1 “the total client experience” prepared for: the securities transfer association prepared by:...

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““The Total Client Experience”The Total Client Experience”

Prepared for:

The Securities Transfer Association

Prepared by:

David Driskill

David Driskill Associates

National Quality Review© 2006 David Driskill

Service

Meeting Meeting and exceedingand exceeding the the expectations of everyone in the expectations of everyone in the service equationservice equation

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Presentation MapPresentation Map

• Working definition of a “client”Working definition of a “client”

• The Core Conditions: What all Clients WantThe Core Conditions: What all Clients Want

• Minimum Expectations (x Client Type) and Minimum Expectations (x Client Type) and Selected Benchmark Data For Each ConditionSelected Benchmark Data For Each Condition

• A PrescriptionA Prescription

• What’s Up Ahead?

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Key Caveat/Limit: This is all about service, not cost of service or investment performance

Service cost is driven by market forces and will only drive satisfaction when outside normal range or in relation to other service attributes

Value of stock can eclipse all other forces, but seldom does so over the strategic long-term

Normative Range

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What defines a client?What defines a client?

A client is anyone in a A client is anyone in a position to feel satisfied or position to feel satisfied or dissatisfied about what you dissatisfied about what you do. And they are able to act do. And they are able to act

on the basis of their on the basis of their satisfaction or dissatisfactionsatisfaction or dissatisfaction

A completely inclusive definition of a client is both real and vital in an environment in which so many interdependencies exist.

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The Core Conditions:The Core Conditions:What All Clients WantWhat All Clients Want

AccuracyTimelinessRisk ManagementAccess Utility

Problem RecoveryResponsivenessNew Means of Access New Use of service

Dissatisfiers SatisfiersA “Satisfier” is a function in which

continuous improvement has a high probability of increased and sustainable

client satisfaction.

A “Dissatisfier” is a function in which perfect service is required but won’t

improve satisfaction and any problem can engender dissatisfaction.

Must at least compare favorably to market norms.

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All Clients want their All Clients want their service provider to service provider to deliver deliver accuracy and accuracy and timelinesstimeliness

1 + 1 = 1 + 1 = 22

Accuracy and timeliness are DissatisfiersDissatisfiers

Perfect accuracy & timeliness will not increase satisfaction, but errors or being late will produce dissatisfaction.

What Clients WantWhat Clients Want

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Accuracy/Timeliness - Client Expectations

Clients Sample Minimum Expectations

Issuers At or above norms (experiential and industry) – e.g., transaction processed accurate/timely.

Wealthy Individuals

Perfect Accuracy and Timeliness – e.g., of Statements, mechanics of portfolio, etc.

Brokers At or above norms (experiential and industry)

Investor Accuracy and Timeliness within some boundary – e.g., statements within a time span, financial transaction accuracy at 100%, non-financial some tolerance, etc.

Employees/Colleagues

At or around norms (experiential and industry) and company promises met (around employment practices/working conditions)

Business Partners

At or around norms (experiential and industry) agreed to obligations met (around contract/ SLA)

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Accuracy/TimelinessSelected Benchmark DataSelected Benchmark Data

• 1993 – 2003 overall manual transaction processing accuracy rates have dropped from high 90s to low 90s1 Best in Class stable in the high 90s

• 1993 – 2003 overall manual financial processing timeliness rates have dropped from mid 90s to low 90s. Best in Class has risen - mid to high 90s

• Approximately 40% of errors in manual financial transaction processing are the result of typos/keystroke errors. 2

• For many clients and many events timeliness is a subjective perception of duration between expected delivery versus actual delivery. The more accurate the expectation set, the closer client perception conforms with actual “clock time.” (In process follow-up or failure has a profound effect.)

