13Sep 5 Million Customers To Switch Banks After Poor Service? Bank On It!
Unhappy customers walk away and find alternative suppliers – we all know that! But what happens if it’s difficult to switch or that the alternatives seem to be ‘just as bad as’? Some would argue that’s what many banks have relied on over the years to keep their customers!
New research by SAS has highlighted that 57% of current account holders either agree or strongly agree that the UK’s banks are failing to improve customer service, and 24% said they didn’t perceive any bank to be the best at providing customer service! Well, that may soon be about to change!
New legislation in the UK which comes in to play on September 16th will make it easier for unhappy bank customers to switch. Under the new account switching rules, consumers will be able to have their current account services transferred between providers in seven working days, with their new provider managing the process on their behalf.
SAS’s research suggests that almost five million current account holders are likely to do it in the next 12 months!
This might be seen as a massive threat for banks – I can’t help thinking it’s a massive opportunity! Simply by creating ‘remarkable’ customer experiences as a differentiator they would be seen as ‘Dramatically and Demonstrably Different‘! from their competitors.
If I was head of a bank, this is what I would work on…. (please note: you don’t have to be a bank to do this!)
1. Be ‘Easy To Buy From And Deal With’!
Research consistently highlights that in all sorts of industry sectors, customers biggest frustrations are things like ‘lack of response’, apathetic staff, overbearing and over bureaucratic systems and processes, not to mention waiting too long, automated phone systems, and piped music down the phone! It’s the things that create what we call ‘Sales Prevention Officers!’ People, systems and processes that stop customers from enquiring, buying and re-buying! Eliminate your Sales prevention Officers!
2. ‘Delight’ Your Customers!
Winning businesses ’exceed’ their customers’ expectations – that’s ‘customer delight’. Not ‘Have a nice day!’ or ‘Buy One, Get 10 Free!’ – obviously, it’s got to make commercial sense (hey, anyone can give stuff away!)! It’s not a gimmick, and it’s certainly not a ‘one off’! So, what exactly is ‘Customer Delight’? Our definition is ‘surprising customers with the level of service you provide’ and let me just emphasise, it’s surprising them in a positive way please!
It’s about ‘going the extra mile’, it’s about ‘surprising’ them with the level of service they provide (positively please!) and it’s about ‘the personal touch’. Customer Delight often appears spontaneous, but you can actually build ‘planned spontaneity’ into your operations. What could they do that would ‘surprise’ their customers? They need to work out how to build this into the way they interact with them. For bank managers, it could be simple things like ringing up their business customers and simply asking ‘how are things’?
3. Create Dialogue, Not Diatribes!
Our research indicates that a frequent comment from customers is “they don’t keep us informed” or even worse “they never return our calls”. A survey of more than 2,000 small firms by the Federation of Small Businesses (FSB) has found that 56% of them believe that banks do not care about small businesses. Again, this is an opportunity to be ‘Dramatically and Demonstrably Different’!
Banks need to have ‘conversations’ with their customers. It’s about finding out how they want to be kept informed – a quarterly email, six monthly quarterly calls or meetings? What works for them? It means agreeing the parameters, and sticking to them! Customer focused businesses recognise that customers want dialogue, not diatribes and they proactively work on building trust!
A starting point for banks could be to use the information they have on their customers and actually use it! This could include pro-active ‘personalised’ communication such as sending articles of interest, leads and opportunities, press cuttings, emails, highlighting a useful website, industry updates – Anything that adds value in a format that works for their customer, and doesn’t just sell a new pension scheme!
4. Deal With Disappointment!
Things go wrong in business and sometimes customers are ‘disappointed’. How a company deals with that ‘disappointment’ often says a lot about that business and has a significant impact on what happens next. Research indicates that typically 70% of people will do business with you again if you can resolve their problem or complaint, and this rises to over 90% if it’s done ‘on the spot’. Combine this with the fact that it costs between six and ten times more to sell to a new customer than an existing one, then ‘dealing with disappointment’ is powerful stuff!
‘Dealing with Disappointment’ is something that ‘differentiates’ customer focused businesses from others. Banks need to prepare for it, look for it, empower for it, spot it and ‘deal’ with it!
5. Foster ‘Devoted Customers’ By Consistency!
Doing these things, by definition, raises customer expectations – this is a good thing provided those expectations can be met, and met consistently. the challenge for any business is to build on this and use it as a differentiator – it’s that ‘Dramatic and Demonstrable Difference‘ again!
If you’re sat there reading this, thinking about your bank manager and nodding your head, you might want to take a minute to think about your business too! We believe these 5 things apply to all businesses, not just banks…. and that includes yours!
- How do you measure up?
- Think you know? Don’t ‘bank’ on it!
- Why not ask your customers?
Get their views and take some action! Whether you are a bank manager or not, you might also be interested in a couple of free e-books I’ve written on this stuff:
Customer Delight As Competitive Advantage is a 44 page e-book that highlights the ingredients of customer delight, provides examples of businesses that are actually doing it and ideas to help you make it work in your business.
Creating An UBER Culture explores the principles of creating the culture you want and highlights the key steps to make them work for you!