The appetite for face-to-face meetings will wane next year with growing financial pressures being cited as the main reason. 

Our latest look at the meetings and events market was taken through the eyes of our Business Opinion Omnibus and found that nearly half of all business leaders (47%) said their company would be using external facilities by the end of 2023. 

Many of these recognise that getting people together is good for business with external venues having potential to make a better impression or offer additional facilities, such as catering. 

However, looking ahead to next year, 27% anticipate fewer offsite events, with a further 15% undecided and the balance expecting roughly the same amount – a net negative outcome that potentially means fewer events overall as businesses brace themselves for a challenging 2024. 

How does this effect spend? 

28% of businesses are expecting to spend more on external meeting facilities next year, but this is partially fuelled by an expectation of increased prices rather than a sign of greater demand. Meanwhile, nearly a quarter (24%) of the businesses who said they were likely to reduce spend next year claim it is due to a perception of bad return on investment. But surely bringing people together, will be valuable, productive and a good use of time and money, with benefits that go beyond the immediate facilities on offer?   

It’s not as easy as that, though, is it? There is nuance to every role, output, and its execution. 

In a recent conversation with Amy Edmondson, Professor of Leadership and Management at Harvard Business School, we were able to gain some insight into the concept of ‘flexibility’ in the workplace – a hangover from the pandemic that saw us all in our home offices, with pyjama bottoms on, kids running in and cats strolling across keyboards. 

“There is flexibility and there are relationships.  You can’t have ultimate flexibility and deep relationships – you’re trading one against the other. 

Flexibility can be defined as working wherever and whenever you want on tasks that are individually accomplished and modular, meaning the interfaces with other people’s work are uncomplicated.  As soon as the interfaces are more interdependent, and tasks more complicated, then flexibility is at odds not just with relationships but with quality of execution. 

Step back, look at the work first, what is the nature of the value that we are providing for our customers and how does that value get produced and if part of the answer is through teamwork, through the integration of people with diverse skill sets and areas of expertise, then we have to give deep and long thought to what kind of flexibility works best as a team.” 

This view neatly underpins the concept that leads much of Microsoft’s ‘Future of Work’ strategy with AI playing a significant role in making asynchronous participation possible and synchronous participation better. 

Conceptually this is all very encouraging, but experience on the day counts for a lot in reinforcing willingness to spend on meeting facilities in future. Event planner feedback from VenueVerdict CX shows a terrific improvement on this front compared with 2022, but it still remains slightly below pre-pandemic levels. This needs to be addressed, as it is likely to be another factor contributing to any reluctance to gather the team.

The balance between output, connection and becoming more cost and ROI-conscious in the face of growing financial pressures is a tough one to strike.  

If business leaders’ predicted use and spend on external facilities hold true, we will see a shift towards fewer meetings and event,s and a need to better reinforce the value of those that do take place. One of the best ways to do that is for venues to deliver EPIC experiences and events that leave people invigorated, feeling productive and connected – wanting more, not less. 

Learn more:

In 2017 two customer service assistants at the world-famous London Underground changed the wording on a station whiteboard that directed passengers to a Craig David concert in a move that would one day bring them to the attention of Michelle Obama.

They replaced the words “Keep Right” with a poem they had written instructing people how to get to the concert. The poem used lyrics from the artist’s songs.

Their simple action had a monumental outcome. The whiteboard poems went viral and the two employees became Sunday Times bestselling authors. They have more than a million followers on Instagram, including the former US first lady.

This story encapsulates everything about our North Star for CX: harnessing the power of emotion to influence human behaviour.

Getting emotional: CX in the digital age

While traditional customer experience has focused on the functional, nuts and bolts side of CX for a smoother customer journey, the digital age requires so much more.

The internet has saturated the market with products and services that are often indistinguishable from the next. To stand out, businesses need to connect to the humans buying their goods and make their experience as memorable as possible.

Numerous studies in behavioural science have also shown that it’s the customer experience, and more specifically, the memory of the experience, that creates attachment to a brand.

