Love in a financial climate

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An issue that we have been talking about for well over a decade in the retail financial sector concerns how customer relationships are made and managed.

Generally I think we can all agree that banks are not very good at creating or managing customer relationships, however most people who use banks probably have a reasonable relationship with an individual in their local branch.

One of the latest operational trends particularly in the larger banks is to move account managers and relationship managers from branch to branch every two or three years. One of the principle reasons for this is an attempt to move the customer relationship from individual members of staff to the entity of the bank in the aim of creating a loyalty to the bank and its brand; however it again demonstrates the lack of customer centricity and the lack of understanding of the experience of the customer on the part of these organisations.

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Any relationship that a company’s staff have with customers should be nurtured and used in a way that the bank can leverage any trust that already exists between staff and customer.

By moving staff and putting a barrier to the existing relationship means that the new account or relationship manager will often have to build all of the previous occupants relationships from scratch particularly as  legitimate reasons to visit a branch, due to technology and remote services become less and less.

My personal experience is that when there is a change in personal managers it is generally left to the customer to find out who their manager is, usually some months after the change has been made and the customer is usually in dire need of a service or advice.

It is usually apparent from basic usage of a banks facilities that Banks do not use properly the CRM systems that they install which would enable them to switch account or relationship managers without any hindrance to clients.

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What banks fail to realise in many cases is that because of customers inherent lack of trust in banks the face to face contact provided by the account or relationship manager is probably the last point of call. For the customer to then see an unknown face who has no knowledge of their background or basic financial history (not an uncommon complaint) is not going to make that customer feel safe in the knowledge that they are getting sound financial advice.

Frequently moving staff from one job or branch to another also creates a problem with motivation of the staff to develop relationships with customers. When they know that in two or three years they will be moved to another position what is the point in trying to develop customer relationships, whether on a personal level or at a corporate level. It is much easier just to focus on product sales, which has all the inherent problems of creating a product focused bank centric customer relationship model.

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There is a key difference between the relationship that exists between two people or a group of people and the relationships that exist between a corporation and a person.

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Can a company really be a friend, can we have a real relationship with a company, and the answer is no.

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Even though some companies have incredibly strong bonds with their customers, think Apple, Mercedes Benz or Coca-Cola, but they are in essence pseudo-relationships. Obviously banks want these types of relationships and the customer loyalty and repeat business that goes with it.

Companies who have these bonds with their customers know that the relationships that their customers have with individual or groups of staff are supplementary and are harmonious to the overall corporate relationship. Tools and systems are developed (and often bought by banking groups) in order to aid the process of managing that relationship at both the level of the individual and at a corporate level.

Most of these companies also understand that like real relationships in order to be satisfactory it has to be a two way affair and they have to satisfy not just our rational needs but also our emotional needs.

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These pseudo relationships are just as emotionally driven as our real relationships and we have similar feelings of sadness or even rejection when a company treats us differently or offers us products which we believe are not in line with previous offers or in line with our current expectations. There are also the same feelings of guilt as a customer when we buy from another company.

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So why can’t banks build the same level of corporate loyalty as Apple or Mercedes or Coca-Cola? Why don’t we love our banks?

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Banks in particular have a tendency to make promises that, not only do they not keep, but they have no intention of ever delivering against, either through a lack of physical capability or an absence of motivation to deliver against the promise.

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The relationship is entirely one sided, and entirely bank focused and historically it has been designed that way and continues to be designed that way. When the perceived relationship is so one sided, as it is with many bank – customer relationships then it becomes even more essential to utilise the relationships and the trust that individual staff have built with customers.

Banks and financial services are fairly unique in that the relationship moves between phases of high and low contact and usage. With most tangible products your high contact with the company is generally only when you buy the product or require servicing, such as an annual car service; most of the time the relationship is based on usage of the product.

If there was a problem with the brakes on my car I would not necessarily expect the individual who sold it to me to fix the problem, however I would expect them to know where and when the problem could be fixed or to put me in contact with the individual who has the right expertise.

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In banking this is even more important, financial services requires multiple levels of expertise and knowledge, which generally means that teams of people are required to fully deliver a client’s financial service needs, so it makes absolute sense that the entity has the customer’s trust and the principle relationship.

But trust cannot be forced; it has to be earned, and that will only be achieved when customer needs are placed before that needs of the bank.

TRUST

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With automation, alternative channels and the need to radically cut costs, relationship managers might only see their customers once or maybe twice a year, if at all, it is unlikely that they will see them casually in the branch as there is little reason to visit, and when they do visit it is likely to be for some level of problem resolution.

This (problem resolution) should be a good way to build client loyalty, many studies have found that the ability to resolve customer problems features high on the reasons for customer loyalty and is one of the principle reasons that an individual would feel motivated to recommend an organisation to a friend or colleague, but for this to happen particularly with a stranger we need to re-assure the client each step of the way both in their rational and emotional needs.

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A typical example we observed recently whilst undertaking some research, was a customer who entered a branch and spoke to the person closest to the entrance, after explaining they were directed to another person in the bank where after waiting for a while they again explained their needs. After just a few minutes they were directed to another person in the bank where after waiting again they were forced to explain their needs – again: the customer left empty handed.

The needs were not complicated and with a little planning and foresight and reasonable use of systems and tools, they should have been able to resolve their problems easily. If you were designing a customer centric system for this customer’s needs, you would firstly make sure that at the first point of contact you understood and made note of their basic needs, the second point of contact in the bank should have been the right person for the job, and their needs should be explained by the primary contact. If there was a need for further expertise, that expertise should be bought to the client, not the client sent away to wait in another corner of the banking hall.

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If that additional expertise was not available at that time then maybe the client could be taken to a comfortable area given a cup of coffee and a newspaper to read, and as soon as the expert was available the second point of contact could brief the expert and introduce them to the customer.

They can get straight to resolving whatever problem the customer has. A record of what they have done with that customer should be given to the customer along with contact details for the appropriate banker and a log entered into the CRM system.

If that customer a few days or weeks later either goes into that branch or another branch the contact can be continued form the point at which they left it, they do not have to start again.

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The customer centric process I have described here not only has more chance of fulfilling the functional and rational needs of the customer but also emotionally meets if not exceeds the customer expectations. We have made the process as customer friendly as possible; we have eliminated excessive and frustrating waiting times and placed the customer in a comfort zone as well as demonstrating our inherent professionalism.

There is no reason that the customer centric process should be more expensive to administer, and the results will be a customer or potential customer in who we have started the process of creating trust and confidence, and because we have had multiple sources of delivery we are creating that trust at a corporate level.

If there is a personal banker for this customer, that banker or team of bankers once they are alerted by the CRM system and / or colleagues now has a legitimate reason to initiate contact. Banks have the tools, they often have the expertise on hand, what they require to build customer loyalty and trust is the motivation to meet customer needs.

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