Decoding the Customer

In part one of my interview with Capitec Bank’s team, I spoke with Charl Nel and Shaun Ray about the bank’s customer-centric strategy and how they use social media to understand customers. Capitec has clearly been successful. Once the small challenger bank, Capitec continues to acquire customers and now has the second largest customer base among South African retail banks.

My 2017 research collaboration with the opinion mining firm, Brandseye, also shed light on how Capitec is differentiating itself through customer experience. For this research, we mapped social media commentary about the 5 largest banks in South Africa to my “Elements of Customer Experience” model, and Capitec far outperformed the other major banking brands, particularly when it came to living up to their brand promise and providing a value proposition that resonated with customers. In part 2 of my interview, I sat down with Shaun Ray to discuss what the Capitec customer experience team is doing differently.

A tale of simplicity

Capitec rose to prominence by offering just one product: Global One. Customers can use it as a transactional bank, to save and invest as well as, more recently, get a credit card.

This has handsomely paid off: Capitec now has 10-million customers, and continues to acquire 100 000 new customers a month! For comparison’s sake, the other Big 5 banks are Standard Bank (11,6-m), Nedbank (7,4-m), Absa (8,75) and FNB (7,7m).

In part one of my interview, Charl and Shaun emphasise simplicity as their number one motivation. Despite the rapid uptick in technology and new innovations and channels in the finance sector, they concede that they need to evolve with the times to remain relevant.  Despite this, they will always keep it simple and engage the customer around their needs and in a language they understand – technology agnostic.

No delusions of grandeur

Despite widespread customer and non-customer support, Capitec isn’t resting on its laurels. They acknowledge that there is a lot of innovation happening in the banking industry and plenty of new communication channels are available for customers to engage with. This keeps the team on their toes as they know if they ever claim that “they’re arrived” it could be their death knell. They instead say, “we have never arrived”.

This humble attitude feeds through from the frontline all the way to the CEO. Everyone understands what the role of the customer is and believes understanding them, and meeting their needs is the bank’s no.1 priority. The CEO, Gerrie Fourie, even went so far as to say publicly at their recent AGM, that the customer always comes first at Capitec.

Shaun doesn’t shy away from the importance of customer centric culture. The CX team can’t be everywhere at once, and the last thing the CX team want is to become a bottleneck for customer experience innovation. Capitec has rather focused on empowering the entire organization to create and deliver great experiences.

The team also leverages technology and data to create personalized communication and identify where there are hurdles in the customer journey. Shaun highlighted the potential of AI and big data analytics, but also warned that these insights are only as good as how they are put to work.

For a Customer Experience Professional, this is music to my ears. But what I particularly like about Capitec is their willingness to accept that they don’t know it all, that their customers will teach them a thing or two and that they need to remain agile in an ever-evolving market. While they are considered the darling of the banking industry, it is an accolade that needs to be treated carefully, and respectfully. This can be done by listening to the customer and designing products and processes around their needs, not the banks.

Decoding the Customer is a customer experience podcast created and produced by Julia Ahlfeldt, CCXP. Julia is a customer experience strategist, speaker and business advisor. She is one of Southern Africa’s foremost experts in Customer Experience Management. To see Julia’s banking industry research collaboration with Brandseye, click here. For more information about Julia’s services including her customer experience analysis methodologies, click here. To hear other episodes of Decoding the Customer, click here.

Firstly, for those who are not familiar with Capitec, it is truly a major success story for a South African Bank. Now 18 years old, Capitec’s primary vision was, and still is, to simplify banking for customers at a time when the financial services industry was renowned for its complexity and lack of transparency.

How did they do it?

For Capitec, the customer really does come first. By using a range of digital tracking tools and formal research projects, they understand what the customer likes, and what their pain points are, many in real-time. These are addressed as soon as possible, and communicated to customers.

They also deliver on their promises. Charl underpins how important it is to live up to what the bank says it will do, as customers can become underwhelmed quickly or disappointed when what they thought would happen – as promoted through advertising or on social media etc. – didn’t.