Human connection therefore requires CX to be built around human traits like emotions and feelings – attributes not generally associated with corporate conditions! When engineered in the right way, however, as the Transport for London whiteboard example proves, emotion can connect with people in a truly powerful way.

XPASS gets to the heart of human connection

In the world of business, human connection provides the foundations for profitable relationships and maximises return on CX investment.

But achieving it is no easy task.

Drawing on behavioural science can boost your chance of success. Our Emotional Activation Model, XPASS, helps keep emotion at the core of CX every step of the way.

Learn more in our eBook

This free eBook looks at how XPASS can be put to work for better customer experience outcomes in any sector. You will learn how:

A trip to a visitor attraction is a chance to get out and enjoy everything from historic UK landmarks to theme parks – with massive potential for memorable experiences.

We have developed a valuable tool which can help visitor attractions design unforgettable customer experiences and strengthen customer relationships.

Behavioural economics brings a new vision of how humans make decisions in real life.  We are not rational ‘bots’ making optimal decisions, but humans subject to external influences and prone to making mistakes (some of them systematic). The theory of EPIC framework is that people judge an experience based on how they felt at its peak moments (the most intense points) rather than the sum or average of every moment of the experience.

Benefits of using the EPIC framework for visitor attractions:

Our research look at whether UK visitor attractions deliver EPIC experiences and, more specifically, which key moments are driving these experiences. In general they have exceeded expectations by delivering elevated experiences far beyond other sectors. What does that actually mean in practice, though?

ELEVATION

Elevation is the act of going beyond the routine and the expectedsomething that pleasantly surprised you. Such experiences are likely to influence word of mouth awareness, where people share their elevated experience with friends and family, and in turn drive repeat visits.

Examples:

PRIDE

Pride is generated when visitors feel recognised and valued. This can be through a particularly special experience, or simply by receiving the care and patience of staff. Value should be conveyed through the experience and at each ‘transition moment’ to help form a deeper connection to the brand.  These transition moments happen when visitors are the most open to an emotional response and can occur during booking, arrival, entry and exit from exhibitions, using the café or shop and leaving the building.

Examples:

INSIGHT

Insight relates to enabling visitors to discover something new or find new inspiration which is an important value-add to the overall experience. The ability to gain a deeper understanding of a topic of interest adds to the excitement, and can even trigger a sense of adventure when inspired to get involved.

Examples:

CONNECTION

Creating an emotional connection with visitors can be difficult, but behavioural science can maximise the chances of success. Enabling visitors to be surrounded by people with shared interests, and feel a sense of belonging during the experience can help forge a deeper connection. This increases the likelihood of visitors sharing their experience with friends and family and thus generate additional visits through recommendations.

Examples:

Delivering memorable customer experience goes beyond delivering the basics – it’s about going the extra mile in key moments of the experience that really matter. In short, it’s about being EPIC!

For many leisure hotel guests, the creation of a meaningful and memorable experiences is particularly important, with holidays representing a significant opportunity to reconnect and recharge. A way in which we can judge the success of an experience is through the EPIC framework.

So just how important is EPIC for hoteliers, and how can it generate a positive guest experience? Responses to one of our surveys provide an interesting view of which brands perform best at delivering memorable experiences.

ELEVATION

Elevation refers to positive experiences which are out of the ordinary and unexpected. Brands that successfully differentiate themselves from competitors often have a unique offering that surprises and entices guests. A few brands that performed particularly well on this pillar in our research are Shangri-La, Four Seasons, Sofitel and Hotel du Vin. These are some examples of where hotels deliver elevation:

PRIDE

Pride refers to making guests feel valued, and staff play a key role in achieving this. This is where hotels have a significant opportunity to excel as taking good care of guests is at the core of the hospitality industry. Our ClearSight data shows that this pillar is, by far, the strongest for hotels. Brands that performed well include Malmaison, Mercure, DoubleTree by Hilton and Marriott. Here are some examples of where hotels are creating a sense of pride:

