What Customers Want?

Banks have been trying for years to figure out what customers what and then give it to them. Unfortunately, many times they reached conclusions without asking customers. The best example of such an error was Wells Fargo before the Norwest acquisition. The Company assumed that customers want convenience and speed as their top priority, and optimized to these two variables. They opened many more customer touch points, many at lower costs than the traditional branch, and developed a best-of-breed web-based bank for the ultimate convenience. Indeed, some customers preferred this approach and enjoyed the Wells Fargo ubiquity. Unfortunately, they were only a small part of the general mass market, and those customers had different preferences.

To be sure, all customers want convenience, good price and excellent service. While not all customers share the same definition for each of these variables, the key for banks is twofold:

• Figure out the relative importance of customer preferences
• Execute to solve for the optimal customer experience.

Many SuperCommunity Banks have worked hard to identify what customers really want. This is of critical importance to all banks, but to community banks in particular, because it is a logical differentiation point and potentially a strong competitive advantage against the mega banks. Many community banks have vowed to become more customer-centric, and the first step toward becoming one is to find out what customers expect from their banks. Unlike previous attempts to do so, community banks are asking their customers, as well as their own employees and board members, what would the best customer experience look like. They conduct focus group, telephone interviews and develop a well-rounded view of customer preferences.

The best customer experience varies widely, depending upon the market position and customer base of each bank. For example, price-driven banks find that their rate-surfing customers are looking for price as the first and foremost variable in bank selection. Service levels and problem resolution are secondary. Similarly, community banks that attract longer term relationship-based customers find that service and problem resolution are foremost in customers’ minds for bank selection and relationship retention. While convenience is important to all, it is not the primary variable for most.

The bottom line: we find again and again that our staff makes all the difference. Such realization is important, but until we change the customer experience to ACT on this discovery the information is moot. The problem we face is an age-old issue: the people who touch customers over 90% of the time are our tellers. In many situations there is no real commitment between the teller and the bank: we use many part-timers, we pay them minimum wage and we expect (and get) huge turnover at that level. Some banks have tried to address the issue by creating certification programs and career pathing for tellers that does not require promotion out of the teller position., and few have done so successfully. But most banks, including community banks, have not been successful in solving the teller equation, and, with it, improving the customer perception of service. Banks have been unable to reach the position of a destination in the customers’ minds. They are a place people HAVE to go to, not a place where they WANT to go.

The teller experience is not the only obstacle banks face as they strive to improve service levels to at least meet customer expectations, but it is a big piece of the problem. As we all know, given prevalent and unexpected teller turnover, branch managers are almost always looking for last-minute replacements to their tellers. They end up settling for less-than-perfect matches for their needs, because they need to open the doors Monday morning and are too short-staffed to do so. As a result, the problem persists as a vicious cycle: we hire the wrong people, they don’t pan out, they leave and we end up hiring more people who don’t fit the job because we simply have to.

Solving the staff issue is the first step toward improving the customer experience. It is the people who touch customers that define how our customers and prospects feel about us. If our customers are looking for a knowledgeable, empathetic, 'can-do' problem solver in their banker, we must first populate our banker and teller ranks with folks who fit that description before we can match our deliverables with customer preferences. This is a serious challenge to the retail network as well as the human resources department, but is it a necessary (but not sufficient) condition to turn the customer experience around, and the very first step toward improving customer retention.