Talking of social media, customer comments are rife. While it is increasingly being used as a customer service channel, among this are genuine conversations customers have with other customers or a competitor banks’ customers. For instance a competitor’s customer disses their bank and a Capitec customer will pipe up to say they need to switch to Capitec. That is excellent brand advocacy happening all on its own.

It’s clear that Capitec has been doing something different, but this is easier said than done. Check out part 2 of my interview with Capitec, where I sat down with Shaun Ray to dive into how Capitec’s customer experience team is embedding customer-centricity across the business.

Decoding the Customer is a customer experience podcast created and produced by Julia Ahlfeldt, CCXP. Julia is a customer experience strategist, speaker and business advisor. She is one of Southern Africa’s foremost experts in Customer Experience Management. To see Julia’s banking industry research collaboration with Brandseye, click here. For more information about Julia’s services including her customer experience analysis methodologies, click here. To hear other episodes of Decoding the Customer, click here.

While the term CX was first coined in 1998, it’s only really taken off in the past 15 years. This is in large part thanks to the massive technical boom that fundamentally changed everything in the early 2000s. Many businesses born before this time now battle to stay relevant, while newcomers nip at their heels, taking their slice of pie from right under their noses. While certainly a cliché, the world of informed and connected consumers really did change how and why we do business today. This is the essence of why customer experience matters.

My conversation with Ian Golding, author of the book “Customer What?” takes a deep dive into CX, highlighting how effective it can be for businesses that get it right, and how ineffective it can be for those who don’t.

His book loosely tackles CX in four parts, each equal in importance and practice:

It’s not easy. Especially when a business has yet to buy into having a CX strategy in the first place.

Ian’s advice, and on-the-job observations, is that CX needs an advocate within the business, even if a formalized customer experience role has yet to exist. Often these customer advocates will forge the way for the creation of the centralized customer experience function within their organization. For those who are interested in customer experience, but don’t see a clear career path, Ian advises looking for opportunities to get involved and elevate the topic of customer experience from your current role.

So how do CX practitioners (or avid customer advocates) make a meaningful argument to the C-Suite that focus on why customer experience is needed, especially when there is a strong demand from shareholders to perform: through the numbers! There is a strong case of the long-term benefit of a focus on customer experience, but CX initiatives bet on the “long game” of profit contribution through improved customer loyalty and retention. This isn’t something that happens overnight, CX efforts may not yield ROI within the short-term horizon of quarterly earnings cycles. To overcome this Ian suggests developing an engagement plan that allows leadership to understand the importance of dialogue and also articulate the message to shareholders that ultimately will benefit them (from the business) in the medium to long term.

Ian considers Amazon’s Jeff Bezos as an excellent example. For years, Amazon didn’t make a profit because Bezos was obsessed with reinvesting everything Amazon did to improve the customer experience. His shareholders didn’t like him much at the start, in fact they hated him! But now they are reaping the benefit and will continue to do so in the long term. A major win for CX and a major win for Amazon.

Besides these key take-aways on helping executives engage with shareholders, Ian and I also spoke about the role of the Customer experience Professionals’ Association (CXPA) as a unifying force within the growing CX community. Ian and I are both active members of the CXPA, and Ian spoke about how this member-run non-profit industry body is helping pave the pathway for the future of our profession.  The CXPA both regulates performance and best practice but also provides a community of sharing and learning. Watch this space.

Ian Golding

During our conversation, Ian and I discussed several resources for anyone who is interested in learning more about customer experience. Here is our reading list:

Fellow CX practitioner Ricardo Saltz Gulko has also curated reading list an excellent reading list of his top 30 CX books.

To learn more about Ian’s work, check out his website, LinkedIn, or get in touch with him on Twitter.

Decoding the Customer is a series of customer experience podcasts created and produced by Julia Ahlfeldt, CCXP. Julia is a customer experience strategist, speaker and business advisor. She is a global expert in Customer Experience Management. For more information about how Julia can help your business realize customer-centric change through her CX consulting services, click here. To hear other episodes of this CX podcast, click here.