INSIGHT

Insight refers to discovering something new or gaining inspiration from your experiences. In a hotel this could be discovering more about your destination or learning more about the hotel itself. Our data shows that brands that performed best at this were: The Ritz-Carlton, ibis Styles, Four Seasons and Village. These are some examples of how hotels are giving guests insight:

CONNECTION

Connection refers to a sense of belonging and being surrounded by like-minded people. In the hotel setting, this generally refers to the sense of being at ‘home’. Our research found brands that performed best at creating this connection were The Ritz-Carlton, Macdonald, Ramada, and Hilton. Here are some examples of where hotels are delivering this:

Often quick and simple gestures can make a memorable impact on someone’s hotel stay. Personalised and caring service can make guests feel special and valued, contributing to building trust and encouraging repeat visits. This even was reflected in a LinkedIn conversation where we discussed the topic of memorable hotel stays!

During the pandemic, the residents of Venice found they were happier looking out on dolphins in the Lagoon than cruise ships when the sudden reduction in travel had an immediate impact on the environment around them.

Venice had been one of several global focal points for concerns about over-tourism, and this summer, the city submitted plans to control the number of visitors, in particular day trippers. The proposals were intended to encourage more permanent residents, limit the stock of private apartment rentals and bring in a reservation system with an access fee to manage day visitors. In July, it banned all cruise ships from sailing through the city centre. Good news for the dolphins.

Prior to the pandemic, proposals for charges to visit destinations such as Venice were met with objections over elitism – surely, it’s everyone’s right to visit St Mark’s Square? – but has the pandemic shifted that mindset?

We live in an age where there are more causes than room for badges on a jacket, but our research on brand purpose has found that messaging on environmental issues has broader support than other causes and much less distinction across demographic groups. Political issues may polarise us, but we’re united in our concerns for the environment.

That doesn’t mean that it is without its issues. Consumers have fears over greenwashing and whether brands are selling a message they’re not backing up with action.

And while concern for the environment is high, we have found that it is not the main motivator of leisure travel choices with the weather and price ranking at one and two, respectively. Sustainability trails far behind at 25.

While sustainable standards are not a key motivator of leisure choices, they are becoming a hygiene factor. If sustainable standards are clearly not being met at a leisure organisation, people may start to avoid it – now or in the future.

The good news is that people are happy to undertake a range of different sustainable practices, from recycling their rubbish to flying with lighter luggage. They also showed a willingness to make small sacrifices, such as limited access to conservation areas and a day without meat on the menu – small changes which have been shown to make a difference. Sacrifices should be re-framed as positive actions, empowering visitors to perceive they are helping, not losing out.

The urge to travel is strong and dreams of far-away places mean that long-haul flights will not fall foul of flight-shaming trends. But we have found that, when framed positively, behaviours can be changed to benefit all.

This is a controversial question – especially for me, having worked with hoteliers for the last seven years – but it’s one I’m willing to put out there to share learnings in the customer experience (CX) arena. After all, we learn from the best.

Hotels were known for providing and leading the way in customer experience, well before we even knew that it was a thing. Hotels are hospitality, and hospitality is CX.

Let’s compare retail CX to hotel CX for a moment. How many shops have you walked into and the assistant tries not to make eye contact with you by looking busy? Or the banks with their vacant counters and building queues while the only visible staff carry out their paperwork? Compare and contrast these experiences with the hotel receptionist trained to drop everything to greet you, or the general managers patrolling their lobbies welcoming guests. Which one of these elevates the customer?

It can be argued, of course, that the likes of John Lewis are much better at CX than the average retail outlet, and Metro bank provides more opening hours than other high street banks. And not all hotels are perfect – some fall a long way short. But, in my opinion, an ‘average’ hotel still trumps even the very best from other sectors.

So why am I putting it out there that homestay may be leading the way in CX?

