FINANCIAL SERVICES

Every Customer Conversation is a Moment of Truth – Are You Ready? How Banks Can Successfully Manage Every Customer Conversation

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The Moment of TruthA customer service representative (CSR) picks up the phone. At the other end, a customer wants to increase their credit card spending limit. Does your CSR have the information he needs about this customer? Is he going to know what to do, and can he complete the change quickly? Will the right regulations be applied so that the interaction is compliant with fair lending practices? Can you increase the risk associated with this customer in real time without additional due diligence that drives added cost and benefits to your business? And will you able to capitalize on the conversation to increase the customer’s lifetime value?

With this common request, a moment of truth has arrived: The way in which you conduct this conversation will fundamentally alter the customer’s relationship with your bank. It will create a lasting impression – either good or bad – as it represents that moment when you can deliver an experience that either increases customer loyalty or drives the customer to defect.

Unfortunately, there many ways in which this moment of truth can go wrong. Common missteps include:

� The customer provides information to an IVR and is then forced repeat it all to the CSR.

� The customer endures long wait times while the CSR searches through multiple systems to find information and figure out the right process for changing the cardholder limit.

� The call does not meet compliance requirements because the CSR is unsure of which regulations might apply.

� The process to approve the change as outlined to the customer does not meet their expectations and a corresponding complaint call ends up costing the company more.

� The outcome is not what the customer expects and could begin to feel the company does not value her long-term relationship. She considers defecting to another company.

� The CSR delivers the “offer of the week” that is unrelated to the customer and situation. The offer is immediately rejected and offends the customer.

The problem is that this conversation has not been managed intelligently, resulting in an outcome that is unsatisfactory to all and leading to higher rates of policyholder defection, more expensive and less compliant interactions, lower profitability and reduced customer lifetime value.

Every customer interaction represents a moment of truth that will alter your relationship with your customer. Your ability to deliver an experience that satisfies the needs of each participant as the conversation unfolds can mean the difference between a high-value, long-term customer relationship – or a quick defection.

CUSTOMERSERVICE REPRESENTATIVE

EXECUTIVE STAKEHOLDERS

CUSTOMERMOMENTOF TRUTH

Do I have the right info?Can I focus on the customer?Can I execute the process quickly & correctly?Can I make a sale?

Can you do it fast?Can I afford it?Can you confirm now?Don’t bother me with irrelevent offers.

Can we improve the relationship?Can we meet retention & profit targets?Is the process efficient?Can we generate more revenue?

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Intelligently Managing the Moment of TruthEach moment of truth contains multiple tipping points that affect every participant such as the customer, the CSR or a branch agent and, ultimately, your bank. Each point must be carefully – and intelligently – managed to achieve a successful outcome. Consider the tipping points that are likely to occur when the customer wants to increase their card spending limits:

The fact is that your CSRs have conducted this type of conversation thousands of times. You understand the flow of the interaction, the information required to complete the transaction and the interests and needs of each participant. The difficulty comes in applying this intelligence consistently and accurately every time this process is executed, as well as directly aligning the outcome with a carefully balanced set of KPIs

Intelligent conversation management delivers value-added interactions by considering the individual and the interaction within the context of the customer’s overall relationship with your bank. Dynamically generated information, actions and offers help you successfully navigate each tipping point in the conversation to achieve the best possible outcome. With intelligent conversation management, you can leverage your data to automatically anticipate the individual’s needs and behavior, consistently apply best practices and guide the conversation so that it satisfies the requirements of each participant. Throughout an interaction, intelligent conversation management optimizes the conversation to offer your customers’ value-added experiences that are aligned with company objectives by:

� Delivering an intelligent, real-time view of the customer across channels.

� Automatically and dynamically guiding the conversation.

� Learning and adapting during the conversation to deliver the right information, action or offer at the right moment

Change to a Credit Card - Tipping PointsCustomer I want to spend as little

time as possible on the phone.

I want a seamless process and efficient and rapid outcomes.

I want immediate proof that the change is in effect.

I expect recognition that you value my business and I only want an offer that is right for me.

CSR I need information about this customer before I answer the phone.

I want to focus on the inquiry and not waste time navigating through complex screens and non-applicable regulations.

I want to answer the question without escalation, on the first try, and complete the task within my SLA.

I want to make offers that the customer will accept and which will make me money.

Executive Stakeholders

The conversation needs to strengthen the customer relationship.

The process outcome must meet profit and risk targets while retaining the customer.

