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1.2.3 Thought Trap: Understanding the Customer Is Sufficient for Securing Future Viability

The vast majority of banks operating on the market has been dealing with customers for decades, and in some cases even centuries. Equally, bank employees usually have many years of experience with direct customer contact, they are very well trained and usually have a high level of “basic friendliness” as well as a genuine interest in their customers. When recruiting new staff, social competencies such as likeability and empathy are demanded in equal measure with professional competence and assessed accordingly. In addition, not only have many banks been conducting “alibi market research” for a number of years, but they also integrate professional market research into their marketing activities. So banks understand their customers. But what is also key, alongside an understanding of the needs of the customer, is the awareness that customers often cannot translate their needs into new product or service configurations. One can survey customers, and they will respond using their own language. But it is not easy for customers to formulate what they really want, what they need, what satisfies them, what enthuses them, what it is that makes them a fan! We are all customers, and it is true of all of us. This phenomenon can be observed not only in banking, but also in many other sectors and industries. We cannot always specify what drives us, what fascinates us, or what convinces us. The phenomenon is expressed in a quotation attributed to Henry Ford: “If I had asked people what they wanted, they would have said 'faster horses'!” His customers at the time knew only horses as a means of transport (Ford 2013).

But even in recent times innovative products have emerged without the involvement of customers in the product development. When presenting the iPad Steve Jobs was asked what market research his company had done. Jobs replied indignantly: “It's not the consumers' job to know what they want.” (FAZ 25.8.2011).

Today's customers know only classic banking as a business concept. Understandably, they have no real notion of how modern and customer-centred banking might look. Nevertheless, asking customers about their satisfaction levels, wishes and ideas remains an important instrument in bank marketing and belongs in the operative toolbox of every bank. Customer surveys and market research are valuable, because they can provide hints and impulses on product and service innovations, on better processes, or on unknown problems (blind spots such as annoyance about a process). Furthermore they signalise honest appreciation of the customer. Especially in this age of social media and mobile internet, customers see almost everything and talk about almost everything. Annoyed customers who leave a branch office or website turn immediately to their social networks in order to post their frustration about the advisor or bank in question.

A more sensible alternative or extension to conventional customer surveys are customer journeys, which can provide so-called consumer insights (Foll 2007). Customer journey is a marketing term and refers to the individual phases experienced by a customer before deciding to buy a product. From a marketing perspective the customer journey denotes all touchpoints of the consumer with a brand, product or service. These include not only direct points of interaction between customers and companies (advertisements, website, etc.), but also the indirect contacts, from which third-party opinion is gleaned on a brand, product or service (rating portals, user forums, blogs, etc.) (Faulkner 2005). Though still widely unknown in the banking sector, these instruments are tried and trusted in many other areas—such as in the consumer sector. Here, the focus of all observation is on the understanding of the customer (insight). Thus ethnographic market research, for example, can generate further consumer insights by accompanying customers in their everyday lives—what do customers do in the bank? With this form of market research banks get an insight into the everyday lives of their customers. They understand how their attitudes and opinions are formed. The banks experience and observe their customers by observing the everyday actions of these customers in their real environment (bank, office, leisure time, at home, out and about, etc.). Banks also have the opportunity to better understand the ideas and values of customers. This approach provides valuable impulses that depart from the traditional perspective (Spiegel Institute 2013). In that sense consumer insight provides unexpected access to customers' individual human behavioural patterns. It often contains a surprising realisation—a kind of “wow effect”—about what concerns customers with regard to products, services or the entire brand of a bank. Such insights into customer behaviour and comprehensive knowledge of the hidden and previously unknown motives, attitudes, values, views and consumption patterns of customers form the basis and key qualification for a successful customer focus and clearly “understanding and knowing our customers better”.

An illustrative example of the benefits and opportunities presented by consumer insight is a case study of property owners with a photovoltaic installation. When asked why they opted for a photovoltaic system, the first response was the possibility to get cheaper credit, to receive state subsidies and to attain high yields. After observing the daily routines of the house-owners, additional, previously unknown motives were detected, such as

• Independence from others (e.g., energy suppliers or price fluctuations on raw materials markets); strength; being regarded by neighbours and friends as particularly modern and ecological (image and status) and

• peace of mind, in other words the good feeling of doing something for the environment and future generations (future viability as a modern lifestyle).

These insights, which are very important not only for the development of products and services, but also for sales processes and consultations, may not have been attained from a conventional customer survey or market research.

Innovation management offers a whole range of other qualitative instruments and tools for intensive interaction with the customer; such as consumer and expert dialogues or consumer diaries or blogs, in order to generate insights and glean inspiration. The next step is to combine the insights gained and to subject them to an initial rough assessment. The classic formats here are creative and concept workshops with or without the involvement of external agents such as suppliers, partners, experts, not-yet customers or customers (Phaydon 2013).

Deutsche Bank is a pioneer in the sector, with its own think tank on Design

Thinking. Design Thinking is new innovation tool for developing unconventional approaches and ideas. The method is based on the principle that true innovation can occur only when the customer is placed at the centre of all considerations. The innovation method was developed as early as the 1960s at Stanford University in California (Stanford 2013). It involves customers closely in the innovation process. Teams are deployed for the project work, who act independently during the period of the project—just like a spin-off project. In the initial phase, all solutions are deliberately pursued, including those that appear absurd, in order to approach the topic more openly, rather than restricting oneself. Concentration on realisable results takes place only in the second phase. In each phase the early and cyclical implementation of ideas is pursued with the help of simple yet testable prototypes. Feedback is also integrated into the project work. This work is supported by a comprehensive toolbox composed of a variety of creative and innovative methods, as well as different presentation techniques. Katharina Berger, Head of Design Thinking at Deutsche Bank, said of the objectives and motivation of Deutsche Bank: “We at Deutsche Bank want to involve the customer in our innovation process in order to be able to better illustrate his needs. Design Thinking helps us to do this. At the same time this method fosters a collaborative work culture, which in turn promotes ideas. Thus in particular the attractiveness of the company for young talented people grows, but also the motivation of the existing employees” (Berger and Liebetrau 2012). Deutsche Bank has been using this method successfully since 2009 with a series of innovations that have been introduced to market, such as the future planner of Branch Q110 for the private banking sector (Berger and Liebetrau 2012).

As well as individual instruments and tools, entire methods taken from the field of innovation management can also be used in banking, such as:

• Service Design for the development of new services and processes (Koye and Liebetrau 2013),

• Blue Ocean Strategy for the development of completely new services and business areas (Kim and Mauborgne 2005), or

• Business Model Generation for innovative business models (Osterwalder et al. 2011).

 
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