"Most businesses today need a dramatic digital transformation in order to continue to be successful.” -Howard Tiersky
Even the world’s most beloved brands are at risk of extinction if they don’t evolve. Traditional financial brands face enormous challenges from the digital world, yet too many of them are still stuck in the old way of thinking, “That’s how we’ve always done things.”
James Robert Lay discussed sparking dramatic digital transformation with one of the nation’s bestselling authors and CX influencers, Howard Tiersky. Howard is the CEO at FROM, The Digital Transformation Agency, and is also the author of the book, “Winning Digital Customers: The Antidote to Irrelevance.”
The Harsh Truth: You Might Be Irrelevant
If your financial brand isn’t making dramatic digital changes right now, you’re at risk of being left behind in a fast-paced digital landscape. Take it from Howard Tiersky, one of the world’s customer experience thought leaders and one of Enterprise Management 360’s top 10 digital transformation influencers.
Howard wrote the book on digital transformation. It’s called “Winning Digital Customers,” and it’s the book’s subtitle that should get your attention: “The Antidote to Irrelevance.”
Many financial brands are teetering on the edge of irrelevance. Customers are waking up to the vast wealth of new digital banking options, and they’re looking right past the old brands that are afraid to innovate.
Howard spent almost 25 years working with large brands on various types of transformation projects. The overarching question was always, “How do you take a great legacy brand and keep it relevant for a rapidly-changing world?”
Today, there’s nothing changing faster than the digital landscape. With just a few taps, customers can switch brands and leave a longstanding brand relationship behind forever. This creates a sense of desperation for companies that aren’t finding runaway success in the digital space.
What’s the #1 secret to digital transformation?
Howard says there’s no single right answer, but he’s certainly seen plenty of wrong answers.
For example, one wrong answer would be, “Move slowly.” Howard has seen companies go out of business or suffer tremendously because they just couldn’t move fast enough to accomplish meaningful change.
What Toys "R" Us Can Teach Financial Brands
One of the ultimate lessons in brand irrelevance comes in the form of Toys “R” Us, a case study Howard covers in his book. Toys “R” Us used to be one of those wildly successful brands with a powerful connection to childhood. It was “where a kid could be a kid.”
Howard explains that although people blame companies like Amazon for making Toys “R” Us irrelevant, the company had much deeper customer experience problems. For example, their commercials showed kids running through the toy store aisles, playing with toys, and having a fantastic time. Sounds fun, right?
In actuality, many of their last brick-and-mortar stores had strict policies against opening boxes. If a child wanted to open a box and see a toy up-close, it was forbidden. Where’s the fun in that? Not only was Toys “R” Us losing the battle to companies like Amazon, but they were also losing the battle to every other experience that was more fun.
Today’s kids have lost their excitement for in-store shopping. They connect more with the excitement of opening up a mysterious box that was left on their doorstep. The Amazon delivery driver is the new ice cream truck!
Financial brands can learn from this lesson. They’re no longer special, and having a brick-and-mortar business doesn’t make them better. The internet has created almost endless opportunities for customers to comparison-shop and find new experiences. If they don’t like you, they’ll move on quickly to one of your more enjoyable competitors.
The Stages of Digital Evolution
In the era of the internet, the world has moved through three stages of access to information and communication. During the earliest days, we were still in the time of “brochureware,” when the internet was full of one-sided pages that simply broadcast facts. Just providing information was good enough.
The second stage was the rise of e-commerce. Suddenly business in the digital world became a vibrant and lucrative shopping space. E-commerce rocked the foundations of many businesses because they were forced to create platforms to handle their internet-based ordering, inventory, shipping, and customer service.
At this point, most businesses probably still viewed the internet as a transactional space. It was a place to make business transactions happen, but the missing element was interaction - what we now call the customer experience.
Today’s digital world has entered a new period of digital evolution where “interactivity” and “transformation” aren’t just buzzwords. Companies that don’t know how to skillfully maintain 24/7/365 communication with their customers are falling far behind their competitors.
Moreover, today’s newest businesses simply couldn’t have existed in 1985. A company like Uber or Airbnb relies so heavily on today’s technology that these companies were merely hypothetical before the advent of the internet and modern connectivity.