The CSR must be able to complete the task efficiently and in compliance with regulations and assigned KPIs.

The interaction should generate additional revenue and maximize lifetime value.

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EXECUTE & ADAPT

DELIVER

OPTIMIZE

VALUE

PROPENSITY RISK

ANALYZE

MOMENTOF TRUTH

Intelligent conversation management provides capabilities to manage the flow of each conversation, leveraging a real-time view of the customer, predictive and adaptive analytics, integrated channels, and dynamic processes driven by real-time decisioning to achieve an outcome that meets the needs of everyone participating in the conversation.

Delivering the Intelligent View The starting point for intelligently managing each conversation is the ability to leverage your understanding of the customer, the information needed to support the particular type of interaction and the typical process flow. This can be as simple as automatically using information captured in different channels to jump-start a conversation. For example, when an IVR captures the information about the customer and the desired interaction to change a limit, you can use this intelligence to immediately populate the CSR’s desktop with the customers’ account and portfolio information as well as automatically initiate the right process. This enables your CSR to successfully manage the tipping point of having necessary information before he answers the phone, leading to a more effective and efficient conversation.

You can also use knowledge of past interactions in other channels to add value to a conversation. Suppose this customer recently emailed a local branch to ask about additional card products for their children going away to college. Using this information, the CSR can be prompted to follow up with the customer at the right time within the current conversation, increasing the likelihood of closing sales and delighting the customer on multiple levels.

The key to leveraging information gathered across multiple channels and interactions is the intelligent desktop, which offers a comprehensive, one-stop view of the customer’s relationship with your company. Using an intelligent desktop, you can serve up the right information and process for a particular customer and interaction in an intuitive and consistent way. This eliminates many of the stumbling blocks to successfully managing each tipping point: Branch Agents and CSRs no longer have to learn and use multiple systems to find information, increasing the efficiency and proficiency of your company representatives. Data maintained in the many systems used to support customer interactions, such as the account database or Customer Information File (CIF),

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Predictive analytics predict the best way to improve the customer relationship in an upcoming interaction. Adaptive analytics segment customers so that each interaction is personalized. Real-time decisioning applies these insights during each conversation based on the specific interaction, channel, customer responses, mood, compliance requirements and other factors that affect the predictive model. The result is actionable analytics, capable of dynamically adapting to recommend the most appropriate information, action, offer and resolution for the particular customer at the most appropriate time.

teller or branch sales and servicing systems, core banking systems, is accessible in real-time, improving accuracy and relevancy. And with the ability to deliver a role-based desktop, multiple users, including Branch Agents, CSRs and even self-service customers on your website can leverage automated intelligence. In fact, an interaction such as a limit change does not even have to be managed as a call center action at all. With the intelligent desktop configured for self-service and the ability to conduct conversations across channels, you can guide the customer through the process of requesting a limit increase with an immediate confirmation of the request delivered via email. Service level agreements can be applied for regulatory purposes and expectations of process cycle time to completion can be set with the customer so that repeat service calls can be avoided.

Driving Processes DynamicallyThe complexity of banking processes used across multiple distribution channels can make it difficult for Branch Agents and CSRs to deliver conversations that are customer-focused, efficient, consistent and compliant. Traditional business process management and business rules enable processes to be automated, which can significantly improve the consistency and efficiency of interactions. However, when process automation is integrated with predictive analytics, adaptive analytics and real-time decisioning, the “guesswork” is removed from the process. The flow of each conversation is driven dynamically with next-best-actions, offers and recommendations personalized to the customer and the specific conversation.

Predictive and adaptive analytics combine historical customer data with real-time information about the current interaction, such as the customer’s responses and mood, to dynamically understand and anticipate customer behavior, predict future value and assess the risk that this individual represents. Real-time decisioning leverages these insights to drive the conversation dynamically. The CSR is guided through the conversation so that the process is executed consistently. At the same time, the conversation is specifically tailored to the customer and the current situation.

For example, a wizard guides the CSR through the process of changing a limit, making sure every required piece of information is captured, the process is executed in the correct order and the right regulations are enforced. No longer burdened with trying to filter through data or decide what to do next, the CSR can focus exclusively on the customer, while the automated process optimizes efficiency, consistency and compliance. No matter how new or inexperienced the CSR, the customer experiences a confident, highly competent banking representative who can complete the request in an efficient and professional manner.

