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Bridgit Chayt

Executive Vice President, Head of Commercial Payments and Treasury Management, FIFTH THIRD BANK

Bridgit Chayt serves as executive vice president, and head of commercial payments and treasury management f or Fifth Third Bank, N.A. She oversees the strategic direction of commercial payment and depository services, including commercial card issuing and acquiring activities. Before joining Fifth Third in 2016, Bridgit spent more than two decades in financial services, serving in various roles with Midwest Guaranty Bank and Comerica Bank, where she served as executive vice president and director of treasury management and business deposit services. She has a track record of delivering market-leading revenue growth, product innovation, customer loyalty and risk performance f or treasury management, merchant services, commercial card and government card programs.

Kunal Kochhar

GTS Head of Product Development Global Payments, BANK OF AMERICA

Seasoned Product Executive with obsession for customer experience, passion for technology and bias for action. Successful in building and managing diverse and cross-functional product teams, focused on delivering scalable, efficient and cutting edge high quality products and services. Thrives in a versatile environment. Decisive decision maker to achieve strategic objectives.

Jake Horne

Management Consulting Senior Manager, ACCENTURE

As a Management Consulting Senior Manager, Jake works with institutions in offering a comprehensive collection of solutions and services for the global banking industry. Through banking transformations, Jake helps Accenture’s clients grow revenue and sustain profitability. Together, you can focus on reducing risk, accelerating results and achieving long-lasting benefits.

Glen Chancy

Complete Billing System Product Director, INFOR

Glen has been in the enterprise pricing and billing arena for over 20 years, serving in multiple roles as a consultant, developer, and product manager. He was part of the working groups that created the AFP Global Service Codes, the TWIST BSB Standard, and the ISO 20022 BSB CAMT.86.

Byron Byrd

Director Banking Solutions, INFOR

Byron has been with Infor for over 19 years as a leader in the Financial Services, Banking, and Insurance space. He supports Infor’s global financial services customers and ensures that Infor is meeting all their application needs. Mr. Byrd is active in the industry at a number of global events including ACT, Eurofinance, Sibos, and AFP. Prior to Infor, Byron worked for Pega and several North American banks.

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Frequently banks would like to implement innovative strategies but these efforts are hampered by inflexible billing systems requiring extensive manual efforts to implement and monitor such client offerings.

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Webinar is May 11th at 12 p.m. Please register here!

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I wish I could say this is an isolated occurrence, but it isn’t. Sales and marketing go out looking for ways to hook in new customers. Billions are spent. Promises are made. Expectations are set. Customers buy.

And then, all too often, customer support, billing, and other areas of the business begin the process of convincing customers to leave. Billions to get the customers in the door. Then billions more are lost as those customers, in frustration, leave for their competitors.

I am often astounded at how hard companies strive to attract me as a customer, only to then turn around and take my business for granted once they have it. It is almost as if the two sides of the business are actively working against each other.

I not only design billing applications, but I also do a lot of training and writing / lecturing on best practices. There are three things I try to enable in my own customers to help them stop the bleeding and make sure that all areas of the company work together to provide a seamless, positive customer experience. While I mostly work with banks, I think these recommendations are important for most businesses.

Clear, Concise, and Accurate Bills – Customers look to their bills to answer basic questions. What did I buy? How much do I owe? When is it due? How can I pay? If your customers struggle to answers those simple questions, then your billing statement needs help. If the customer can’t read the bill without a guide book, then it needs a redesign. Simple, clear, accurate – anything else leads to frustration. Frustrated customers are a flight risk.

Model the Same as You Bill – Remember my opening story? The modeling application used by sales did not include all the taxes, surcharges, miscellaneous fees, etc. that are included in a normal bill. The estimated bill amounts were always off for this company, sometimes wildly so. Flat-rate service bundles are a great idea to simplify a customer’s life, and they make quotes infinitely simpler. If you are in a business that requires complex fee and tax structures, then make sure the modeling tool and the production billing platform share the same pricing algorithms. Otherwise, customers will notice, and they will get angry.

