The Experience Strategy Podcast: The Power of Omni-Channel Experience Strategies

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Welcome to this episode of The Experience Strategy Podcast! Aransas and Dave are joined today by tech executive Liz Grausam, who shares her personal experience consolidating her finances. Managing personal finances has become an epic chore for many consumers. Big banks, burdened by outdated technology, aren’t making it easier for consumers to choose them in an increasingly competitive market. In this episode we look at the cost of tech debt on the customer experience, and ways businesses can use omni-channel experience strategies to create lasting loyalty.

[00:00:00] Aransas: [00:00:00] Hello, and welcome to this episode. I'm Aransas Savas, and I'm Dave Norton. Dave, my friend here is an experience strategist. He's the founder of Stone Mantel and insights consultancy. He's a really fun, fabulous author. I am a coach, an experience designer. Who's worked with leading consumer-facing brands to create meaningful customer experiences last 20 years or so we are your host and we are endlessly curious about what makes great customer experiences and the strategies that are successful. And let's be honest, unsuccessful organizations leverage to create deep and meaningful relationships with their customers, and each episode of our show, we welcome someone to share a customer experience.

They've had some of those experiences that are off the charts and some of them are just really bad. Today I think we might wander into some of those rougher waters. I [00:01:00] can't be the only one who gets completely overwhelmed thinking about the various bank accounts that have somehow snuck their way into my life through various job changes, investments, mortgages, and children, and there are well over 5,000 banks in the US alone.

Figuring out what is where and how it all fits together and this crazy puzzle ends up feeling something like creating a seating chart for a wedding. There are all these different parts of your life. They're all coming together in this one big moment, but figuring out how to make sense of any of it can feel pretty impossible. I mean, how do you make this an awesome party and make sure that each individual person has a great time? It's a tough question and unfortunately, in personal finances, there's no like, hey, just have enough booze and everything's going to be fine option. Today we are excited to have Liz at Grausam join [00:02:00] us.

Liz has spent her career analyzing and working in the tech sector. She spent almost a decade on wall street as an equity research analyst. She's covered software service stocks for Goldman. She managed strategic planning and investor relations at Amdocs men's tech vertical at GLG and has had lots of experience and B2B services, and she happens to have really strong opinions about customer experiences.

Liz welcome. Take a minute and walk us through what you've been up to lately. When it comes to trying to plan the perfect wedding seating chart with your personal finances.

Liz: [00:02:40] It brings me back to planning my wedding, which is also a stressful, a stressful point in my life. Well, thank you for inviting me to talk about this.

I left my job a few weeks ago and so that was a catalyst for me to kind of spend some time thinking about our financial planning and where all of our accounts [00:03:00] are, and trying to get a consistent view of our finance, our finances, and our financial positions. As you explained in the intro you collect a lot of antiques over time in your financial health.

So the process for me was first taking stock of where everything was and then trying to assess where everything should go with an expectation and a desire to consolidate more of our banking relationships into a single platform with a single provider so I could get a more holistic view of where we were.

That was the catalyst for change and I've been a Bank of America and Merrill Lynch client for well over a decade. The choice was made for a very specific reason and that was the closest ATM to my home. I could get cash to pay various people in my life and so there wasn't a really strategic [00:04:00] reason why I became a customer of Bank of America and then Merrill Lynch other than really truly day-to-day banking, convenience.

As we were thinking about consolidating all of our financial relationships, that was no longer really a key criterion for us to consider but the convenience of digital banking and brokerage and retirement account management became the reason for us to select a provider. That kind of launched me on my journey of thinking through how to bring it all together.

Aransas: [00:04:35] And so as you started to dig through this, what did you notice about the services you were being provided?

Liz: [00:04:45] I had the opportunity to go into the digital experience of each of my providers. I had Bank of America Merrill Lynch. Joe is very familiar with, I had 401k with Fidelity, one with Prudential, one with [00:05:00] Goldman Sachs, and we have 529 accounts for our kids' college funds.

I have some styles of stocks.

Over the course of career and I've only had three major employers in my career. so I can't even imagine what this looks like if you job hop every two or three years but it became daunting to think about digitally consolidating all of this.

It was really important to me that I was able to do it myself. Then I was able to transfer things easily and manage things on one platform. What became abundantly clear as I tried to do this with Merrill Lynch, where most of our funds existed, is that the digital experience was horrible.

it was like logging into [00:06:00] Oracle software from 2002. I felt like I was going back in time. I was a software analyst and so when you have that kind of jarring experience of navigating through a modern website and it feels like something that you saw in college, it was pretty jarring and that's when I started to question like, is this where I want all of my family's wealth to be in a platform that feels very much like a dinosaur. That's when I started to get that initial experience cringe as I would call it and I'm like, I don't know, something doesn't sit right here.