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Intelligently managed customer conversations that use predictive analytics, adaptive analytics and real-time decisioning can help your company reach its goals for increasing the profitability and lifetime value of your customers. Many interactions that were once considered simply service calls, such as a change to a limit, can now be leveraged to increase retention and wallet share. For example:

� Analytics can predict which additional products or services a specific customer is most likely buy and at what price. This prediction can be combined with real-time information to generate a highly relevant cross-sell or up-sell offer.

� Real-time awareness that the customer is unhappy during a conversation can immediately replace a planned up-sell offer with a retention incentive or, if analytics determine this customer is not worth retaining, no offer at all.

� Analytics and decisioning can assess the risk for this individual, either overall or by product, and the expected losses at the portfolio level. By interrogating data streams like credit bureaus, you can estimate the likelihood of a positive adjudication and the expected underwriting costs when increasing the risk or the risk associated with attriting the customer.

In our sample moment of truth, the quote for increasing the credit limit can take into account the customer’s risk factors, value to the company and so forth to present an outcome that is likely to be accepted while meeting your company’s profitability and risk targets. Knowledge of the customer and specific interaction can be used to generate a personalized up-sell offer as well, such as the additional card for the children’s benefit, rather than a one-size-fits-all offer that bears no relationship to the situation. The experience successfully navigates multiple tipping points: For the customer, the experience is one of a company that values the relationship and acts accordingly. For the CSR, it is an interaction that results in a sale – or even two. For the company, it is higher lifetime value and profitability.

But suppose the customer expresses dissatisfaction with the process and indicates she might shop around or complain to a regulator. Predictive and adaptive analytics combined with real-time decisioning are crucial to helping you negotiate this most important tipping point. The ability for adaptive analytics to “learn” during the conversation in order to enhance predictions and adjust recommendations allows you to overcome the negative reaction and manage every interaction to deliver the best response for the particular moment in time. For example, using awareness of the customer’s unhappiness, the planned up-sell offer can be immediately and automatically replaced with a retention strategy. Real-time decisioning adjusts the process to present the CSR with a script that offers a discounted interest rate on the child’s card provided it has a low spending limit and pre-set repayment plans. By instantly adapting the process to respond precisely to the customer’s behavior and needs, the likelihood of retention is maximized.

Providing the Right Response at the Right Time

Intelligently Managing Moments of TruthAcross the Customer Life Cycle

AcquisitionCan we determine a price that takes into account the prospect’s propensities, value and risk?

Customer Service Can CSRs always follow best practices even with the most complex processes?

ClaimsCan we reach a settlement that balances customer need with claims objectives as the call takes place?

RetentionCan we recognize when a policyholder is likely to defect and initiate a “save” strategy during the conversation?

Cross-sell/Up-sell Can we proactively trigger personalized offers during conversations to help agents and CSRs feel comfortable delivering offers more frequently?

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ConclusionWithout question, every conversation you have with a prospect or customer represents a moment of truth. Whether you are helping a prospect choose a product, checking on the status of a service request, making changes to an account or adding more household participants to your bank’s “wallet share”, the manner in which you conduct each conversation can fundamentally alter how your customers value your company and its product and services.

For most banks, there are is core set of customer interactions that occur frequently or which represent high-value interactions, such as product changes or selling a product bundle. As you consider how you can best leverage intelligent conversation management to support your business, look to these frequent, high-impact interactions first. You will gain the greatest benefit — and achieve the fastest ROI — by strategically implementing intelligent conversation management rather than trying to apply it to every single process you use.

Intelligent conversation management can transform your relationship with your customers. Rather than managing interactions as isolated, channel-dependent incidents, intelligent conversation management treats each interaction as part of an interconnected conversation, leveraging understanding of the customer, past interactions and real-time information to predict future interactions and manage each conversation within the overall context of the relationship. With intelligent conversation management, you can successfully navigate through each moment of truth to deliver experiences that enhance the value of your bank to your customer – and the value of your customer to your bank.

About Pegasystems

Pegasystems revolutionizes how leading organizations optimize customer experience and automate operations. Our patented Build for Change® technology empowers business people to create and evolve their critical business systems. Pegasystems is the recognized leader in business process management and is also ranked as a leader in customer relationship management software by leading industry analysts.

© Copyright 2013 Pegasystems Inc. All rights reserved. All trademarks are the property of their respective owners.The information contained in this press release is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release and timing of any features or functionality described remains at the sole discretion of Pegasystems. Pegasystems specifically disclaims any liability with respect to this information.

2013-11