Technology drove the first client experience (CX) revolution when advances in computer processing power allowed pioneers such as Tesco to develop data driven marketing policies. And technology advances have only accelerated, delivering standards of connectivity and user experience unthinkable even 10 years ago.  The ability to track and capture all aspects of interactions through online channels has transposed loyalty cards as the new tool for getting real data on all users, whether they are existing clients or not.  Big data sets and sophisticated analytics offer customised portals and user experiences.  Marketing art has become business science and this has led to a focus on digital-enabled features and ease of functionality.  But in the rush to develop their multi-channel technological capabilities, firms run the risk of losing sight of the need to maintain emotional engagement with their clients.  As most of the client experience migrates to a digital channel, emotional engagement becomes more critical because:

• Emotional experience (EX) drives more than half of the typical client experience and without an EX strategy, firms cannot control the client experience.
• A well-designed customer experience triggers emotions that have a positive effect on customer retention and customer loyalty, leading to significant increases in customer lifetime value.
• An emotionally engaging experience will function as a key differentiator in an otherwise undifferentiated financial services landscape.

So what are the drivers of emotional experience?  As we know from studies of communication, a message can be broken down into verbal (words), vocal elements (tone) and non-verbal elements (posture, expression, etc).  We consciously listen to the words but our brains take in the whole picture.  Similarly for online channels, emotions go beyond functionality to generate feelings of pleasure and meaning.  Broadly speaking, we connect at three levels – aware, automatic and unaware. In the digitally delivered financial services world this can be illustrated as follows:

Not surprisingly, the strongest drivers of value are at the subconscious level where customers connect their deepest motivations, values and aspirations to a brand.  How do financial institutions create this connection?  By simplifying complexity and helping customers achieve personal values such as social acceptance or attaining independence.

Loyalty is an emotion and this means the relationship needs to be reciprocal, not transactional.  Hence, traditional loyalty programmes are increasingly ineffective at driving revenue increases – there is no EX connection. Instead, we are loyal to the companies who show us they understand us through the products they offer and the customer experiences they create.

In summary:

•   EX drives CX – emotions connect the customer to the company
• CX drives engagement and loyalty – reliability and personalisation are considered standard
• Loyalty drives growth – loyalty changes customer behaviour and orientates preferences towards the company

It seems we have come a long way since the Tesco Clubcard, so it’s fitting to go back to Terry Leahy who, when asked what he had learned from his data-driven policy, replied: “I learned the value of creating and reinforcing loyal behaviour”.