Fintech and customer-centricity go hand in hand. The Fintech movement originated from the observation that traditional incumbent banks insufficiently served their customers and focused too much on their own interests. This customer-first focus of the early Fintech pioneers is still at the heart of most Fintechs today, which means also that customer-centric design is a top priority for most Fintechs.
Although every company preaches to be customer-centric, very few companies have properly implemented it. While simple at first sight, i.e. continuously listen to your customers and design according to their needs, in reality this is much easier said than done.
In certain cases it might not even be the best strategy, i.e. a product-centric approach, where a Fintech start-up pushes its own product vision towards the customer, might be a more successful recipe.
In this blog, I hope to give some pitfalls and best practices in adopting a customer-centric approach. Obviously, there is no perfect recipe to follow to become a customer-centric organization, but at least I hope that those observations can bring some inspiration.
A customer-centric organization is focused on understanding and meeting the needs, preferences and expectations of its customers. In other word in a customer-centric organization, the customer is at the center of all decision-making, from product development to marketing and sales. Customer feedback is regularly collected and used to improve products and services.
This in contrast to a product-centric organization, which is focused on developing and delivering the best possible product. Such an organization may prioritize product features, quality and innovation over customer satisfaction and may rely heavily on its unique product capabilities to drive its business.
Contrary to popular belief, a customer-centric organization is not necessarily better than a product-centric one. Some of the most successful companies, like Google and Apple, are product-centric companies.
Most companies will therefore try to find a good mix between both models, which can be a very successful approach, but can also be a recipe for disaster, due to a lack of business prioritization and focus. Ultimately this comes down to senior executives defining a clear business vision of what are the goals and priorities of the company.
Having established the basics, let us have a deeper look at some common practices and pitfalls in customer-centric design:
Talking to customers can be scary and is not so easy. Especially in large organizations, the distance between customers and product managers can be large, as there are specific departments managing customer relations (like the sales and customer success department). Additionally large organizations fear that asking bad questions can negatively affect customer relations or that posing specific questions can be a liability to expose confidential info about the company’s strategy. This leads to companies asking customers to sign NDA agreements before talking to them, which obviously becomes an enormous hurdle and burden for customers to participate in a feedback process.
There are different ways to determine what customers want and need, which makes the choice of the optimal approach very complex. Let us have a look at some of the methods that can be used:
Directly talking to customers. This can be very formalized via interviews (for specific topics or contacting all customers after key milestones, like after onboarding completion) or via user groups, but to start with it can be easier to find more informal ways to discuss with your customers. This can be on events, exhibitions or any other informal moment.
Additionally you need to decide who will talk to the customer. One way is that the sales and account managers try to capture the customer needs. The advantage of this approach is that this can be easily included in the sales process and that those people already have continuous interactions with customers. The disadvantage is that such sales profiles don’t always have the skills and expertise to analyze and dig into the specific needs. Additionally if sales and account managers need to dispatch the collected info to product managers, obviously there will always be a loss of info and nuance (which is inherent in every communication).Surveys, scorings and reviews: customers can be asked to participate in different surveys and give also scorings and reviews on specific moments. This can be well automated and allows a more objective (and quantifiable) input from customers, but there are also a lot of issues with this approach. Typically there is a specific subset of customers (specific profile) answering surveys and giving scorings and reviews, which makes it not very representative. Additionally it is very difficult to write good questions. Closed questions, like multiple-choice, allow faster input by customers and allow to easily generate quantitative analyses on the results, but they can be very steering and it is difficult to capture the underlying intent. Open questions can give more info, but customers rarely do the effort to write a lot and it is very difficult to process those kinds of replies.
Surveys, scorings and reviews: customers can be asked to participate in different surveys and give also scorings and reviews on specific moments. This can be well automated and allows a more objective (and quantifiable) input from customers, but there are also a lot of issues with this approach. Typically there is a specific subset of customers (specific profile) answering surveys and giving scorings and reviews, which makes it not very representative. Additionally it is very difficult to write good questions. Closed questions, like multiple-choice, allow faster input by customers and allow to easily generate quantitative analyses on the results, but they can be very steering and it is difficult to capture the underlying intent. Open questions can give more info, but customers rarely do the effort to write a lot and it is very difficult to process those kinds of replies.
