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One of the areas that rarely gets highlighted as a risk to be mitigated is that of client poaching. However, before we talk about this, let’s start with a simple question. How do you WhatsApp/WeChat your clients? Major firms in the financial, legal, insurance, education and other industries need their employees to be in constant contact with their clients. But how is this achieved?
Confidential information can be safely given mainly through properly established compliant business communication platform. However, clients’ preferred ways of keeping in contact with their service providers is via popular messengers like WhatsApp, Line, Telegram, Viber etc.
Does your company have the tools that allow employees to respond to clients on those channels? If your answer is no, your employees will have to use their personal messaging WhatsApp, Facebook or WeChat accounts to meet the needs of your client.
For clients, messengers are comfortable, quick, and fit easily into their daily routine. Being able to contact your staff using messengers shows your company is client-centric.
Employees are seen as having a positive and flexible attitude. They’re shown to be committed and adaptable to the preference and comfort of the client. But what happens when a client asks your company’s employee to send them pictures of a property or a contract?
This is where we can encounter a major problem – client poaching.
Compliance risks and a lack of B2C communication data ownership by your company are, and should be, serious concerns. A lesser-discussed problem with the use of personal instant messenger apps is the risk of client poaching.
Here is the reality. Clients are not and cannot be “owned” by businesses. Developing a relationship of mutual loyalty is desirable. However, there is no true way to prevent clients from using a different service provider.
Unfortunately, employees and clients exchanging information using private communication tools can see loyalty and ethics become blurred. Private communication is no longer within the control or accessibility of the firm.
Using an employee’s private messaging platform for business communication creates many risks.
There is the issue of breaching the privacy of employees. Employees put their personal information at risk when they use their personal messengers to communicate with business clients. You can read an excellent explanation of instant messengers and employee privacy here.
One of the biggest risks, outside of being unable to retain your business B2C communications data, is that of the loss of a company’s clients, otherwise known as client poaching. However, the two risks are closely connected.
Any information and communication is kept on the messengers for good, end-to-end encrypted. This includes anything that relates to business orders, approvals, edits etc. So when the employee leaves the firm that data goes with them. Even if you ask and they comply and share the information with you, it will always stay on their side as well.
The situation could look like something like this: A client reaches out to your (former?) employee, using WhatsApp to request their usual services. Unfortunately, their contact is no longer with your firm. This ex-employee is happy to provide their services, but on behalf of the company they are now working for.
Hence, the ex-employee would be poaching clients from previous employer at that company’s expense. This isn’t the client’s fault. The employee was their primary contact, and they are just placing their normal and usual request.
But while the ex-employee could suggest the client contact the original firm, what if the client simply can’t be bothered making another phone call?
Let’s take the instance of a lawyer in the legal industry. What if there is a falling-out which involving sensitive information of a client? The information exchanged through a private messaging platform foreign to the company can be leaked as the employee leaves the firm.
Obviously, this client’s confidentiality is at risk. But also, that the ex-employee would be able to transfer any information, and the client, over to the next law firm the employee works in.
This isn’t a fictional scenario, but something that actually happened. An ex-aviation lawyer employee from Shine Lawyer took six clients with him when he took off to start his own business. He claimed that all the information he used was available by other public sources.
The above scenario has also occurred in the real estate industry.
Just one example is when Real estate agency YPA suffered the loss of 14 clients and property management to a competitor company. Employees had regularly discussed business information with clients through personal communications tools. When these ex-employees left they used this information to “poach” the clients for a rival agency.
YPA through they had a strong case for client poaching due to the exploitation of confidential information. Unfortunately, this argument was was determined to be “weakly arguable”. This case focused on the difficulty of dissolving a trusting bond between clients and ex-employees.
It was found that maintaining contact through personal communication platforms further strengthened the relationship. Another unfortunate example of client poaching employee can be viewed in this personal experience of a small English academy owner on the outskirts of Madrid.
These examples show the importance of separating personal and professional communication. The solution lies in replacing personal communication devices with a business messaging platform. Establishing and securing the privacy of the business, employees and clients. It’s a win-win.
LeapXpert’s Federated Messaging Orchestration Platform does just that: it completely separates employees business messaging from their personal messaging. By doing this LeapXpert can actually help prevent client poaching. It allows the exchange of information between clients and employees to be conducted on company owned secure and compliant communication platform. The risk of contacting clients on their preferred messaging app is secure when staff can use company tools for communication. It also maintains the retention of data and confidentiality safe in the case of employees walking out of the firm.
Hello, World! We are stepping out in style tomorrow at the Singapore FinTech Festival Global Investor Summit Hong Kong Roadshow at 4:00pm in Central. Come and join us, we’ll gladly tell you all about compliant communication in finance and legal sectors! Yes, we can. And we are willing to share with you our vision on compliance.Read
London Finovate Feb 2019! We are very excited for upcoming introduction of our compliant communication experience between businesses and their clients at Finovate 2019 in London! Integrated with WhatsApp, WeChat and LINE and ensuring that all client communication is tracked within the single LeapXpert experience! Demo Session #6 on Feb 13, 11:15 am. All welcome!Read
Finovate – thank you, it was a great event! We were truly delighted to present LeapXpert compliant communication experience today! Would be happy to answer any further questions and inquiries or present a detailed product demo to a specific company. Being introduced to leading world banks, LeapXpert communication platform represents the future of compliant communication in fintech. Click and watch the video.Read
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