I’ve recently returned from a trip to Porto. I booked a 2-bedroom, 2-bathroom apartment with a mezzanine and three balconies. I paid around £140 a night for this beautiful apartment, centrally located and immaculately kept. Yes, it was off-peak, but when I looked for a hotel bedroom for £140 a night during the same weekend, I didn’t get a suite, kitchen and three balconies.

However, astounding as they were, it wasn’t the facilities that elevated my experience; it was the hosts.

Before arrival, the hosts contacted me to tell me they were ‘excited’ about our visit and asked what they could do to provide us with ‘the perfect stay’. They gave us local recommendations, a virtual Porto brochure and offers of help to get from the airport. I noticed on the Airbnb app that it tells the booker how quickly hosts reply to their guests, and mine said ‘less than one hour’- that’s impressive!

On arrival, they allowed us to check-in hours before for no extra cost. They waited for us to arrive and provided a guided tour of every facility. Along with this, an honesty bar was available with a personalised wine selection, a local’s manual, a complimentary bottle of port, a message each morning to check we slept well, and whether they could do anything to assist – the list goes on! How many hotels are doing this at £140 a night?

It got me thinking: how can hoteliers compete with this personalised experience? How can they motivate staff to go the extra two miles for their guests (because one is no longer enough)? Is it a matter of ownership? For the most part, your Airbnb host owns the property you’ll be occupying and it is that owner with whom you interact; its reputation as a property and their reputation as a host are one and the same. Every customer experience, because there are relatively few of them, links directly and doubtless very visibly to the likelihood of getting a future booking. The same is less frequently true of a branded hotel and maybe that’s the issue.

A cult-like following

In the Western world, at least, users of Airbnb overwhelmingly become advocates of the concept and the site. I count myself as one; despite hearing about several bad experiences – the sort of experiences you wouldn’t get with a hotel – I have no qualms about booking with Airbnb or recommending it to others.

It seems I’m not alone. Our Hotel Guest Survey records relational Net Promoter Scores amongst recent users of the brands it tracks, and in 2021 Airbnb consistently places ‘on the podium’ throughout Europe and the USA – displaying a level of consistency that most hotel brands would kill for.

So, is homestay a leader in CX? Our research and experience suggest the answer is ‘Yes’, and it’s down to those super hosts who elevate the guest experience with memorable moments.

Learn more about our approach to customer experience and the power of memorable moments.

This might seem like a radical idea, but I’d like to propose that Customer Experience (CX) be put on the Corporate Social Responsibility agenda. But first, let’s start with defining what Corporate Social Responsibility is. According to the Australian Human Rights Commission, “The concept of Corporate Social Responsibility (CSR) is generally understood to mean that corporations have a degree of responsibility not only for the economic consequences of their activities but also for the social and environmental implications. This is sometimes referred to as a ‘triple bottom line’ approach that considers the economic, social and environmental aspects of corporate activity.” The four pillars considered the mainstay of CSR are environmental, ethical, philanthropic and financial.

I’m here to make the case that CX sits firmly amongst a company’s social responsibilities. Now this isn’t to say that it should be the only element of CSR, just that it should have a seat on the table or, if you like, a place on the KPI dashboard.

Why? Because brands can have a significant impact on people’s day-to-day lives. In fact, interactions with brands have the power to make or break a person’s day. Consider the impact of these events on a customer’s sentiment towards a brand measured by the NPS* taken from our Australian Moments of Truth Quarterly Benchmarking Study in Retail Banking based on defined pathways.

*NPS = Net Promoter Score, a rating of how likely a customer is to recommend a brand, therefore a measure of emotional sentiment.  The NPS score is comprised of the % of Promoters (rated 9-10) less the % of Detractors (rated 0-6) on a scale of 0-10).

In our latest research, we asked banking customers what particularly positive and negative moments they recall having with a brand. We’ve called these ‘Magic’ and ‘Tragic’ moments. Magic Moments are those which have the power to influence someone’s day positively. Below is an example of how a negative interaction with a brand can be partially overcome with a positive emotional interaction. Operationalising emotions can provide a buffer against suboptimal operational outcomes.

