Combatting Inflation in Customer Communications with a Better Customer Experience
How to reduce print and postage costs with postal optimisation, improve operational efficiencies with digital and offer an excellent customer experience at the same time.
Increasing inflation means all kinds of businesses face challenges in managing their customer communications costs, but the pressure is on for financial services institutions in particular.
These days, financial services companies need to drive excellent customer experience not only to avoid loss of business, but also to stay within Consumer Duty guidelines. In what is a highly sensitive area for many people – their money.
Good CX requires good communication, which is why banks, insurers, pension funds and building societies with large customer bases have to manage large volumes of customer communications every day. That’s not going to change, but the costs are still increasing. Rising expenditure in house and in the supply chain have had a significant impact on multiple aspects of physical and digital customer communications operations, including printing, postage, delivery, contact centre costs and back office processing.
By strategically addressing inefficiencies with the following three key approaches, organisations can maintain a sustainable and cost-effective customer communications operation.
- Reducing the costs associated with paper based communication with postage optimisation – unlocking discounts with delivery partners like Royal Mail, and selecting print and mail suppliers who can keep ahead of price rises.
- Digitising inefficient customer communications journeys, reducing reliance on paper-based materials and minimising postal and delivery expenses. By implementing accessible online platforms, electronic versions of formal documents and email and SMS channels, they can successfully promote more efficient and cost-effective interactions with customers.
- Employing the first two approaches in an integrated multichannel strategy, offering channel choice to customers while introducing those channels at the right moment of the customer journey. Ultimately, avoiding loss of customers by adhering to Consumer Duty principles and driving better outcomes for customers – i.e. balancing cost reduction with maintaining an outstanding customer experience.
This article will run through the most effective ways to not only improve operational efficiencies but simultaneously improve customer experience.
1. Postal audits
While the world is reducing paper usage, it is not going away completely; and for good reason. It is a highly effective form of communication. According to Marketreach data, physical mail is 49% more memorable than email and 35% more memorable than social media. It is also 33% more engaging than email and 35% more than social media, while 34% of all addressed Customer Mail (the Royal Mail term for business mail sent to customers they already have a relationship with) leads to a commercial action such as a purchase or sales enquiry.
So, the answer is to optimise rather than to eradicate. How can organisations make the best out of the physical communications they still need to offer customers?
A postal audit is an essential step in identifying opportunities for cost reduction in your customer communications. This process involves reviewing your current mailing practices, evaluating the effectiveness of mailroom operations, and identifying areas where you can unlock postage discounts and enhanced efficiencies. By conducting a thorough audit, financial institutions can uncover hidden savings and improve their bottom line.
Understanding whether you can quickly and effectively resume operations following a disruptive event is also key. Planning and implementing business continuity and disaster recovery strategies can involve establishing backup systems, testing response plans or even investing in redundancies to help reduce the impact of service disruptions.
2. Integrating print and digital journeys
Taking a ‘phygital’ approach and offering channel choice is crucial for controlling postage costs and improving operational efficiencies. Financial services organisations that adopt a multi-channel approach, utilising both traditional mail and digital platforms, can drive better outcomes for customers and save money at the same time.
One simple step to reduce paper is to encourage customers to opt for paperless options, such as electronic statements, which can significantly reduce postage expenses.
But sometimes physical mail is a better option, especially at the beginning of a relationship with a new customer.
For example, it’s proven that sending a new customer an onboarding pack in the mail that then drives them to a digital platform to fill in a form has better engagement. The printed communication is more effective at driving a response, while the digital form is more convenient, cheaper, quicker and less prone to errors than handwritten paper forms.
When it’s not possible or even desired to eliminate printed communications completely, it’s time to examine the customer journey and digitise in a considered way. Think about starting a project to identify points along the customer journey where paper is causing a poor experience and/or driving up costs, and then only digitise those sections of the journey.
3. Optimising outbound mail costs with Hybrid Mail
Hybrid mail is excellent for minimising outbound postage costs, especially in organisations with remote or hybrid working teams. This approach combines the benefits of both printed and electronic communication by installing a print driver on employee devices enabling them to send physical mail items directly from a digital platform. And because hybrid mail can also send out emails and SMS within the same platform, it ensures there is a single view of the customer relationship.