1 One Reason: As more transactions are handled via automation, what we are left with are increasingly complex.

2 N = 500,000 (+) transactions reviewed 1993 through 2003.

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All Clients want their All Clients want their service provider to service provider to Manage RiskManage Risk

Risk Management is typically a DissatisfierDissatisfierPerfect risk management will not increase satisfaction – unless many clients have risk

problems that yours do not – but negative consequences and especially negative surprises will drive extreme dissatisfaction

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Risk Management – Client Expectations


Issuers Risk/compliance targets explained/met/addressed, robust business continuity, quick reporting of exposure, 100% ethical conduct & complete confidentiality

Wealthy Individuals

Risk expectation explained/met, quick reconciliation, 100% ethical conduct & complete confidentiality

Brokers Quick reconciliation, 100% ethical conduct & complete confidentiality

Investor Risk explained/met, 100% ethical conduct & complete confidentiality


Well defined risk management procedures, and company support/coverage for individuals (indemnification)

Business Partners

Applicable risk knowledge/understanding, mutual risk targets met/addressed, robust business continuity, coordination, quick reporting of exposure, 100% ethical conduct & complete confidentiality

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Risk Management Selected Benchmark DataSelected Benchmark Data

• Ethical conduct – and the reports of the lack of ethical conduct – is a new fixture in the service landscape

• When risk is explained – well and repeatedly - downside results can be experienced as less severe

• Clients see transparency/process predictability (easy access to supporting data, full disclosure of underlying process, etc) as a lynchpin to risk management1

• In the global market, local knowledge and trading expertise is viewed as a critical component to risk management/reduction

1 The spirit, if not the reality, of the Sarbanes-Oxley Act is congruent with the principles of transparency and thus risk management

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All Clients want their All Clients want their service provider to service provider to aggressivelyaggressively recoverrecover from errors from errors or other problemsor other problems

Problem Recovery is a Satisfier & Dissatisfier

Ongoing improvement in this function has a high probability of positively impacting client satisfaction, but some clients (wealthy individuals, Issuers) enter relationship

with higher expectations and problem repetition is dissatisfier.


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Problem Recovery – Client Expectations


Issuers Acknowledge & fix error, take responsibility, personal contact, clear/reasonable plan for future prevention and no re-occurrence/pattern

Wealthy Individuals

Personal accountability and apology, empathic response and no re-occurrence/pattern (prime tickets to an event don’t hurt, after recovery)

Brokers Fix the error, personal contact and no re-occurrence/pattern

Investor Essential responsiveness, fix the error, and no re-occurrence/pattern


Acknowledge & fix error, take responsibility, personal contact and no re-occurrence/pattern

Business Partners

Acknowledge & fix error, take responsibility, personal contact/coordination, clear/reasonable plan for future prevention and no re-occurrence/pattern

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Problem Recovery Selected Benchmark DataSelected Benchmark Data

• Since 1994 survey researchSince 1994 survey research11 has shown Problem Recovery to be a “predictor” has shown Problem Recovery to be a “predictor” of overall satisfaction among Brokers.of overall satisfaction among Brokers.

• Among shareholders (large and small) overall satisfaction Among shareholders (large and small) overall satisfaction cancan go up after a go up after a problem - problem - based on how the problem is handledbased on how the problem is handled

• During problem recovery shareholders, Brokers and issuers prefer dealing During problem recovery shareholders, Brokers and issuers prefer dealing with a person that; with a person that; firstfirst, demonstrates and understanding of their situation , demonstrates and understanding of their situation and, and, secondsecond, can act affirmatively, quickly and with commitment on their , can act affirmatively, quickly and with commitment on their behalf (versus web/VRU access)behalf (versus web/VRU access)

• Time becomes “elastic” during problem recovery. The more critical/risk Time becomes “elastic” during problem recovery. The more critical/risk related the problem the more time needs to be managed during recoveryrelated the problem the more time needs to be managed during recovery

• Post problem, the next concern of the client will often be, “What will you do to Post problem, the next concern of the client will often be, “What will you do to prevent this error/risk from occurring again?”prevent this error/risk from occurring again?”

11N = 12000 +N = 12000 +

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All All ClientsClients want want the service the service provider to be provider to be responsiveresponsive..

Responsiveness is a Satisfier

Ongoing improvement in responsiveness has a high probability of positively

impacting client satisfaction.