In both examples, there were a series of straightforward rational events. A call was either going well or poorly based on a series of rational actions, which all impacted the customers’ mood and sentiment towards the brand. But the endpoint had a totally different emotional outcome based on their perceptions of the call centre rep’s demeanour, e.g., did they seem friendly and supportive or uncertain and dismissive?

In Australian Banking, our data shows that, fortunately, there are more Magic (30%) than Tragic (13%) experiences, but we’d like to see that gap widen. We can do better as an industry! From a net positive impact point of view, CBA is the best-performing Big4 Bank. Newcomer UP stands out for performing well on both Magic and Tragic. Macquarie has a relatively low Tragic footprint but offers the lowest amount of Magic.

It’s easy to get blasé towards numbers but remember that behind the numbers are people and that the numbers reflect how those people felt about their interactions with the brand.  Here are two specific examples of Magic and tragic experiences in banking:

TRAGIC “ANZ were unable to resolve a simple credit card problem I had with my current limit – The branch staff were hostile, unfriendly, unwilling to assist and virtually useless. The problem was not resolved, and I left the branch feeling an overwhelming sense of anger, grief, dissatisfaction and depression.”

ANZ NPS 1

MAGIC “It was about 16 years ago when the bank repossessed my home as I couldn’t sell it. I was SO distraught and SO upset. I remember going into the bank branch, Blackheath. The staff treating me the same [as everyone else] was a tonic I desperately needed and made a HUGE difference to me. I have NEVER felt looked down on over the years and that’s part of the reason that I love the bank so much!”

CBA NPS 10

We analysed 2000+ of these stories and were struck by the strength of the emotion in these examples, “an overwhelming sense of anger, grief, dissatisfaction and depression”! But why does this make it a CSR agenda item? Because there is countless research demonstrating that emotions can impact our overall mental and physical wellbeing. Just think about when you’re stressed; you feel it in your body. It affects your mood. But these emotional experiences also impact the people around us. We all know how our emotions can drive us. If we have a bad day, we share it. Our mood can influence the people around us positively and negatively. If we’ve had someone be rude to us, how does that impact how we treat the next person? And it’s the same with positivity, we share it. When we experience the emotional highs and lows in life, it’s a butterfly effect on the world around us.

I’m certainly not suggesting that companies shouldn’t also look to do good in the world in the other areas of CSR. Still, the conversation about making a positive impact on the world should also include the day-to-day impact on a brand’s own customers. Let’s face it, most of us would rather work for and buy from a brand known for doing the right thing by customers and sparking joy rather than a brand that triggers anxiety and grief in its day-to-day interactions.

The good news is that the emotional impact on customers can be operationalised by any brand and measured and tracked. In our analysis of 2000+ Magic and Tragic moments, we were struck by how often they existed in the everyday. And we were struck by how simple some Magic moments could be to operationalise. Small things like being offered a cup of coffee while waiting in the branch had a huge emotional impact. We’ve captured thousands of points of feedback on CX, and it still surprises me how often comments like “didn’t feel valued” and “was rude” sit amongst that feedback. It would be ambitious for brands to totally eliminate all the Tragic moments, but certainly, it should be a goal to reduce them and eliminate rude behaviour towards customers.

Recent times have seen economic news hit the front page with daily regularity. While oscillating market conditions have dominated the headlines, consumers have seen letters on their doormats from their mortgage providers and energy companies with bad news. A trip to the shops offers little respite.

And consumers are responding accordingly. Our Moments of Truth study tells us that two in three consumers cut household energy usage. A third plan to leave the car at home, with some of that (1 in 7) taken up by public transport.

The OBR anticipates household incomes falling cumulatively 5.7% over ’22 and ‘23, in part due to tax rises, cuts in energy subsidies and guaranteed rises in fixed-rate mortgages for 2m households (costing each mortgaged household £3,000 extra in 2023). The 9.7% increase in the minimum wage and 10.1% rise in welfare benefits and pensions in April 2023 will however soften the blow somewhat for lower-income households.