With hybrid mail, financial institutions can streamline their mailing processes, saving time and resources while maintaining a professional appearance. It’s a cost-effective method that enables organisations to maintain customer engagement while reducing their postage expenditure.
4. Improving inbound mail processing with Digital Mailroom
The integration of a digital mailroom into customer communications management can lead to significant reductions in costs and enhanced efficiency. A digital mailroom enables the automation of mail processing, sorting and distribution, while streamlining workflows, saving on costs and human error by reducing manual handling.
By digitising incoming mail, businesses can ensure vital correspondence is delivered to the appropriate recipient in a timely manner. An optimised process that reduces the risk of errors and delays, improving overall customer satisfaction.
The use of advanced data capture technologies extracts key information from documents, which can then be integrated into customer relationship management (CRM) systems. The result is a consistent and complete data set that can be analysed to identify trends and optimise customer engagement strategies.
In addition, digital mailrooms can reduce physical storage requirements and associated real estate costs. Digitised documents are easier to manage, search and retrieve, increasing operational efficiency and providing long-term financial benefits.
Embracing a digital mailroom approach not only contributes to cost mitigation within customer communications, but it also supports sustainability goals by reducing waste from paper overconsumption with the flexibility to receive and process electronic mail. This environmentally friendly advantage can serve as a valuable competitive differentiator for financial services companies looking to enhance their reputation and customer trust. Overall, a digital mailroom offers a sound investment for financial services providers who want to improve customer communications while simultaneously reducing operational expenses.
4. Providing excellent digital experiences
One of the most effective methods to optimise operational efficiencies in financial services customer communications is by digitising customer journeys. Earlier we discussed the paper form, a more inefficient process, causing potential delays and an inferior customer experience.
In our experience, digitising this aspect of a customer journey with e-forms has increased the response rate to initial communications by more than 50%. We’ve also found that customers have chosen to use a digital form (when presented with the option) more than 90% of the time.
But simply digitising the right moments in a customer journey is not always enough. Today’s customer has been conditioned to expect an excellent and seamless digital experience. User experience and user interface design has to be good enough to help the customer feel that they are enjoying a seamless experience no matter where they are in the journey. When 90% of consumers stop using an app if it performs poorly, if a touchpoint looks and feels different to the rest of the brand, the interface is clunky, or the flow is over complicated, a business might not receive the benefits promised by digitisation.
For excellent digital customer experiences, a business should only demand the minimum level of customer data to progress a journey, keep functionality as simple as possible, and use good UX design to communicate to customers how far along they are in a journey.
5. Contact centre cost reduction
Lastly, cost mitigation in customer communications can be achieved by performing a contact centre cost analysis. Costs incurred by the contact centre could include ineffectiveness of call-routing strategies, inefficiency of staffing levels and reviewing the use of self-service options for customers.
Simple changes such as digitised forms reduce human error; for example, by disallowing form submission until all fields are filled correctly, and by removing the need for calls into the contact centre.
Digitised forms have been known to reduce calls into the contact centre by 50% and mitigate call centre and inbound mail costs by 30-40%. They also reduce the time taken for a customer to complete a journey from days or weeks to minutes, further improving customer satisfaction and retention.
6. Reducing friction
Providing seamless experiences along the customer journey is all about removing friction. At every touchpoint companies should query how hard they are making it for their customers to get what they need.
Removing friction can be done by offering multiple channels for customers to progress a journey, and by considering the UX of the process.
For example, offering a link to a digital customer portal instead of a lengthy post conversation with multiple stages and demands on the customer’s time. In terms of UX, only asking for the minimum amount of data to progress a transaction provides a quicker, more efficient and more sustainable interaction.
Small steps to a multichannel approach
Reducing costs by improving customer journeys with new technologies and implementing a more intelligent use of printed communications is not as intensive a change as it might sound.
Digital transformation means a lot of things to many people. To some it means changing to email, others it means going paperless for statements and others it means installing digital platforms and self-serve customer portals.
The key is to understand the customer experience first, and then only digitise what is necessary to make their lives easier. And the best way to start is to map out the customer journey.