Part One of this series examined how the financial supermarket model has not provided quality customer service and how service can often be neglected in an environment of cross-selling.

Customers Want to be Taken Care of, Not Sold

Client CulturesModern banking customers are sophisticated, research driven, and expect top tier service in their banking interactions. When a checking customer receives excellent service during every interaction with a bank, that customer will naturally think of that bank when life's circumstances bring them to consider a mortgage, a new credit card, a home equity line, or some other service that banks provide. Customer care can be a true differentiator for banks that are willing to invest in it. A certain degree of courage will be required to however, to make the necessary investments since the benefits will be long tailed, rather than accretive to earnings in the following quarter. The banks that do the work to build a loyal customer base will be among the banks best positioned to thrive whenever the interest rate eventually normalizes. This will require a shift in thinking by management teams from short term to long term. An ancillary benefit of an investment in customer service can be customer retention in a price competitive environment. For example, if a customer has a 30 year mortgage and wants to refinance into a 15 year loan, there are probably three considerations that customer will evaluate: rate, closing costs, and process. Anyone who has bought or refinanced a home can attest to the headaches and time involved in that cumbersome process. If our example customer has always been treated well by the bank, then that experience will be at the forefront of the thought process, and could become the deciding factor in the decision as long as rate and closing costs are in the same ballpark as competitors.

Try Not to Create Problems, But Fix Them If You Do

When customers think about their banking relationships, chances are they want a few simple things to stand out such as safety, security, and a low level of effort required. Safeguarding customers' money has traditionally been and will most likely always be the primary function of banks, whether it be in a physical safe deposit box or secure online transactions. Once these functions are in good order, customers want an easy, pleasant user experience which includes top shelf customer service. A danger of taking customer service interactions and transforming them into cross-sell sessions is the creation of problems. Perhaps a new account gets set up incorrectly, or the customer changes his or her mind and decides a new account is not needed. Now the customer has a problem, where previously one did not exist. A new burden has been placed on the customer to take time to visit a branch, call a service center, or go online to correct incorrect information or close the account. While seemingly a small issue, there is risk that small issues can compound and harm the customer/bank relationship. A different approach, simply handling the service interaction in a way that takes care of the customer's need, creates a positive experience in the customer's mind. When enough positive experiences accumulate, the overall perception of the bank should be positive for a customer, which should naturally lead to the bank being at the forefront of any future banking relationship needs. Treating customers as assets to be cared for rather than metrics for cross-sales should pay dividends for banks that can think and act strategically.

The next part of the series will explore tools and strategies to improve and increase levels of customer service.