The Bankwatch

Tracking the consumer evolution of financial services

Web presence reflects a significant opportunity to improve loyalty

Web presence reflects a significant opportunity to improve loyalty. That’s what I infer from this detailed survey of several industries call centres.

Forty-two percent of banking customers who call the customer service center try to solve their issue via another channel first, the vast majority (90%) of them going to the website before calling.

Source: CFI Group

Banking call centres fair much better than most, ranking right behind retail catalogue centres, and much better than cell phone companies.

• Catalog Call Centers: 80
• Banking Call Centers: 77
• Cell Phone Service Call Centers: 69
• Cable and Satellite Television Call Centers: 68
• Insurance Call Centers: 68
• Personal Computer Call Centers: 64

But the theme is that people call the call centre after exhausting the opportunity online. People want the answer online. Its dangerous to rely on the call centre as a last resort, rather than addressing root cause of service issues.

To understand past behaviours, we asked customers if they share their experience with the call center with other people. Just over half (52%) of the banking customers say that they shared their experience with the contact center with other people, and it’s not the good experiences they’re sharing. Customers with bad experiences are significantly more likely to share the experience with others; and they are also less likely to recommend the company overall and are less likely to continue doing business.

Despite being 2nd best in class, its worth noting the percentage considering leaving is high.

Based on their experience with the call center, 20% of the banking customers either plan to no longer do business with the company or are not sure if they will. This is the lowest defection rate of any industry, in other words, banking customers are less likely to defect based on their experience with the call center than are customers in other industries.
Still, 20% is not an insignificant number. When nearly one-fifth of all callers are considering leaving, substantial room for improvement exists.

Lastly this comment from the report is telling. Retaining customers by high switching costs is a traditional bank strategy, but as switching becomes easier, and banking costs and comparisons become more transparent, the power in this approach will wane.

At the same time, for many customers the switching barriers are quite high. It’s not easy or desirable to change, especially if a customer has a long relationship with a bank or multiple accounts. If you have one bad experience with the Gap, you might never shop there again; there is virtually no “switching cost” to the customer. However, if you have a bad experience with your bank, you’re likely to give them another chance to save yourself the trouble of converting all of your accounts.

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Written by Colin Henderson

June 20, 2007 at 22:39

Posted in Online Banking

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