Analytics on historical data: by analyzing historical data (like prospect-to-customer conversion data or data of customer churn) a lot of interesting information can be captured. This approach is often a cheap and quick way to gain insights but comes also with some issues. First of all historical data is no guarantee for the future (as the company, product or even the customers might have evolved), and there is also the issue of data quality and the risk of incorrectly analyzing the data. Modern data analysis tools allow to easily dig into the data and easily generate dashboards, but often the statistical relevance of certain conclusions on the data is overlooked.
Real-time monitoring of the customer behavior. By continuously measuring the customer’s behavior, you can better understand how your customers interact with your solution. This goes from monitoring all business actions done by the customer, but also monitoring where the customer clicks or even moves his mouse.
Often companies will also setup experiments (e.g. in the form of A/B testing or canary testing), where specific features are only enabled for a sub-segment of customers or even different flavors of the same feature (e.g. different screen designs) are put in production and randomly assigned to customers. These kinds of experiments allow to learn a lot about the usage and value of specific features and design choices.Where the above tools are already commonly used and applied, many other techniques exist as well. Such as
Surveys where detailed screen mocks (potentially clickable) of future product features are showed and evaluated by prospect and/or customers
The use of an open roadmap, on which customers can score, which feature they want to get developed next.
Making use of user testing labs, where (potential) customers (carefully selected to be as representative as possible) do specific tests with the solution. During these tests, the users are observed how they interact with the platform. This can go from timing how long each action takes, tracking eye movement to see which part of the screen draws the user’s attention, tracking mouse movements to see if the user can intuitively execute specific steps…
Beta testing groups: allow users of your solution to onboard as Beta users to get early access to new versions. By creating a real community with those Beta users, good feedback can be collected in an easy and quite cheap way. The main risk with this approach is that Beta testers are not always very representative (typically quite tech-savvy users) and certain Beta testers can really dominate the feedback process.
Customers lack a long-term vision and focus heavily on short-term wins. This means that all customer feedback should always be fitted (refactored) in the overall company business vision. If Henri Ford had asked his customers what they wanted, they would have asked for a "Faster Horse". Obviously, this is a bit anecdotic, but it does show the inherent complexity and risk of asking customers what they want. Customers can rarely express in a good way what they want and can rarely envisage how a new innovative solution could radically improve their work/processes. Additionally people have a natural fear of change, so customers will not often propose something that radically changes their current way of working.
Focus on the underlying needs. In all customer discussions, product managers should focus on the underlying needs, i.e. what are the problems customers are facing and what do they want to accomplish. Too often product managers have the tendency to discuss solutions with customers. This can lead to suboptimal results, as customers are not product designers and customers often propose features, which lead to heavy, overloaded solutions, with a lot of features which are almost not used. It is the product manager’s role to see overlapping needs between different customers and find common ground, but also to filter out certain ideas from customers, if too specific for 1 customer or if too difficult to generalize.
Additionally product managers often tend to overemphasize on technology (the possibilities of new technologies but also the limitations), which also leads to a lack of focus on the customer experience.Manage expectations. Every interaction with a customer about product evolutions leads to expectations. If those expectations are insufficiently managed and not addressed in new versions of the solution, this can lead to a lot of frustration of customers and likely a lack of willingness to give again feedback in the future. It is therefore critical to properly manage expectations during each discussion with a customer, but also to properly communicate why certain product evolutions are prioritized over others and to give feedback when a feature suggested by a customer is put on the roadmap and when it is delivered.
It’s all about execution. Even if you perfectly know what should be done, if you are not able to execute upon your idea (i.e. convert your idea into a working solution), your idea is worthless. VCs know this very well, which is also the reason founders with a proven delivery track record can much more easily raise funds.
Good execution means delivering the right product, within a limited time and budget and with the necessary quality. A company which lacks the agility to quickly convert customer feedback into solutions, will lose the customer’s enthusiasm and willingness to improve the system. This means that a product manager primary focus should always be to ensure that the elements that were agreed to be improved/built are also completed within agreed conditions. Only when this primary goal is properly addressed, the product manager can look for new innovations.Do not forget about profitability. Obviously, it’s good to listen to customers, but a company’s primary objective remains to be profitable. This means it is not sufficient to just figure out what customers need, but even more importantly to determine if customers are willing to pay (extra) for it. This is still a major pain point in the Fintech industry, i.e. many Fintechs have developed superb solutions, which are adored by their users, but they are not able to monetize on this positive experience.
Hope this gives some inspiration to further put the customer at the center of your organization.
Check out all my blogs on https://bankloch.blogspot.com/
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