As former New York Mayor Michael Bloomberg once tweeted, “If you can’t measure it, you can’t manage it and you can’t fix it.” Digital executives at banks must understand and gauge the drivers of mobile banking in order to boost engagement. To help executives and their teams accomplish this, Forrester recently built a driver analysis model to identify which factors increase mobile banking app use (as measured by the number of days used and the average duration of a session). This model included two categories of potential drivers: perceptions and behaviors. The full results of this research are detailed in our new report here.
Here are three key takeaways from our research:
Feelings of accomplishment fuel mobile banking use. The degree to which a mobile banking app helps a customer feel positive and accomplished has the largest impact on how often that customer will use mobile banking. This is further evidence that architecting positive emotional experiences is crucial to maintaining an engaged mobile banking audience. At leading providers, digital business execs and their teams will accomplish this, in part, by focusing on bank customers' mobile moments.
Yesterday’s decision by UK citizens to leave the European Union (“Brexit”) brings about short-term uncertainties and unintended consequences that will make it harder for UK businesses to keep customers and attract talent. While times of high-market volatility can tempt firms to panic and cut spending on customer-focused initiatives, now is the time to drive innovation in order to win, serve, and retain customers.
As decisions over the next several years are determined by legislators and driven by compliance, UK companies will be challenged to operate as customer-obsessed firms. Forrester believes that the UK’s decision will have five major implications, including:
Digital and customer-facing talent will migrate out of the UK. Concerns about immigration laws (i.e., who will have the right to stay) will both drive footloose talent to look for jobs abroad and dissuade others from coming. And CIOs will find it even more difficult to recruit already-scarce developers and engineers to build customer-facing systems.
Product and delivery innovation will slow. Companies will now have to spend more time and effort to deliver products across borders and less time innovating on new customer-focused solutions.
Bloomberg recently reported that Snapchat surpassed Twitter in daily active users. Kudos to Snapchat, which is only half as old as Twitter, but why do we keep comparing Snapchat to Twitter? Or to Instagram? The industry is desperate to neatly categorize Snapchat under social media, but I would argue that Snapchat is equal parts messaging app and social network, putting it in a class of its own.
Let's break it down:
Messaging apps are built on the premise of private conversation: 1 to 1 (yes, group chat exists, but it's contained). You send specific messages tailored to the individual recipient. See: WhatsApp, WeChat, Skype, Viber, LINE, Telegram, Kik. With the exception of Asia's sophisticated app hybrids, today's messaging apps are not intended for blanket broadcast messaging.
Traditional social networks are built on the premise of broadcasting: 1 to many. You build up a network of friends (and, in some cases, the general public) and you blanket spam them with your post. See: Facebook, Instagram, Twitter, LinkedIn, Pinterest. While they accommodate private conversation (Facebook Messenger is its own rightful messaging app, Instagram's and Twitter's Direct Message, LinkedIn InMail), it is not their primary foundation.
In a report, Forrester discussed arguments made by Microsoft regarding the potential benefits of the tie-up. There are some additional aspects that I also consider important when discussing the implications of the tie-up:
LinkedIn's status of trusted independent platform for professional information exchange could be undermined. Although the deal, should it go through, would help Microsoft to strengthen its social networking services and professional content, there will be LinkedIn users that are not keen to become sucked into the Microsoft ecosystem as part of their social collaboration activities and abandon LinkedIn as active users.
Microsoft must be much faster to decide on LinkedIn's strategy than it did with Skype. It took Microsoft several years to define its strategy for Skype, and Yammer for that matter. This slow response to sort out Skype's place in the Microsoft family slowed down Skype's momentum significantly. By the time the new Skype strategy was announced, most of the hardcore Skype users had migrated away towards other social collaboration platforms like WhatsApp, Facetime, or WeChat.
Microsoft must redouble its mobile efforts. A large part of LinkedIn users’ activities are mobile based. Microsoft's weak position in mobile ecosystems could dramatically undermine LinkedIn's longer-term opportunities. If Microsoft underestimates the mobile dimension for LinkedIn, the future for LinkedIn could be very questionable. Users are fickle and there is no loyalty to outdated social media platforms.
In 2015, we explored whether customer experience really matters to business success or whether CX is just the latest hype. Our conclusion: superior CX drives superior revenue growth in industries where customers are free to switch business and competitors deliver a differentiated customer experience.
This year we repeated our study to see if the results held true across an additional year of data. To do that we compared five pairs of publicly traded companies where one company in each of the pairs had a significantly higher score than the other in Forrester’s Customer Experience Index during the period 2010 to 2015. Then we gathered financial data from company SEC filings like Forms 10-K and 10-Q.
