When it comes to your customers, you know more than you realize.Thanks to modern data archive and customer resource managementsystems, there is now little shortage of client information — bothindividually and in aggregate. The challenge is no longer what acompany knows about its customers, the challenge has become how toaccess that information, incorporate it in real time, and respondto it with each transaction.

Across industries, business customers expect personalizedattention. For example, savvy restaurateurs understand theimportance of knowing their regular diners' names, food allergiesor favorite bottle of wine. Fundraisers know which hot-button issueis likely to generate a contribution and customize their appeals tomaximize response.

Credit unions have likewise taken a more personal approach totheir customers' banking. Tellers are encouraged to recognizeclients and greet them by name. Credit offers are customized tomeet the specific situation of each borrower. Increasingly,specific information about each customer is used to better respondto each transaction. In fact, credit unions frequently citesuperior customer management as a key differentiator whenattracting new clients and retaining current ones.

Front-office employees often have qualitative information thatcan enhance strategic decisions and should be included in back-enddata systems. Conversely, detailed client data needs to beinstantly available when making a customer-facing product decision.Unfortunately, there remains a disconnect between the front-officepersonnel handling transactions and the back-office informationrepositories where client data is stored. Credit unions must bridgethis gap if they are to develop an effective customer-centricstrategy.

Designing and implementing a customer-centric strategy increasesclient loyalty while at the same time ensuring uniformity todeposit product offers, lending decisions or discretionary feewaivers. When effectively deployed, these strategies not only helpunderstand why a customer may be asking for anexception—to match a competitor's offer for example—but alsodocuments these decisions into future back-office decisionprocesses.

Building a Customer-Centric Strategy

A customer-centric strategy is not simply providing goodcustomer service; it requires planning to manage the many sourcesof client data and increasing number of transaction points. Thismeans taking a holistic look at customer strategies and ensuringthat each transaction process serves the common goal. While eachtransaction — regardless of where it originates — should bepersonalized for the individual expectations of the customer, itshould also serve the business goals of increasing revenue,reducing customer attrition and improving the customer'sexperience.

A four-part approach:

• Plan the strategy;
• Set an adoption timetable (including a pilot);
• Measure customer feedback and acceptance;
• Quantify the results.

This first step toward a holisticcustomer-centric approach is to have a strategy. Quantify allexisting information available about each client, whether frominternal systems of record or external data sources, and ensurethat this information is readily available whenever required. Thisinformation should include critical qualitative input fromcustomer-facing staff.

Let's look at an example of this:

While traveling on vacation, Joe Eyesaver buys three pairs ofsunglasses (one for himself, his wife and his daughter). Unfortunately, Joe's credit card issuer declines the transactionciting triggers of fraudulent behavior. (People usually only buysunglasses one pair at a time.) Generally this might be a goodfraud prevention strategy to prevent unnecessary losses, but thispurchase is anything but fraudulent. In fact, when Joe calls thecredit union he is quick to point out to the call center rep thathe used the same credit card to purchase his airplane tickets tothe location city where he was making the purchase.

Unfortunately, in most cases this qualitative customer feedbackwill never be integrated into proactive customer strategies.However, the credit union that does so will have achieved ameasurable impact on customer experience and lifetime value.

A more general example of this applies to depositaccounts. A credit union may consider lowering home equitylines of credit because of home price depreciation on customerswith hundreds of thousands of dollars in deposits. This is adecision strategy that does no favors for the customer or thecredit union, where customer retention should be a priority.

Strategies should allow for insights from customer-facingemployees, who should be empowered to provide insights bestdiscovered through customer interactions. Actively engagingcustomer-facing staff to align strategy designs with practicalreal-world experience will improve adoption and better satisfycustomers, and meet objectives. This collaborative approach ensurescomplete adoption from customer-facing bankers and measurablecustomer experience improvements that are quantified by improvedcustomer retention and new customer acquisitions.

Starting with a pilot project, launch the roll-out. This shouldinclude mechanisms to adjust the strategy and update data as theproject advances. Next, measure customer response, both in terms-ofreactions to changes in customer service levels, as well as anychanges to responses to product offers. Finally, keep a scorecard;measure the results as they apply to the organization's long-termgoals.

Establishing objective measures of success is critical to makingsure that the piloted strategy meets financial hurdles withoutcreating attrition with existing customers. Regardless of what isbeing implemented — such as deposit products fee managementpolicies, time deposit rate exceptions policies, customer servicingstrategies, or risk assessment models and treatment strategies —it's critical that shareholders and customers are served by thesestrategies. Establishing clear metrics for success and accuratelymonitoring these metrics ensures consistent outcomes.

Customer-Centric = Long-TermCompetitiveness

Credit unions that successfully implement holisticcustomer-centric strategies immediately improve operatingefficiency. The resulting customer treatment strategies are easy tounderstand and apply consistently across the enterprise, resultingin improved customer service scores as customers come to appreciatethe value of their relationship.

Investing in customer-centric strategies can help ensure acredit union's long-term competitiveness by differentiating theorganization from its competitors and by training employees toproactively pay attention to what is most important to the bestcustomers. Returns on investing in superior customer-centricstrategies can exceed 20 percent the first year of implementation.These results can be compounded in subsequent years due to repeatbusiness, new customer referrals and customer loyalty.

John Taylor isa senior business consultant with Experian's Global ConsultingPractice in Costa Mesa, Calif.