In 2015, Finastra (at the time, called Misys)—a global banking software firm based in London—decided to pursue a compelling opportunity: to expand its business within its client banks. The firm seemed quite prosperous, with a client list that included 46 of the 50 largest banks in the world. But it’s penetration into many of these banks was nominal.
“On average, we could be doing business with 500 people in our client banks,” says its chief marketing officer, Martin Haering. “But we actually had sales relationships with only 50, and marketing relationships with another 50. The remaining 400 represented our biggest opportunity for growth.” A financial analysis confirmed that 95 percent of the firm’s growth potential lay in expanding its footprint in existing client banks (sales and marketing were focused far too much on new customer acquisition).
What makes the Finastra CX transformation remarkable is that it focused on achieving specific business objectives.
Meanwhile, customer retention was a growing problem to the point where the C-suite was unaware of a number of important customer relationships that were deteriorating—sometimes despite high net promoter scores! In addition, a troubling number of upsell and cross-sell opportunities had been lost due to lack of referenceable customers.
This called for significant changes to the firm’s customer experience (CX). What makes Finastra’s initiative unusual is that it focused its CX transformation on achieving specific business objectives.
The business objectives:
Finastra’s senior leadership grounded the change initiative in two compelling business objectives. One was improving retention by improving the customer experience, particularly for its highest potential customers (more on them below). So CEO Nadeem Syed and CMO Martin Haering and decided to improve all of the stages post-sale.
Second was establishing a more effective “land and expand” strategy for winning the business of the “other 400” non-customers among the firm’s Tier 1 and Tier 2 client banks. The firm would do so by cultivating what might be called “gateway” Finastra customers within the target banks. These would be selected for their potential to achieve noteworthy success, their level of influence within their banks, and their interest in communicating their success to their banks and to the industry at large by providing referrals, references and other forms of advocacy.
The high potential gateway customers would be invited to participate in an extraordinary initiative called Finastra Connect.
Focusing on what customers value:
And like the firms mentioned above, Haering and Chris Adlard, his senior manager of global customer engagement, were systematic in making sure that Finastra’s Total Customer Experience (TCE) ops:
- Understood what customers valued at each stage of the customer journey,
- Took responsibility for delivering it, and a
- Accepted customer-value KPIs as determined by customers through surveys.
Let that marinate for a moment. Finastra’s leadership was taking on the fundamental misalignment between the firm’s TCE ops—which are measured primarily on meeting business objectives such as leads generated, sales cycle times, and maintaining profit margins—and what customers actually value, which is of course much different. This is a particularly daunting initiative to take in a complex marketing and sales environment like Finastra’s. Net Promoter Score—perhaps the most widely used loyalty measure, can’t come close to achieving this. In fact, Finastra had been using NPS scoring regularly, but it’s executives were still often surprised by clients who had high NPS scores but were actually royally ticked off!
Finastra’s team, under Haering’s direction and led by Adlard, worked closely with high potential customers to learn in depth what they valued at each stage of the customer journey. They managed to distill this down to one criterion for each stage of the journey (below). These needs were then translated into key performance indicators (KPIs) that the firm would hold itself accountable for.
To get TCE ops to agree, Adlard and the individual TCE ops leaders (in engineering, product management, professional services, support services and account managers, along with marketing and sales) did the hard work of negotiating how to allocate responsibility among TCE ops that overlap when it came to meeting customer needs. For example, if a customer is having problems with implementation, professional services typically blame the product people, and vice versa. These predictable issues were, sometimes painfully, negotiated away.
1The operations that directly impact the customer experience, such as marketing, sales, services, product development, support and the like.
Co-creating the solution
Haering and Adlard’s team also addressed the question of how much of the Finastra Connect’s premium services would come from the internal TCE Ops and how much would be co-created with Finastra’s customers. The answers emerged from conversations with the sorts of gateway customers they wanted to attract into the program. For example, one customer need KPI overtly rated the access they got to peers in the firm’s customer advisory boards or customer communities (see chart, above). Another customer KPI was how well Finastra accepted their input on Finastra solutions—which of course, comes from engaging other customer on the customer advisory board or customer community. Another KPI asks, does Finastra “’get’ and support our success.” Key to that is not just premium access to Finastra’s internal or partner experts, but also to relevant, successful Finastra customers.
Below is a graphic showing the 10 premium offerings in Finastra Connect. Note that four of the 10 overtly involve engaging with customers–participation on Customer Advisory Board, Online Communities, User Groups, and in Peer-to-Peer Dialogue (which includes other interactions ranging from informal Finastra events for customers, to industry forums and the like). A fifth premium offering—Industry Reputation—is a particularly enticing way to invite customers to advocate. It’s not about promoting Finastra’s brand overtly, it’s about building the customer’s professional reputation by talking about his or her success. And this too includes interacting with Finastra’s customers and prospects.
So roughly 50 percent of the FC premium offerings are, in effect, engaging FC customers with other, high level Finastra customers and/or prospects.
Finastra began rolling out its solution in 2015. The first goal of restoring customer retention rates above 90% was quickly met—the most recent report shows that they’re at 94%. The goal of expanding Finastra’s footp
rint in Tier 1 and 2 banks has also led to solid results. In the last 18 months, Finastra has closed multiple $10M+ contracts with large global and regional banks. (Results to be updated).