Aransas: [00:06:43] Yeah, it does feel pretty incongruous, right?

You're like, here's everything I have and that I've worked so hard to create and now I'm putting it somewhere that feels unreliable and out of date and out of touch. I'm also hearing something about it [00:07:00] really seemed like they understand you.

Dave: [00:07:02] Right. I'm cracking up about the Oracle databases from 2000.

That's hilarious. Not a good experience for you.

Aransas: [00:07:13] Her expectations outpaced their innovation is what I'm hearing.

Liz: [00:07:19] Yeah. In a dated back earlier into my relationships, Bank of America acquired Merrill Lynch many moons ago which is why I decided to put my brokerage account with Merrill Lynch so that they could be integrated but their integration did not happen very seamlessly and still is not very seamless. You have a little bit of digital connectivity between the platforms, but it doesn't feel like one bank. You still go into two different applications, you manage them in different places and so they talk to one another, but yeah most bank accounts can talk to one another. I was going to an alternative. I was using Mint, which is a third [00:08:00] party aggregator to aggregate the perspective of all of my accounts, which then further took me outside of my banking ecosystems, right into another provider to find that continuity.

I started to get nervous to consolidate my accounts into Merrill, but I started the process. I set up an IRA, I set up another brokerage account with kind of managed or guided investing to test what their robo-advisor offering looked like and I tried. I gave him a chance, but it didn't go so well.

Dave: [00:08:34] Talk a little bit about what this robo-advisor was doing for you.

Liz: [00:08:39] sure. I started looking into robo-advisors actually as part of a strategy project. One of my projects at Amdocs, we are looking at financial services about, I don't know, a decade ago. You started to see new companies entering the asset [00:09:00] management space for personal finance companies like Wealthfront and Betterment who are approaching the investment or the brokerage account market with a much sleeker offering, which was very low cost to the consumer to manage money with very efficient money management strategies. Low cost ETFs, tax loss, harvesting strategies, such that you could manage money, and build wealth at very low costs without engaging a wealth advisor without paying one to 2% annually in fees in order to get that investment in bias. They entered the market challenge, the market accumulated tons of assets under management, and then all of the major banks started to respond with competitive strategies. Merrill Lynch, I think has something called guided investing. Schwab responded, Vanguard responded, Fidelity responded, all of the major brokerage houses and online brokerage houses responded with similar offerings.

So [00:10:00] now it's a standard feature for most. Full service, brokerage, and banking houses to offer some level of robo-advisor low cost investment management services to their clients.

Dave: [00:10:11] So that makes you a bit of an expert on robo-advisors just from your background, from the work that you've already you've done.

Who do you think has the best robo-advisor?

Liz: [00:10:25] I've looked in all of their interfaces. I mean, Wealthfront and Betterment are both very interesting providers. I got a little bit nervous as a consumer, myself and parking all of my assets with new challengers in the space, but they both have been very, very successful.

They have interesting onboarding procedures. The questions they ask about your financial goals and the various types of accounts they can support. Increased over time they're both very interesting companies. [00:11:00] You know, ultimately for me, I chose to consolidate our accounts over to Fidelity.

I had a 401k with Fidelity. Their online interface is much more modern. Their mobile app is great and easy to use. I already had an account established there. So bringing in new accounts was quite easy and what I found with fidelity was this really robust understanding of what I was likely trying to accomplish.

They understood to ask me about 529 plans, which are college funds about retirement funds. They explained the differences between full robo-advisor services, hybrid services, which predominantly rely on a robo-advisor and algorithmic investment strategy, but also offer some help from Fidelity wealth management services all the way through to fully managed wealth management accounts. They were very good at [00:12:00] guiding me through the onboarding and initiation of account openings. Guiding me to the next question. I felt like they had really good user designers, user researchers who actually understood from a consumer perspective, what questions I was likely to ask, what concerns I likely had.

They could anticipate my needs in a way that I wasn't experiencing it all at Merrill Lynch. I felt in the kind of wealth onboarding process certainly felt more holistic. Understanding what a consumer like myself was likely going to need but the Fidelity brand for me was something I was very comfortable with.

I worked with Fidelity analysts when I was at Goldman. I have a very high opinion of the firm professionally that it felt like a very safe place where it married an incumbent strong, trusted brand [00:13:00] that I'd known for decades with a modern digital experience and a lot of choices, like a broad spectrum of ways I could engage with them as a client.

Aransas: [00:13:14] It's so interesting too because you of course have a unique perspective of coming at this with an insider's perspective and with the external consumer perspective as a user. I think what you're describing is a really classic disruption story and what we continue to see in tech sectors across industries that these newbies are coming in and they're using user-centered design to really understand consumer needs and expectations and design to that instead of designing to processes and the legacy thinking that has underpinned the rules of engagement for decades and in some cases, centuries.

