How Customer Experience (CX) has suffered at the hands of complexity
So far, 2020 has been a year of change, uncertainty, and opportunity. The opportunity to build relationships with customers based on transparency and trust. The COVID-19 outbreak made the need to connect on a human level even more relevant.
And even before the pandemic, many industries were seeing low consumer trust. At the beginning of the year, Edelman revealed that 76% of people were worried about the spread of fake news and false information. And the Financial Services industry was once again at the bottom of Edelman’s Trust Barometer. Investors have been asking for clarity and a better customer experience (CX) for years. All things considered, this year’s focus should have been on upfront and clear crisis communications.
Last week , VisibleThread released our annual report into the Asset Management industry. The results show that firms’ websites have not improved their transparency metrics since last year. Overall, the news is disappointing, but there are some companies making great strides to build trust.
Background to the report
VisibleThread’s Asset Management report has been running for three years. This year, we again analyzed 60 firms. The 2020 report compares the new results with those of previous years. And, we used the VisibleThread Language Analysis Platform to assess online content for all 60 firms.
This year, given COVID-19, we also explored how firms communicated with customers through the crisis. We saw FAQ pages, blog posts, letters and dedicated website sections in which firms presented COVID-19 information to customers.
What we found out
While many firms made improvements this year, unfortunately the big picture is still one of complexity.
Websites remain harder to read than Moby Dick
We use readability scores as a way to measure reading ease . The scale runs 0-100 and the higher the score, the easier the content is to understand. Let’s give some tangible examples. An Academic Paper on Chess scores 30. The Harry Potter novels come in at an accessible 73. The novel Moby Dick scores 58.
Asset Management firms should aim to create content that scores at least 60. The average score across the firms we analyzed was just 36. Most were harder to read than both Moby Dick and an Academic Paper on Chess.
These examples may sound totally unrelated to your industry. We use them to bring the problem to life. Put yourself in the shoes of someone who has never shown an interest in, nor played, chess. Now imagine trying to read a dense text on the subject, full of long sentences and complex phrases. Technical jargon that you have never seen before. You’re likely to give up within seconds. Now pretend you are an investor, and you’ve put your trust (and money) in the hands of an Asset Management firm. They send you a similarly dense text, full of complex language. It’s impossible for you to figure out what it all means. I’ll bet you’d feel negatively towards that firm. You might start to doubt that your funds are in the right place. Words really do matter.
The average sentence length still at 5x the recommended level
Long sentences make content harder to read. We recommend 5% long sentence use or less. Disappointingly, our research shows an average score of 25.66% across the 60 firms we looked at.
The good news is that it’s easy to fix sentence length. We’ve compiled a few tips in a previous blog available here.
57 out of 60 firms overuse passive voice
Passive voice tends to have a formal and academic tone. It is also often unclear who is taking the action.
“Markets will be monitored and you will be informed of changes.”
“We will monitor the markets. And, your fund manager will inform you of changes.”
The second sentence uses the active voice. The information comes across clearly, promoting trust. In the middle of a pandemic, this is of utmost importance. That’s why we recommend a passive voice level of 4% or lower.
No mention of COVID-19 on 30% of websites sampled
18 of the sites reviewed did not mention coronavirus, nor have a plan available to support customers through the crisis. So these investors do not have accessible information about the impact of the pandemic on their funds.
The leadership of 9 firms published executive letters on their sites about the impact of COVID-19. We analyzed these letters from a plain language perspective. Our analysis found that none of the announcements communicated at a grade level 8 or lower. We know that the average North American consumer reads at an 8th-grade level. So these letters would not be understood by most of the population. The majority of Asset Management firms have therefore failed to support customers with clear information through the crisis.
What a difference a year makes
This was the perfect year for firms to improve trust and CX. Not just because it was the right thing to do, but also because it was good for business. Fergal McGovern, CEO of VisibleThread, said:
“Investor communications are mission-critical to asset management firms. Improving efficiency and clarity reduces risk for these firms. And, firms can achieve this when transparency takes priority. It’s disappointing that our 2020 findings show little change from previous years. We would have expected more organizations to focus on CX. It’s a key differentiator and business success factor, especially during the current pandemic.”
Yet, there were some positive stories. PGGM rose from rank 12 in 2019 to first place this year. They improved across every metric. BlackRock made great improvements in readability. All in one short year. It can be done. To build lasting relationships, other firms must follow suit and focus on their communications.
And there’s more good news. For those who haven’t yet embraced clarity, the opportunity is still there for the taking. Download our Asset Management Report for some tips on where to start.