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Responsiveness – Client Expectations


Issuers Points of contact have competence/authority to act, at least normatively good communication skills, and give status updates (“Let me know what’s going on”)

Wealthy Individuals

Single point of contact, superior communication skills and able to speak for the firm/Service Provider(s) and status updates (“Let me know what’s going on, in process”)

Brokers Fast, competent contact, with uniform track record of credibility

Investor Rapid access to good CSR skills (perceptions are anchored to norms)


Personable/skilled management (practices) credible feedback and generally fair treatment – and enabled to act affirmatively for clients

Business Partners

Rapid response to joint issues, points of contact have at least normatively good communication skills & competence/authority to act and status updates

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ResponsivenessResponsiveness Selected Benchmark DataSelected Benchmark Data

• Different client segments define responsiveness differently. Wealthy Different client segments define responsiveness differently. Wealthy individuals expect their provider to “walk their dog.” Brokers may define it individuals expect their provider to “walk their dog.” Brokers may define it as speed and competence. Issuers might define responsiveness as as speed and competence. Issuers might define responsiveness as flexibility, being “proactive” and customized/ customizable reporting.flexibility, being “proactive” and customized/ customizable reporting.

• Issuers and Brokers have several “defining moments” (e.g. per year) in Issuers and Brokers have several “defining moments” (e.g. per year) in which there is a problem or special need. Wealthy individuals and which there is a problem or special need. Wealthy individuals and shareholders have “traumatic events” like a death, a move or the like. How shareholders have “traumatic events” like a death, a move or the like. How the provider responds creates a lasting relationship definition. the provider responds creates a lasting relationship definition.

• For shareholders, Brokers and issuers For shareholders, Brokers and issuers “Responsiveness”“Responsiveness” of client service of client service staff and their managers is a statistical predictor of overall client satisfaction staff and their managers is a statistical predictor of overall client satisfaction – – particularly during problem recoveryparticularly during problem recovery..

• Even though responsiveness is often characterized (wrongly) as a “soft skill” Even though responsiveness is often characterized (wrongly) as a “soft skill” it can have all of the consequences for a client of product, process and it can have all of the consequences for a client of product, process and technology attributes. There is ample anecdotal and empirical evidence that technology attributes. There is ample anecdotal and empirical evidence that responsiveness can be taught, learned and appliedresponsiveness can be taught, learned and applied

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All Clients want All Clients want Access & UtilityAccess & Utility

Access and Utility can be either Satisfiers or Dissatisfiers

New ways to access the provider and new/more useful output can produce increases in satisfaction, but, over time, they become dissatisfiers as the market

place normalizes

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Access/Utility – Client Expectations


Issuers IT interoperability, research, data access via web, reporting flexibility and usefulness

Wealthy Individuals

Access and utility fully customized or from extensive menu, with access to single point of contact - and good research

Investor Rapid access to good CSR skills (perceptions are anchored to norms)


Access and usefulness of the tools, training and information to do the job

Business Partners

A true collaborative relationship, IT interoperability, data access via web, ease of use, training in use of systems, reporting flexibility and usefulness

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Access/UtilityAccess/Utility Selected Benchmark DataSelected Benchmark Data

• Issuers have sharply rising expectations with regard to web access and utility of information and data. They want to be able to extract information the way they want, when they want and how they want. They also want interoperability – all of the service applications have to interact

• When problems or complex questions arise (from the perspective of the shareholder, broker or issuer) there is still a very strong preference for access to a “live” service provider/expert**

**Marshal Mcluhan’s predictive axiom about “high tech – high touch” appears to be true. The value and importance of personalized service (high touch) in a high tech environment is significant.

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A Prescription

‘Manufacture’ non–value added tasks/ transactions via automation and low process variation

Outsource (onshore, near-shore & offshore) BUT master the process first

Ensure that jobs locally and outsourced are ‘satisfying’ to prevent loss of knowledge capital

Ensure that your client contact and relationship management personnel have ‘world-class’ listening skills, an obsession with timeliness, and deep process knowledge

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What’s up ahead?What’s up ahead?

• Ethical conduct become a routine aspect of risk management

• Increased demand for access customization

• Increased pressures on service providers to “commoditize/ manufacture” and deliver more personalized service

• Increased pressure on cost, lower fees with no loss in service

• Increased demand for service providers to do special projects

• Increased demand for global providers to deliver local expertise

• Frequency of error may go down while severity may go up

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As the global market place becomes “the” market place and our work process and

technology become more capable of handling the routine, interpersonal communication, decision making, planning and execution

becomes more important, complex and demanding.

The “High-Tech/High-Touch” service culture is fully realized

1 “the total client experience” prepared for: the securities transfer association prepared by:...

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