[00:14:00] It's not dissimilar to what is happening of course, across many markets but it sounds like from your experience, it's those that are relying on that core strength of trust and creating a space for you to feel confident that your big investments and they are going to be treated with care and innovating it with machine learning and with a user centered design and all of these more modern solutions.

What are you thinking, Dave?

Dave: [00:14:36] I love the way that you described Fidelity as this amazing incumbent, that they've been around and they've had this huge reputation. You wouldn't expect an incumbent like that to have such a good digital experience. For them to be able to navigate those waters [00:15:00] between their legacy channels and strategies and the new technology that they're bringing to bear with robo-advisors and so forth.

It's rare that a company can pull off both and it's often more likely that the experience is going to be like Merrill Lynch to a large degree. I mean, I think we see this happening in a lot of categories. What you described with Merrill Lynch is kind of what has happened for people who use state farm for insurance or some of the other traditional insurance companies where they had a representative or had an agent or had an advisor or had someone who was supposed to be by their side, helping them through the process and then along comes someone like Geico and completely disrupts [00:16:00] that model and makes it so that you just call into a call center or that you have a really amazing app, or you have some other kind of a tool that supports you and then all of a sudden the company is thinking to themselves, what is our business model?

The channel strategy has changed. Do we need to go all in on this new channel and what do we do with all of the people, with all of the relationships that we currently have? It's a real struggle for companies as they try to evolve and you can almost feel the pain that's going on at Merrill Lynch a little bit because they have a legacy technology that hasn't been able to be updated in any way, shape or form, or at least not to the level that it needs to.

Aransas: [00:16:54] They probably spent an enormous amount on that legacy tech, but there's so [00:17:00] much background noise, that it would have been easier to start from scratch and I think that's what you see across so many different industries is it's all that legacy tech, all those legacy rules and operations, and even customer expectations that muck up the works and stand in the way of progress for them.

Dave: [00:17:23] Absolutely and you know, Liz, I'm guessing given your experience that you're very familiar with the idea of omnichannel, seamless experiences, you know we stepped back and we think about how many channels strategy. Omnichannel, the basic definition of omnichannel is when you have a seamless experience across multiple [00:18:00] channels. If you want to think about different challenges you can think about, let's just think about Fidelity here for a second. They still have financial advisors. You can still have a personal financial advisor if that's what you want. That's one channel but they have their digital channels as well with their robo-advisors. They have call centers and the idea with an omnichannel strategy is that you're able to move seamlessly from one experience to the other or that you're able to work within one experience without losing anything on the other.

My guess is Liz, tell me if I'm wrong, there were certain things that you tried to do that you couldn't do unless you actually talked to an advisor or a person or something along that line when you were trying to set up with Merrill Lynch, is that right?

Liz: [00:18:53] Yeah. I mean I am the first person to say that I never want to talk to a human if I [00:19:00] don't need to talk to a human and if I'm going to talk to a human it's because I want to engage with a human but I generally don't want to do that to transact.

I will do a lot of things to avoid having telephone conversations but I was shocked, honestly, with Merrill Lynch. When you think about all of the signals I was sending into their CRM, their customer relationship database, right? I was a Bank of America customer as well. So I'm no longer getting direct deposits from an employer.

I have informed the system that my employment status has changed. I am trying to open up an IRA. Which indicates that I am about to trigger a consolidation. 401k's right. I mean, I am signaling like I'm flashing [00:20:00] lights right now at a service provider saying I am in need of financial service support right now.

There is no better indicator than what I have just fed the system proactively given information into the system and then I try to do a series of things and I can't get them done so there were two specific events. One was trying to move a stock from a transfer agent into an account, which I did electronically and the transaction got stuck. They never contacted me and told me why I had to call an agent and it then took 20 minutes on the phone for them to figure out what exactly had gone wrong, which then required me to set up another accountant-initiated transaction in a different way should just trust? I'm like, I want to give you more of my money this is great.

So there, there was that and then I set up, one of the robo-advisor accounts just to test out what the service look [00:21:00] like, what the onboarding looks like cause I'm curious and understanding all these things and I literally couldn't understand what they were asking me. I mean, I consider myself relatively sophisticated in terms of what I want to accomplish for my financial goals and I couldn't understand how to gain the answers to the questions in order to get the result that I wanted which just left me thinking like, geez, if I can't navigate this today, and then I'm going to try to bring more complexity into this, right? Because there are multiple goals I'm trying to manage too.

I have three children I want to send them to college. That's a big financial objective for me and it's not that far away. I want to retire. I have other investment accounts. I have some single stock exposure that needs to be managed. I currently don't have a full-time job, so I need to manage my cash flow and income.

