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Chief Investment Officer
Commercial Loan Automation
Humanology - Additional Thoughts About the Customer Experience
Banks carry a very heavy burden; most banks, particularly the largest, carry a reputation of inhumanity. The bank is not human, and appears all powerful relative to any individual or small business customer. It can behave without mercy, possibly even unfairly, with anybody. Have you tried complaining at a branch of another bank? People here will tell you that they are not responsible and have no power to help you. The customer feels truly helpless. After all, isn’t it easy for banks to charge you for anything they wish? They already have your money. They only need to deduct the amount by a bookkeeping entry.
I had an experience like this a year or two ago at a mega bank where I have been banking for over 25 years. The bank made a mistake by dropping me from notifications on a joint account. When the account had insufficient funds, they didn’t inform me, and instead used an old address for the joint account holder. Eventually they closed the account and took a small loss. Only then did they inform me of the situation. I tried everything – calling, emailing, writing – to repair the damage caused to my credit rating as a result of the bank’s mistake. I paid the outstanding debt (which was already written off) with the written understanding that the bank will inform the credit agencies that the account is now in good standing. They took the money but never made good on their word. Despite a dozen communications with both the bank and the CFPB the situation was never resolved. The bank kept sending me form letters copying the regulations and not addressing the specifics of the situation. I felt wronged and helpless. I thought: what would a person who had no access to credit do in this situation? How can you trust banks that mistreat you like this?
As you all know, I’m also a strong advocate for our industry. Banks are the engines of a free economy, improving the flow of funds from deposit-rich areas to markets that need to borrow to fuel growth. They are an essential and excellent part of a strong financial system and the foundation of a small business-driven economy.
Reconciling these two facts is a tall order. The customer experience doesn’t start from the complaint. It actually starts with the first contact with the bank, which today is still done in person most often. The bank branch, despite major efforts toward innovation, hasn’t changed enough to address the evolving customer needs. The branch should project a sense of well-being, good spirit, relaxation, comfort, a welcoming feeling. Yes most bank branches are somber places, generally devoid of color, and the bankers are dressed formally (Note: there is a huge debate regarding the best dress code in our industry. There is much to say about this topic, but the best summary I know is: dress appropriately). They exude formality and cold professionalism, not necessarily friendliness.
The branches are staffed with bankers. No matter what we call the person at the branch, too many customers do not perceive that person to be a banker, a professional person. Is the branch banker as defenseless and inconsequential at so many customers feel? Do they have the authority to help each customer on their own terms instead of following a pre-determined roadmap?
Banks have such great opportunities to marry their caring, professional, problem-solving, 1:1 brand promise with execution in the field through better branch design and different branch staffing.
What is the experience we strive for? Here is an example.
You’re looking to buy cheese. You want a trusted supplier, but you don’t necessarily want to see or know the supplier.
You start by visiting several shops. When one shop stands out somehow – by offering a better variety; a more helpful and advisory staff; a friendly atmosphere; a great location; etc. you make your purchase. After a few visits, if the product quality, variety and the appropriate price persist, you will return to the very same shop. You stop shopping around because you know this place has what you want and need. You develop trust and predictability. Sometimes you simply like the salesperson and develop a relationship with them. You stop doing price comparisons. You aggregate your cheese purchases in this single shop, and may even trust their recommendations for new types of cheese. You might even feel loyal enough to be reluctant to buy cheese elsewhere.
This customer loyalty is not only a more pleasing to do business for both seller and buyer; it is also more profitable for both, as the seller, knowing the buyer, might give them extra cheese to taste or a price break, and the buyer stops shopping around.
Banks have achieved this level of loyalty with customers both in person and digitally. It is precious and a noble goal which should be pursued with vigor.
The basis for such loyalty is mutual trust: the customer trusts (with much upfront verification) that the bank will treat them fairly and give them good advice; the bank trusts the customer to pay their fees, pay back their loans etc., also with much upfront verification. When the first purchase occurs, the main goal is to get another purchase. A fair treatment and product delivery as expected will induce your client to come again next time. In time verification subsides as both parties build trust in each other, and more purchasing occurs.
Banks need to prove that they provide value-add, caring and fairly priced services to their clients. They should demonstrate that they are not abusing their power and size.
Let us not forget that our clients have become very informed about our products, our business, comparative pricing and even our margins. They can now analyze our value proposition better than ever before. Internet and TV have given them the tools to better assess our effectiveness and fairness.
These tenets are channel-independent. The customer experience, our value proposition and the brand promise transcend channel selection and should be valid across channels.
Our industry has image problems to overcome. Each and every bank can surprise and delight their customers by consistently delivering on their promise. Customers will have a certain measure of tolerance for mistakes if the overall experience is consistent and positive. Your loyal customers already give you a price break by not insisting on the best rate for every product they own with you. The same applies to the entire relationship.
Banks that deliver consistently both in person and remotely the product suite and value-added advice, those that do what they said they will do, can build the customer loyalty we all strive for and create a winning experience. Success will be measured by additional customer purchases, a.k.a revenue growth, especially across business lines, and by extending customer tenure.
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