Meanwhile, the Resolution Foundation for lower-middle-income households describes 2023 as a Groundhog Year – repeating 2022, with another ration of pain on the way.

There is light: according to data from Consensus Economics, aided by falling energy prices and better than anticipated business and consumer sentiment, the UK economic outlook for this year has improved from its most recent darkest days.

But that move towards a brighter outlook has yet to be fully felt in the present. Moments of Truth results show that 75% of consumers felt, either through choice or necessity, the need to be cautious, with discretionary spending largely affected.

Consumer spending on restaurants (51%), entertainment (37%) and holidays (33%) are all being hit, (although the sight of packed bars and restaurants in many towns and cities might give you the opposite impression).

Beyond spending cuts, 25% of consumers expect to dip into their savings this year to tide them over and over one in five have already used their overdraft at least once in the past 12 months.

Regardless of whether these dire predictions pan out as forecast or the economy continues to fluctuate, giving us glimpses of recovery and calming waters, banks simply must invest time and energy into proactively forging strong relationships with their consumers.  Moments of Truth tells us that if the attention is given now, they’re in with a good chance of building a lifetime of loyalty.

There is work to do.  To date, only 10% of those who claim to be ‘struggling’, expect to discuss their financial situation with their bank in the next three months.  If the relationship was sound, we’d expect the trust that comes with it to drive conversations about short- and long-term solutions.

Which banks are getting it right?

first direct is one to watch. According to customer ratings in the Moments of Truth benchmarks, it offers by far the best overdraft customer experience.

first direct also held an impressive lead over its peers for telephone contact throughout 2022. 50% of people contacting the bank got through to a person in just one minute, which is significantly better than the industry average of 20%. On top of that, queries are dealt with swiftly and effectively, without the typical sources of friction or stress. The same cannot be said for some other providers assessed by the study.

Elsewhere, Newcastle Building Society, Coventry Building Society and Monzo offer clear demonstrations of best practice across various offline and online experiences – be that through minimising branch queues, efficient product applications or game-changing app features.

Ultimately, a brand has the power to make or break someone’s day. Operational success or failure can have a huge emotional impact on the end customer, and the shockwaves can be far-reaching when it comes to money – especially if that person is already feeling under pressure.

It is vital that customers enjoy a close relationship with their bank, so that any issues can be resolved before they become crises. Banks and building societies need to be accessible and approachable – just as we are seeing with the top performers in the Moments of Truth results. Recent market volatility placed extra emphasis on the importance of this and we are pleased to see banks and building societies working to create outstanding customer experiences.

The leading players are proof that when customers feel like they have less, they can still experience more.

About the research

Moments of Truth assesses consumer banking experiences through 30,000 online interviews annually, across 80 providers and 16 key customer journeys. Learn more.

Traditionally, banks have acted as the facilitators of finance and transactions, resting on a solid footing of traditional values, trust, and history. These values were built at brick-and-mortar stores through personal relationships and brand loyalty that started when we were children. Fast forward to today, the digitalisation of retail banking means that customers can switch to a more appealing offer more efficiently than ever.

In the digital age, banks are striving to foster customer loyalty by creating value that can replace the in-person elements of banks’ value proposition of years passed. Part of this shift involves streamlining and unlocking data that can create engagement. Engagement is typically conceptualised as having two components: the extent of usage (e.g., frequency, duration) and the subjective experience (e.g., interest, appeal, and attention). When deployed effectively, behavioural science can help increase the stickiness of digital banking tools by strengthening consumers’ habitual use.

Here are four behavioural science principles that are proven to improve customer engagement with digital products.

Hyper personalisation and contextual banking

Successful digital banking products of the future will provide a contextualised banking experience tailored to individual users based on a variety of information like location, time of day, personal preferences, money habits, and behavioural patterns. Contextual banking is based on the behavioural science principle of Just-In-Time-Adaptive-Intervention (JITAI). It delivers pertinent information to customers where and when they need it based on data analytics and intelligent algorithms. For example, an app might send a notification based on the user’s location or the time of day based on their previous behaviours in those contexts.