These are all different goals snd if I couldn't [00:22:00] manage one of those goals easily. Like how could I possibly manage multiple goals in this environment? They pushed me into more omnichannel experiences than I wanted. I wanted to be able to do it digitally and self-directed to a large degree.

And I got pulled out of it and then that's when I just kind of threw my hands up and it was that day that I just couldn't understand the onboarding process for one of their products that I threw my hands up and said, okay, this is not going to work. I'm planning a different wedding,

Miranda: [00:22:43] This is so interesting to me because it doesn't sound like you went into that saying, Hey, I'm shopping around and trying to choose where to consolidate my banking use that I want to consolidate my banking doing so where I am making the most [00:23:00] sense and it sounds like you were making every effort to make this relationship work, but you weren't getting anything in return.

And to me, that starts to bring us to the big lessons around this here. Number one, things are just more competitive than ever before. You know banks were always a competitive industry. It's just the rules of engagement and how to win customers. And then more importantly, how to keep customers and deepen those relationships.

Those rules have changed radically and these older players have some incredibly strong. Areas to leverage in there that trust that that's not replicable nd my guess is that if there's any place that human interaction would have been valued by you to Dave's point about channel strategy, it would have been in that trust building, problem-solving and getting underneath your unique needs and helping map you to the right services [00:24:00] and support to really delight you as a customer.

But the human wasn't where you needed the human and the tech was not doing the stuff that tech is now expected to do, which is to know your needs, know your preferences and make it really easy for you to stay in that relationship. It sounds like everything they did was just making it harder for you to stick with them and ultimately I know you left and I've worked really hard to break up successfully to consciously uncouple. Now here you are with the beginning of a new relationship and I know you landed with another trusted brand that is innovating more and really focusing on customer needs.

Dave, let's start to try to sync up what we think others could learn. [00:25:00] It's like if I think about this across industries and I think about channel strategy and the importance of that to building relationships now I think if you're a mom and pop in the grocery industry or if you're a big bank sort of ruling the world, a lot of the rules are the same now.

Number one, leverage your trust with your customer and make sure that your experience is designed to deepen that trust, not break it. And the way we're going to know how to do that is to look at customer behaviors. How are people behaving in our systems? What are their expectations? How can we know them?

And then how can we use tech to enhance that experience, to optimize, and to sell. Speed things up so that it is faster and easier for people to get where they want to go [00:26:00] and hopefully stay in that relationship longterm. What are the other big takeaways you're feeling in here, Dave?

Dave: [00:26:06] I totally agree with you Aransas on all of those topics.

I also think that there's another issue that's going on here, my guess is and I don't have any clients with Bank of America or with Merrill Lynch, but my guess is that some of the problems that they're having are symptomatic of the way that they think about their audiences. They are probably not using experience strategy to define their audiences.

They're probably using marketing strategy right there. From a marketing standpoint, this has all of the signs, at least for Merrill Lynch of market segmentation, gone awry. They're essentially trying to figure out how much of the population is our customer and Liz, you don't fit in. [00:27:00] as their customer. They probably think that you would be better off with some other kind of technology or provider, because you want to do most of those things alone or by yourself.

Although it's very clear that most customers are headed that way so I think Merrill Lynch has kind of a market segmentation issue that's driving some of their decision-making and that decision-making is going to lead them to a dangerous place where all of a sudden, the entire market shifts and most customers are looking for both and they want in some situations to have a relationship with an advisor in other situations they want to have the best technology to guide their own portfolios. Merrill Lynch is very much at risk. [00:28:00] Fidelity is doing a phenomenal job at navigating those waters and it's really impressive. You don't see that very often as companies try to transition to new channels.

Miranda: [00:28:11] Professor Dave, if you were grading this experience through Merrill Lynch, based on what you've heard so far, what grade would you give them and why?

Dave: [00:28:23] Well, I think I would give them a C plus. And the reason is because a C plus is average. Right? And that basically what Merrill Lynch is doing, at least for individuals like Liz is a very average experience. It's what you would expect to get from almost any other company, that's got multiple channels and they're struggling to survive in some way, shape, or form.

Miranda: [00:29:00] Let this be a lesson to all legacy brands out there, but be they in person or driven by technology, it really does come down to meeting the customer's needs, where they are. This is a mobile-first world. It is a constantly changing landscape.

I think at the end of the day, it's, it's clear. We've seen it play out a thousand times already. Those who keep up, will keep going and growing, those who stay stuck and dig their heels in further and refuse to listen, which is frankly, what's happening in so many industries will get left behind. Here's to growing, here's to thrivin,g and here's to learning.

Thank you all for listening. We'll come back to you soon with many [00:30:00] more experiences, both the good, the bad, and the very, very ugly.