Train and Empower Customer Support – Whether on the phone or in a chat application, customer support representatives are your company as far as many of your customers are concerned. If customers don’t have confidence in them, then they won’t have confidence in you. Customer support reps should have the skill and the power to offer refunds, rebates, additional services, etc. to soothe and retain customers with complaints. Amazon does this better than any company I have ever seen, and other companies seem to be finally catching on.

Spending stacks of money to attract customers, only to drive them away makes absolutely no sense. If you company is not paying at least as much attention to retaining business as to attracting it, then you really need to rethink those priorities.

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“Well,” he said, “In the last release, we gave them everything they asked for. And they hate us for it.”

I went ahead and joined the company, and the next few months were, to say the least, interesting. After all, I had stepped into a situation in which a majority of customers were threatening to withhold their annual maintenance dollars. Before I could contribute to fixing the situation, I first spent time researching how we gotten here in the first place.

The company had followed what management had thought was a customer-focused development strategy.  Management had asked the customer base to submit business requirements for proposed enhancements to be voted on for inclusion in the next release. The bankers had taken to this with gusto. They had downloaded the forms and submitted a wide range of business requirements documents (BRDs) that addressed their needs of the moment.

My company had published the BRDs online, in a secure environment, so everyone had a chance to review them. At the next user conference, a user from each bank sponsoring a proposed enhancement(s) had answered questions. After the discussion and QA had concluded, each bank was asked to rate the proposed enhancements in order of priority. Management had promised that the Top 10 enhancements would be included in the next release.

After voting, the winning BRDs were given to Development, and the hardworking techs did their best to incorporate the customers’ abbreviated, often confusing, and frequently self-contradictory requirements into a mission-critical, enterprise pricing and billing system.

The results had been, quite frankly, bordering on disastrous.

And this was the mess I had been hired to fix.

The first thing I did was throw out all the internal technical specifications and went back to the original BRDs written by the customers. I read them with a fresh eye, and then scheduled conference calls to speak to the original authors. I spent hours on the phone with them getting to the bottom of their real needs and documenting them.  I explored a lot of scenarios with the users, and built up a much more complete understanding than was available from the original BRDs alone.  Based on these efforts, I quickly came to realize that my company’s initial attempts at coding solutions had fallen short of addressing the underlying business objectives for many of the enhancements.

The coders had put their spin on what were, in many cases, rather sparse documents. Lacking use cases and other critical details, the coders had done their best to provide what they thought the customers were asking for. In many cases, the functionality delivered had simply not met the real needs. Customers had spent money on upgrade projects, only to discover that they were no better off than before in crucial areas.

After getting an understanding of the authors’ objectives, I reached out to other users from our user community. We discussed the enhancements and how they would or would not be useful in their banking environments. I then began to expand the scope of many features and made them more capable of handling a broader range of requirements through configuration. The goal was to have a flexible, adaptable set of features that could be deployed in a variety of ways, rather than narrow, tailored features that solved very specific problems.

One more step was doing market research. While my banking customers were very smart people, I had noticed that many of them were trying to solve business needs that had been plaguing them for some time. I was curious about not only where we were today in the market place, but also where we might be headed. I took time to look at the broad trends in banking and commercial services, even going so far as to reach out to industry experts for their opinions. The information I gathered helped guide my thinking as I put the finishing touches on the new requirements documents.

The next step was to review my new requirements documents with the user community and to re-prioritize as needed. As I had expected, when full requirements with flexible, proposed solutions were placed in front of them, the user community chose to prioritize the enhancements differently than in the original round of voting.

When my BRDs were complete, I sat down with Development to review the requirements, answer questions, get critical feedback, and analyze the scope of changes needed to the current release. At the end of the reviews, Development estimated the level of effort to get to where we needed to be on each enhancement.

