when and wherever you like. Incumbent companies built on legacy technologies and business processes have their work cut out for them to make the turn and compete head on with digital disrupters, and ignore them at their own risk.

• Digital enterprises run on well-designed analytics that make sense of massive quantities of data to drive action. If your metrics don’t track attrition and associate it with service issues, across channels, you’re probably leaking customers, just like the bank…

Of course, walking in your customers’ shoes can always shed light on service, product and process design issues – use the product and know what it’s like to be a customer.  But beyond improving design, monitoring all channels and sharpening your metrics, consider that testing for digital channels needs to be far more rigorous and expansive, to catch the unexpected and potentially valuable things that real people try to do with the tools we give them.

If you can’t provide an excellent all-channel experience for your customers right now, maybe you should consider staying with the analog channels until you’re ready, to avoid accidentally creating another digital customer piss-off machine, with a broken-channel experience.  A half-baked website or mobile app can be worse than having none at all…