Your most unhappy customers are your greatest source of learning…..Bill Gates
Last week, I started a series on some of the bankers’ headaches: Customer attrition, exits, account closure, account dormancy and what have you. The crux of the matter is that customers stop operating their accounts. It is sometimes funny, but serious when you look at the long list. Some may seem very trivial, but the point is customers are the gold that a miner is looking for, so whatever form they come in they must be treated fairly.
We also realise that despite all the expensive customer retention strategies and extravaganzas banks initiate, they will leave if they are unhappy. Last week, I started listing some basic branch banking experiences that make customers leave, albeit some silently. It is the silent ones that are more dangerous to a bank! Why? Yes. Complaints are gifts to banks.
Why are complaints gifts to banks?
- Customer Complaints are the best assessment of your bank by your customers.
- Complaining customers give the bank an opportunity to improve the quality of their products or services.
- Customers who do not complain may easily switch.
- They give managers the chance to rectify the situation over and above customers’ expectations.
- Complaints can be used to develop one-to-one relationships with customers.
- This should be seen as a less-costly research. The information provided by the customers are obtained by your bank at virtually no cost. Complaints are therefore gifts from customers.
- A complaint is an important opportunity to diagnose a problem.
Why Customers Leave (contd.)
Here are some more reasons which make customers leave:
- Unfulfilled promises: Do you give firm promises that you are not too sure about delivering?
A loan in three days… but not letting customers know there are terms and conditions attached to the transaction. The fine-print in the account-opening form is supposed to be read and understood by the customer, but are they asked to read it? Or will it waste their time and the bank’s? Will they in future claim ignorance or a fiduciary relationship? Are they being coerced to patronise products that can create future problems for them?
- Mature investments being left idle
As for this one, it is a big no-no. Can you imagine a senior citizen whose mature investment of GH¢200,000 was not rolled and rather left idle for six months? How did you handle the situation when the customer detected it and proved from his documents that it was supposed to have been re-invested? Were you afraid of management’s sanction and therefore just apologised to the customer? Final outcome…Legal suit.
- Mis-selling of products and services
Conversation between a Relationship Officer and Mrs. Owusu, a trader in spare-parts: “Come and open an account in my bank. Your funds transfer to China will be done for any amount. Trust me. Forex is not a problem”. Yes, it will be a problem when the time comes. Mrs. Owusu does not have the relevant documents required by the law. Her supplier in China insists on advance payment even for huge amounts! Disappointment turns into anger. Mrs. Owusu withdraws her funds and changes her cedis on the black market and does an illegal transfer of the funds through her friend!
- Not feeling valued, especially when times are tough
Whenever there is a bump in the economy, customers who do not feel valued are less likely to remain loyal to a brand or a provider. They will shop around because there is a good chance that there is a drop in their disposable income and they will look for the best price. The exception to this are the loyal customers who are actually willing to pay more for a product or service if they know that the provider will consistently deliver exceptional service. The service experience has a financial value.
- Queues in banking halls
Banking hall queues and congestion are perhaps the commonest headache for customers. This is especially serious with the bigger banks which tend to have many customers. “The system is down” is a phrase familiar with bank consumers who have to endure long waits in the banking halls because bank software has failed.
At the end of the month when salaries are to be credited into customers’ accounts, some customers spend hours at the bank either withdrawing money, cashing or paying cheques. Some ordinary bank customers (mostly low-income earners and pensioners) do not want to pay ATM withdrawal charges. Others also are not technology-savvy, hence they prefer to walk into the branch to withdraw their salaries or perform other basic transactions. They all swell the numbers – and the more the customers, the poorer the customer service they get.
- Unhappy Employees Giving Bad Service
There is a slogan which says “Happy staff = Happy customers”. How do banks bring out the best in employees? Customer-focused leaders are successful at engaging their employees in a way which enables the organisation to maximise the quality of customer experience. Systems, processes and procedures are customer-aligned, and it is the fully engaged employees who make this alignment happen.
This results in operational efficiencies, improved morale, reduced absenteeism, lower demand on certain benefits, lower turnover etc. All of these represent significant cost savings. Let us look at the opposite of these: unprofessional telephone etiquette, delays in loan processing, lack of response or empathy during system failures, lack of queue management causing long waiting periods resulting in customer attrition.
Learning from the Customer: Critical Customer Incidents
Extreme experiences can be great teachers. Whether they’re good or bad, they stick in our minds and can be the motivation to change behaviour and thinking. How do you learn from them? Here are some simple pointers on investigating critical incidents and identifying the significant things you can learn.
Investigating a Critical Customer Incident (CCI) Case-study
Here are a few tips on investigating CCI’s
- Determine the specific event that precipitated the customer impact
Ask: What did we do that caused a problem for our customer?
- Examine your current process
Ask: What is the collective understanding of our policies and procedures related to this problem?
Always begin by examining your current policies and procedures. When investigating a negative CCI, solicit input from employees on their understanding of your policies and procedures. If there is wide disparity then there is no clear process. If one or two individuals misunderstand your process, then you have a training problem.
- Determine root-cause
Ask: Where did our policy or procedure break down?
Continuing the above example, the cause was that there was no clear process in place. It could be due to lack of training for the staff.
- Determine follow-up
Ask: What could have been done to avoid this problem? or What needs to change to avoid this problem in the future?
Once you’ve pinpointed where your policies and procedures broke down, then corrective action should be obvious. If your process is unclear, document the way the process should work. Be sure to include input from your staff. If the process is clear but practiced inconsistently among employees, then provide training. In any event, be sure training for new employees is updated to include this CCI.
As with any Critical Customer Incident, a good manager must examine how he or she may have contributed to the problem. Perhaps the manager was too lax in providing training. Maybe policies and procedures were not clearly or consistently communicated. When a manager openly accepts a portion of the ‘blam he or she communicates a powerful message to employees: It is okay to make a mistake if you own it and take action to correct it.
Learning From Critical Customer Incidents
The concept is fairly obvious. You learn from your mistakes and your successes. Where companies miss the mark is in leveraging a CCI to improve their business. Here’s how to use them:
Negative and positive CCI’s are extremely useful in training new employees. Simply telling a new employee “Customer service is critical” is not good enough. Give them specific examples of what good and bad service looks like. Sharing real-life cases enhances the training experience.
If an employee is involved in a positive CCI, certainly recognise the accomplishment in his performance evaluation. If he is involved in a negative CCI, determine his portion of responsibility and use it as a learning opportunity. Avoid basing an employee’s performance evaluation entirely on just CCI’s. Overall performance and performance trends are more critical when evaluating employee performance.
Good or bad, CCI’s can be used to instigate improvement in your business.
Establishing ‘Best Practices’
If something works, then by all means adopt it all over your business wherever possible.
My Final words
Critical Customer Incidents are important opportunities no company can afford to miss.
Learn what is important to your customers and shape your business to show them that you value their business. This way, customers feel a sense of belonging and stay with your bank. Please continue to be close to your customers and prevent them from leaving.
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case-studies training young bankers in operational risk management, sales, customer service, banking operations and fraud.