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/   Spotlight

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*Guest post by Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates

Just like with couples, the relationship between retail banking customers and their financial institution is complex.   As with any relationship, a healthy connection between two parties is one that develops over time and is typically based on mutual respect, trust, honesty and support.

Most of us know that it takes effort for healthy relationships to work!  Whether we like it or not however, breakups do happen and in the case of bank customers, they get over them quickly and move on to another bank relationship.

The following are a few valuable insights about why retail bank customers may break up with you and how you can implement a few change initiatives to maintain a healthy connection with your customers….to avoid the bank break up.

Reason #1:  Callous Communication – Problems become a customer’s biggest problem

Problem prevention needs to be a high priority for all financial institutions, given the incidence of problems (22% of customers[1] indicate experiencing a problem) and the significant impact that problem incidence has on overall customer satisfaction.

Prevention Tips

  • Ensure customers understand fee structures, deal honestly with them and explain the fees right up front – it improves awareness of fees and minimizes complaints.
  • Engage new customers during account initiation to identify their needs and sell them the products that meet those needs …..it lowers the incidence of future problems if they are happy from the start.
  • Empower bank representatives (branch and call center) with the necessary authority, and provide proper training that will allow them to address any customer misunderstandings at the first point of contact.   It will eliminate confusion for future problems.

Reason #2 – Unmet Needs – You’re not giving them enough of what they want

To successfully manage customer expectations, it is critical to offer the product features and services that meet customers’ needs, such as direct deposit; electronic statements with check images; and overdraft protection. When customers are offered six or more features or services, satisfaction is 58 points higher than when customers are offered fewer than six features or services.

Prevention Tips

  • Show them some love, and offer customers the other innovative products and services that meet their needs at the time of account opening—more than the standard banking products (i.e., checking, savings).
  • Explain the benefits of the services associated with these products (i.e., overdraft protection), not just the features
  • Proactively contact customers.  They love personalized follow-up service, and it leads to greater product penetration and increased satisfaction.
  • Creatively communicate with your customers and use interactive channels —customers who cite communication via email, phone, or at the branch have a higher incidence of opening new accounts than those customers who are just contacted via mail.

 

Reason #3:  Feeling Underappreciated – In-branch or phone customer service is painful

It is key for financial institutions to focus on providing basic customer service elements in branch offices and on the phone.  From the moment a customer steps into the branch or calls on the phone, each point of the interaction shapes perception of the banking relationship as a whole.  The optimal in-branch or phone experience begins with a focused lobby management program designed around key elements of customer satisfaction is vital.

Prevention Tips

  • Show them you care and provide personal service during customer visits to the branch.  Some include activities such as: greeting, calling the customer by name; offering further assistance; and thanking them for their business after completion of the transaction.
  • Show them you care and provide personal service during call center calls.  Some include activities such as: greeting customers in a friendly manner; providing their own name to the customer; having the customer’s information available; handling any problems without transferring customers; and concluding with offering the customer further assistance and thanking them for their business.
  • Courtesy counts, so provide a level of service that shows patience, respect and empathy.   This not only increases satisfaction, loyalty, and retention but also has a significant impact on reducing future problems.
  • Ensure executive management and company-wide ownership of basic service elements and initiatives. Managers must regularly communicate to employees the bank’s priority on satisfaction.

[1] J.D. Power and Associates 2011 Retail Banking Satisfaction Study

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.