Craig Metz, the marketing chief at United Community Banks (UCBI), says that until a few years ago, his bank's staff was doing only a "so-so" job of listening to its customers. Employees were not properly trained to pick up cues, so opportunities to cross-sell products and services were often missed. "We just didn't say to customers 'here's a solution to consider,' or 'can we set that up for you today?'" Metz says. "There was no closing. The customers just didn't feel like we were connecting the dots."
That changed, though, after the Blairsville, Ga., company began partnering with Customer Service Profiles, an Omaha, Neb., market research firm that works with banks to help improve service and drive sales. Following a program that relies heavily on customer feedback, the bank has sold 180,000 new products and services to existing customers over the past three years "even though we were in the middle of a recession," Metz says.
Moreover, as engagement with customers improved, customer referrals increased. In the same three-year span, United has generated just under $1 billion in new core deposits and increased its market share in half of its markets, Metz says.
"It's really about listening to the customers and providing solutions that are improving their lives," he says.
Dedication to improving service is nothing new, but it has perhaps never been as crucial to banks' bottom lines as it is now. With persistently low interest rates squeezing margins like never before, banks are under immense pressure to make up for the lost income by selling more fee-based products and services. At the same time, though, opportunities to strengthen relationships are dwindling as more customers bypass the branch in favor of online or other delivery channels.
"Customers are coming into branches less and less," says Steve Kutilek, president and CEO of Customer Service Profiles, which has roughly 125 banks as clients. "So it's important when a customer does come in that they are trained in engaging the customer in a conversation to respond to their needs."
To help improve their service, many banks now are asking customers every year for direct feedback, and even tying employee compensation to the results. The goal is to go beyond just calling the customer by their name. Bank employees need to understand and accurately complete a customer's requests, be efficient with their time, and listen carefully so they can recommend and follow-up with solutions that solve a customer's problem, Kutilek says.
Customer Service Profiles, which serves only the banking industry, has seen a 45% jump in the number of banks using its "Voice of the Customer," program in the past year. Under the program, a bank gives the company a list of its customers and Customer Service Profiles solicits feedback each time the customer visits a branch.
Roughly 90% of the customer evaluations are the same among all banks with 10% of the questions unique to the individual bank. The customer questionnaires are measured and tracked-about 35% are filled out online-and banks are scored against a benchmark of their peer group.
Most of the questions are fairly basic. Did the employee respond to your needs? Did he recommend other products and services? But the very fact that the answers are being tracked is forcing the banks to step up their service.
The $6.7 billion-asset United now conducts 5,000 customer evaluations a year using a random sampling and uses the results to better train its employees. For example, if a customer mentions that her daughter is heading off to college in a year, a bank employee needs to respond by suggesting that the customer consider a product like a home equity loan.
"We think we've cracked the code," says Metz. "We were trying to put a sales culture inside a bank but do it in a way where the customer said we provided a high level of service. All of our products are intangibles so we need to think about what the customer needs."
The $17 billion-asset Astoria Federal Savings in Lake Success, N.Y., pays $5 to anywhere from 1,000 to 1,500 customers that participate in a rate-the-branch customer survey over a six-month period.
Each bank branch is rated 36 times a year by customers. The results of the customer surveys are tied to employee incentive pay "so they have skin in the game," says Brian Edwards, an Astoria executive vice president and managing director of retail banking.
Measuring customer service is one of the few ways to hold employees accountable for the right behaviors, he says. Employees at branches that score the highest in customer service share a cash payout while those that score below a minimum threshold get nothing.
"Banks tend to focus on delivering quality service but never define what that means for employees and for customers," Edwards says. "I'm looking for ways to make customer service tangible and valuable."
A jump in core deposits is one indication of how Astoria gauges its results, Edwards says. Low-cost core deposits made up 58% of total deposits at June 30, up from 40% in the first quarter ended March 31.
It also looks at referrals. In a recent survey, 75% of customers said they were "highly likely" to recommend a family member or a friend to Astoria. It also looks at measurements such as first-year attrition rates.
"It is my belief that the customer measurement program is a big part of the results because we can also see a direct correlation between branches that generate strong sales results and strong customer service results," Edwards says.
Customer Service Profiles' Kutilek says banks need to pay particularly close attention to new customers.
"The trickiest thing for a bank involves keeping new customers moving forward," he says. "First-year attrition is a key loyalty point because if you can keep customers past that first year, you really have a chance to make some money with them. That and customer retention drop directly to the bottom line."