In the financial world, upstart fintech businesses are no longer hypothetical. They’re your biggest competitors. So what’s standing in the way of full-on competition? The answer is disruption.
Disruption Comes With Transformation
Many companies don’t have the appetite for the level of disruption that comes with true digital transformation. When they begin to experience disruptions like inconveniences, stress, and anxiety about the future, they give up.
Transformation is painful and we naturally want to minimize pain. Howard relates it to the experience of remodeling your kitchen while living in it. You know it’s going to be better soon, but during the transition, there’s dust and rubble everywhere, and it’s miserable to try to get through your day-to-day activities. That’s exactly why some people never remodel and still have kitchens straight out of the 1960s!
In the business world, there are also companies still stuck in the 1960s, 1980s, or even the early 2000s, and that’s just not good enough anymore. They can’t accept that transformation comes with a short-term hassle that’s absolutely worthwhile in the long run. Although transformation is costly, time-consuming, and disruptive, the pain is necessary if you want to stay relevant in the modern world.
Taking a Risky Path to Transformation
What if your company is too risk-averse to begin any kind of true digital transformation? Many financial brands have a baked-in aversion to risky behavior and risky business decisions.
Howard says it’s important to keep this in mind: “There is no non-risky path.”
There are inherent risks in running businesses and you’re always at the mercy of the marketplace. Give serious thought to the fact that not transforming is also a risky path.
For financial professionals, it may help to think about digital transformation in the context of financial planning and wealth management. Everyone understands that there is a risk/reward matrix with investing, right?
If you want a big reward, you have to be willing to take a big risk. In other areas, you can take smaller risks and accept smaller rewards. It’s all part of building a diverse investment portfolio. Digital transformation is among the biggest risks a company will take, but if they manage it correctly, it could yield the biggest reward in the company’s history.
Do Your Executives Need to Feel Some Pain?
Doing something simple like opening a bank account can be surprisingly painful. Sometimes it’s so painful that the customer gives up on one company and switches to another.
Your executives and managers should feel this pain so they understand the value of transformation. How many decades has it been since one of your brand’s top executives opened a new account at any bank?
Continue with this line of thinking and show the connection to transformation. Ask your executives to go through the account setup process “secret shopper style,” without any special treatment that they would usually experience as a bank executive. Challenge them to accomplish it in 10 minutes, which is something their competitors can do. Did it work?
These powerful experiences are sometimes what it takes to build buy-in for changes to the customer experience. When your executives have to deal with the mundane hassle of interacting with your company, suddenly they understand the need for digital transformation.
Going Beyond the Burning Building
Howard calls the stage described above - the stage when your executives feel a sense of urgency - the “burning platform” or “burning building” stage of transformation. There’s a burning desire to move quickly, but they’re still paralyzed with fear and uncertainty about what to do next.
That’s why the next step is painting a clear picture of where to go from here. One of the most powerful things Howard sees financial brands doing right now is creating customer journey visions. These are scenarios that show what it’s going to be like to interact with the brand in the future, plus how that compares to today’s customer experience.
- What’s it like to experience opening a new account right now?
- What should it be like to open a new account in the future?
- When you do something ordinary, like transfer money, how quickly and satisfactorily does it happen?
- What will it be like in the future when you want to accomplish things like getting a mortgage or making an investment?
Examine the numerous pain points involved with the activities listed above. Consider how your company could paint a new picture where the customer can accomplish things quickly. Meanwhile, the employee feels proud to help and proud of their employer.
Finally, make sure you’re giving your employees a reason to believe this vision of transformation is realistic. It’s a reachable, accomplishable goal, not just a pie-in-the-sky dream for the future. Show your team a plan for the steps you’ll take together to reach the finish line and celebrate victory.
Keep in mind that as human beings, we’re always a little selfish. We don’t just care about professional victories. We want personal victories, too. People naturally wonder, “What’s in it for me?”
Help your employees feel that they are the hero in this epic personal and professional story. When they’re helping customers accomplish things quickly everyone is thoroughly enjoying the experience, they’re heroes for your company and should feel like individual heroes too.
Communicate why each employee’s personal contribution is so important and so successful. And when your company finally reaches a major transformation milestone, make sure you thank all of the heroes who made it happen.
This article was originally published on May 10, 2022. All content © 2023 by Digital Growth Institute and may not be reproduced by any means without permission.