Goal setting and behavioural monitoring

These are two of the most effective behaviour change techniques (BCTs) for digital tool creators. While it’s common for banks to include some elements of goal setting and behavioural monitoring within Personal Financial Management Tools, this will become increasingly common and sophisticated as part of the new world value that banks create for their customers. Goal setting is strongly linked to increasing motivation but also usage engagement by encouraging users to log in and continually check their progress. In the future, these BCTs will become far more personalised and targeted using open data frameworks. Banks are not yet ready to utilise all the data that is available to them, but many are testing and trying new things.

Gamification

Refers to the inclusion of game-like elements like point scoring, rewards, and rules in non-game contexts, to promote user engagement with products. In Australia, the CX-focused and digital-only brand Up leans heavily on gamification to encourage a positive emotional connection with customers. Their ‘Save Up 1000 Challenge’ combines gamification, goal setting, and behavioural self-monitoring in a robust and engaging offer.

Capacity building

Key trends in digital banking tend to support customers to self-manage their wealth and money. Therefore, retail banks will grow as agents of empowerment, helping individuals set financial goals (BCT: goal setting), track their progress towards them, and develop positive money habits and financial literacy. This will become a central element of banks’ offers, with new value created for the customer.

How to get started

The first step towards designing a behaviourally informed solution or feature is to define your behavioural challenge. We recommend that clients start with an understanding of the user’s job to be done (JTBD). This involves studying what customers are trying to accomplish rather than what they are saying they want, especially in areas with insufficient solutions, as these often make for great opportunities for innovation that gets to the heart of the job to be done.

“If I had asked people what they wanted, they would have said faster horses.” Henry Ford

JTBD is best reduced to its simplest parts while taking a zoomed-out view. Consider using a sentence framework that considers customers’ JTBD in terms of its verb, object, and context. The job to be done should focus on the end goal, not the task at hand.

“Save $60,000 for a house deposit in a rates driven market” rather than “open a new high interest saving account”

Prioritise opportunities to tackle those JTBD. While many opportunities can be available, it is essential to identify the highest value ones for your brand. What aligns most with your values and current product strengths?

There’s no doubt that COVID-19 accelerated consumer expectations around seamless digital experiences, which has driven banks to invest in furthering their digital capabilities. This is an obvious way forward for both customers and brands. Brands can lower the cost of service, and customers can avoid the annoying telephone and branch queues. While many things can be done online using self-serve, we still gravitate towards human intervention and assistance from time to time. “Chat” is a logical way of bridging these two worlds, and our research shows a growing use of this channel.

But whilst Chat is growing, our Moments of Truth study in Australian Retail Banking has shown that, as yet, there has not been a noticeable drop off in the use of other channels. Our results also show that for those that use it, chat is usually the first port of call to resolve the query and most report that they are likely to continue using it. Customers are using chat almost equally across channels: online banking, the company’s public website, and from within a mobile app, which shows that it’s an appealing way of engaging with brands across a range of situational contexts. Our research shows that at this stage, the customer ‘job to be done’ that drives usage of the chat function over other channels is a general inquiry or problem resolution rather than product research.

Our results tracking the performance of Chat across Australian Retail banking reveal four important operational breakpoints for brands to understand and monitor.

These industry breakpoints are consistent with the types of guardrails we see for interactions in other channels. They consider customers’ expectations around how long it takes to get a response, length of chat, and resolution rates.

Customers expect a response within 5 minutes, and NPS drops off markedly if the chat duration exceeds 10 minutes. These figures also outline that knowledge is power. Customers are more likely to recommend the channel when an organisation can quickly and effectively answer questions.