The Level of Effort allowed me to work with management in planning what could be realistically incorporated in the next release. Before, management had promised to include the Top 10 priorities of the clients, regardless of Level of Effort. A blank check had been written, but all companies have limited development budgets. I had figured out during my review that, on some big-ticket features, Development had been on the right track but had run out of money. Features that should have provided major benefits had been left only partially finished. By creating a realistic budget, we could create a road map to meeting all requirements based on customer priorities.

It was not easy. Not at all. But over the course of the next two releases we managed to get new, robust, market-leading pricing and billing enhancements in the hands of our customers. Trust was restored, and user group meetings lightened up and became much more enjoyable. Customers began lining up to migrate to new releases, and sales picked up as the new features proved increasingly attractive to new banks. It is truly amazing how successfully companies can be that learn to effectively listen to their own customers.

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Before we go any further, let’s focus on the biggest factor that can increase profit for banks – pricing for services. Pricing changes fall straight to the bottom line, as shown by PwC research indicating that a mere 1% change in selling price equates to an 8% change in profit level. That impact is higher than any other profit driver, including fixed costs, variable costs, and volume changes. Banks can make more money, more easily through small, incremental pricing changes than through any other method.

The theory is easy, just raise prices as much as possible, even if that is only a small amount, and watch profits ratchet up. But practicalities complicate that nice, simple plan.  Among other things, history gets in the way. Many banks have fairly generic standard pricing schemes for services that were often put together based on some notion of customer demographics and location. Since these standard pricing schedules were too generic to be useful, sales reps did what they had to do to get deals. And that meant “exception” pricing became the norm as opposed to an “exception,” while “standard” pricing became a rare event indeed.

Over time, many banks have built up huge volumes of exception pricing that are often seriously outdated. It is not uncommon for customers to keep their exception pricing arrangements for 10 years or more with little or no serious review. While inflation has occurred and markets have moved on, these customers have pricing that remains frozen in time at levels that have often become grossly unprofitable.

While most banks look to adjust pricing at least annually, these efforts are usually directed at standard pricing plans, with little or no attention focused on the exceptions. This effort often does little to move the profit needle, as so many existing customers are not using standard pricing for huge chunks of their services. Even worse, new deals are flowing in all the time with exception requests attached. So not only are banks in a hole, but they keep digging it deeper.

This may seem counter-intuitive, but to help the exception pricing situation, I often recommend that banks first tackle standard pricing. While looking at the competition may be valuable, the truth is that a bank with a lot of exception pricing already has a body of data indicating which pricing levels for which services sell to which customers and at which volumes. By exploring recent exception pricing, a bank can get an idea as to what customers are generally willing to pay for services and how their volumes perform over time for the services purchased. That information can be combined across the enterprise to form a picture of what customers in different markets and with different product interests are willing to pay for a bank’s services.

That information leads to greater refinement of standard pricing plans that align better to customer demographics and behavior. Once better standard pricing plans are in place, then it becomes time to start moving customers off exceptions, particularly if they are using very dated pricing, towards standard plans that are geared towards their products of interest, anticipated service volumes, and markets.

As older exceptions are brought to current market pricing, profits will rise. Current exceptions are reduced as targeted pricing plans reduce the need to custom-fit every deal. This enables banks to more effectively manage pricing changes in response to market conditions and available profit opportunities. Some customers benefiting from out-of-date pricing may be upset, and they may leave. But the truth is, that this may actually increase profitability as they may have been unprofitable to begin with.

Long ago, at the beginning of my career, a senior vice president at a bank once said to me, “Every deal is an exception.” I suppose that may have been okay back then, at a time when the economy was roaring and loan margins were fat. That era is definitely over. Right now, we need to design pricing packages that sales people can sell and that corporate customers will buy. And we need to be in a position to adjust that pricing over time as needed to maintain a healthy profit margin. Corporate customers should feel exceptional based on their excellent relationships with their banks, not on the basis of their pricing contracts.

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