The tough part was normalizing the results. We focused on isolating revenue that could be traced directly to consumer behavior; we also backed out revenue from mergers and acquisitions, revenue from sale of assets, and other windfalls.
Once we normalized the revenue data we used it to build models that calculated the compound annual growth rates (CAGR) for the ten companies from 2010 to 2015. We found that the CX leaders in all five pairs of companies outperformed their relative CX laggard counterparts.
In two industries, cable and retail, leaders outperformed laggards by 24 percentage and 26 percentage points, respectively. Even in the industry with the smallest spread, airlines, the CX leader enjoyed a healthy 5 percentage point advantage in global revenue. And when we compared the total growth rate of all CX leaders to that of all CX laggards we saw that the leaders collectively had a 14 percentage point advantage.
The race to digital is heating up in financial services (FS) organizations; increasingly, the engine making this happen is Agile. Why? Quite simply, it is software that makes any financial business truly digital. Organizations are therefore in a rush to become great at rapidly innovating, developing, and delivering new software products to win new clients and retain and serve existing ones.
Oliwia Berdak and I have just published twin reports — one for eBusiness and channel strategy professionals, and one for AD&D leaders — that share our findings on how FS organizations are trying to ramp up their digital innovation capabilities rapidly by leveraging Agile and other innovative models.
Our key finding comes in response to a question: Are you building a digital lab that contains great developers but is isolated from key business leaders and other technology management teams? If the answer is yes, don’t! If separate digital units pursue disruptive opportunities, they will often end up with just front-end apps or proofs of concept that are impossible to integrate and scale with same speed they were developed.
Exposed brick is replacing marble at many banks, insurers, and payment firms. Warehouses are deemed a better location for digital labs, digital centers of excellence, innovation labs, and innovation centers. But why are these spaces proliferating from Silicon Valley to Singapore?
A cynic could say it’s a marketing exercise aimed at making the respectable (if a little slow) financial institutions seem more innovative — and more attractive to both customers and developers. But it’s more than that. Frustration and ambition are pushing business executives out from their traditional locations.
Digital labs promise speed by unshackling product and software development from slow business, technology, and compliance processes. They embrace new approaches, such as design thinking, customer centricity, and Agile development. They can drastically cut the time it takes to develop a proof of concept (POC).
But that’s where the dream ends.While these separate digital units aim to be disruptive, they often deliver just front-end apps or proofs of concept that are impossible to integrate and scale. Why? Because software-driven innovation requires a connection to systems of record, rigorous testing, an understanding of security and compliance threats, an analysis of impact on business units and revenue, and someone with the resources to own, love, and keep developing the product — all the things that made digital innovation so slow in the first place. All that labs achieve is to postpone these reality checks.
On Tuesday, Facebook announced new solutions for businesses to drive people to their stores and measure the amount of store visits and in-store sales following their Facebook mobile ad campaigns. Before breaking out the bubbly, let’s break down Facebook’s new measurement capabilities, and evaluate what it means for marketers.
We’re all guilty of falling prey to the lure of social media and losing hours to it. But there’s little doubt that social networking also encourages collaboration, creativity, and productivity – especially if it’s used for work. When Microsoft made history this week by announcing its $26.2 billion acquisition of LinkedIn, Jeff Weiner argued that such a move will allow both companies to realize their “common mission to empower people and organizations.” And empowerment in the workplace is deeply attractive, particularly for the rising generation of employees: Millennials.
Forrester’s Business Technographics® survey data shows that younger employees leverage social networks at least daily because they believe this enhances productivity. At work, employees tune into social networks across devices, but most do so on tablets:
Leading through change requires that right mix of imagination, inspiration, and gritty execution. And we are in a world of change. Empowered customers and the constant and rapid wave of digital innovation are changing market fundamentals. Leaders are now challenged to respond.
I had the pleasure of hosting a discussion with James McQuivey, Carl Doty, and Sam Stern to talk leadership in the age of the customer. Our conversation covered a range of topics from having the wisdom to see the market for what it is versus how we would like the market to act to putting in motion strategic and operational change that is necessary, new, and risky. Here are the five takeaways:
The customer is in motion. Customers rapidly adopt — and rapidly abandon — technologies, services, and brands. That is wonderful and scary thing. It creates new possibilities. But it also redefines the norms for churn where a decision to shift spend is made by a single experience — good or bad. This dynamic can represent a major threat to growth if companies need to absorb 10%+ churn.