A key measure that is also highly important is how easy they were to deal with, which is going to be in part influenced by these operational outcomes, but is also a marker for the quality of the interaction on the chat itself. And that’s where brands are still struggling with the purely digital part of chat. Across the industry (and, of course, it varies by brands), the mix of chat conversations across humans (live chat), AI chatbots and both is roughly equal. And whilst the AI chatbot-only conversations outperform on efficiency measures, response time and chat duration, they carry lower resolution rates and lower customer satisfaction with “easy”.

If we equalise the operational elements of the experience across these different use cases, we can see that the Human obtains an overall better score for the SAME outcome than the other two delivery methods. In the hypothetical scenario below, where a chat enquiry is answered in under 5 mins, completed in under 10 mins, and resolved by the end, we can see the difference in NPS across different chat agents.

What does this mean for brands?

To increase perceived humanness, many systems with conversational user interfaces (e.g., AI chatbots) use response delays to simulate the time it would take humans to respond to a message. However, as we can see from the breakpoints above, delayed responses can negatively impact user satisfaction, particularly in situations where fast response times are expected, such as in customer service. Brands who engage in delayed responses to Chat interactions, even if only a few seconds, could be missing the point of this channel! They also look to use Natural Language Processing but have a way to go.

The disparity in NPS results across digital and human poses challenges for brands looking to remove humans from the equation altogether and still maintain positive customer sentiment towards the channel and ultimately, the brand. There is a fine line between technology and human interaction due to the empathy and sense of value a human can provide. These experiences need to be seamlessly connected. At this stage, the technology is not yet able to provide a seamless experience as well as high-resolution rates, so humans still have to get involved. But one thing that Chat does do is remove some of the communication issues that can arise in telephone conversations. This, in part, maybe a way to get around some of the implicit human biases that customers have with offshore call centres that are more formulaic and use more standardised responses.

It’s not so surprising, then, that at this stage of the game, the brands which are performing the best in Chat are the ones that have a higher use of humans in the interaction. Newcomer UP has the highest % of human vs AI chatbot interactions, followed by ING. But UP’s lead amongst the competitive set is also fuelled by market-leading resolution rates; 97% of its Chat interactions are resolved by the end, vs only 75% to 80% of those amongst the big4 banks. Westpac stands out for exceptional response times, with 64% answered within 5 minutes and 87% dealt with in under 10 minutes which far exceeds CBA, ANZ and NAB. But this lineup is ever-changing, and it’s important to keep your finger on the pulse and monitor whether you are within the critical operational guardrails that underpin good performance outcomes.

Digital adoption is not an aged-based play!

Naturally, any conversation involving the digital vs human debate sees our clients speculating that it’s really just older people who hold onto human interactions! Whilst as a general trend, this is partly true, digital has been more readily adopted by younger cohorts; we would be missing a trick if we ignored the wider cohort of customers. Our research shows that across brands 32% of customers aged 50 to 74 think they will use Chat a little, if not a lot more, in the future. At this point, I like to share the experience I have with my 80-year-old mother, who whips out her mobile to check the menus via the QR codes the moment we sit down in a café, vs me a young at heart and I like to think forward-thinking 50 year old, who prefers to go up to the counter and get the real thing. Age is not the only factor and many other contextual and psychosocial drivers of digital adoption play a role.

If brands truly want to drive digital adoption, it’s not a great strategy to sit around and wait for a new generation of customers! Here are three behavioural interventions you can use to help reframe preferences for a real human, highlight the benefits of digital, and drive greater use of your Chat function. These are drawn from BVA Nudge Consulting‘s proprietary Drivers of Influence, summarising 200+ human biases into 21 Drivers of Influence©. We’ve made it simple so you can apply it!

Our Australian Moments of Truth Study in Retail banking benchmarks both the behavioural and operational aspects of Chat experiences and allows brands to set themselves apart from the rest, increase efficiency and, most importantly, customer satisfaction. MOT complements your internal perspective giving a competitive lens and powerful insight into industry breakpoints and acceptable service thresholds for operational performance. Context is king! The market is always moving, and you can guarantee that your competitors are also investing in digital capability.