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Stem Customer Attrition by Humanizing the Banking Experience

The top reason consumers leave a financial institution is due to subpar service. Thirty-seven percent of retail bank customers said so in a 2010 survey conducted by J.D. Power and Associates. This percentage grew to 48 percent in response to a 2011 Ernst & Young survey. Not only is customer attrition a growing issue for banks, but so is gaining an increase in share of wallet. Forrester research found that although consumers on average own nine financial products, they only obtain 2.5 of them from one institution.

The fact that service improvements help banks repair both perceptions and profitability is borne out by research from Bain & Company that found financial institutions with high loyalty have a 10 percent higher growth rate than those with lower loyalty. Contributing to this growth rate is the willingness of consumers to spend an average of 9 percent more when they recognize service excellence. The silver lining is that nearly half of banking customers asked say they’ll stick with their current bank, regardless of what may come. But that still leaves the other half that may be swayed to switch and the opportunity to up and cross-sell.

Banks and Customers Don’t See Eye-to-Eye

In order to curtail attrition, bank executives and employees need to move beyond their gut assumptions to considering the reality of how customer preferences and expectations have changed. A lack of alignment with these shifts will only continue to contribute to advancing attrition—and the gap runs deep.

A comparison of perceptions from a survey conducted by Convergys identified conflicting views in several critical areas:

· Customer service: 80% of customers say service is worse—92% of executives think it has improved.

· Understanding needs: 57% of customers say there’s a lack of understanding, but 100% of banking executives think their organization does understand its customers.

· Response to feedback: 53% of customers say their banks don’t act on feedback, but 100% of banking executives think they do.

The result of these disconnects with customers leads to lower trust and credibility for the financial institution. This being said, there’s a huge opportunity to leverage the call center to repair and reverse these issues. The call center is the most utilized service channel—by 76 percent of Baby Boomers and 56 percent of Millennials. Humanizing their experience will go a long way toward rejuvenating customer longevity.

Make the Call Center the Centerpiece of Customer Strategy

Given the challenges presented by changing customer preferences and concerns, elevating your call center agents to a more strategic role that allows them to educate, communicate, and connect with the qualities that consumers’ value. As banking customers struggle to save, exploit financial opportunities, and gain better control over their own finances, information can become a primary differentiator when provided as a personalized response to their inquiries.

Banking customers have indicated that they’re receptive to information on new products and services that can help them reach their financial goals. In fact, many of them actually remember receiving such information from their banks and 22 percent have taken action in response. However, there are also nine percent that say their banks have not been helpful in this regard.

The desire to be heard and receive knowledgeable responses that resolve our situations is common across all consumers. The fact that banking customers rate it as their top priority when bank executives think it’s the brand that carries sway must be overcome. Not only are contact center agents in a primary position to provide better service, understand customer needs, and provide personalized responses to customer feedback, they can also serve to inform company strategy based on front-line experiences.

Empower Agents to Humanize the Experience

First, remove the basic and easy questions from clogging the queue by creating self-service answers to FAQs and informational needs. This allows you to elevate the interactions of call center agents to a more strategic role that produces a higher return on their involvement.

For the contact center to play a pivotal role in customer strategy and experience, agents must have the appropriate tools and training to represent and explain products and fees in the most understandable manner. Agents who are empowered to resolve issues and who have the necessary supervisory support can have a dramatic impact on customer retention rates and profitability.

With training and coaching in place, you can eliminate the constraints placed on agents that have them come across as robotic and superficial. This doesn’t mean removing processes, but freeing them from scripts and time constraints that add unnecessary stress and pressure to how they do their jobs. Allow their personalities to shine through based on customer needs and consider the idea that focusing problem resolution and customer satisfaction can produce higher returns than traditional metrics, such as reducing average handle time.

Serve People, Not Products

Although the goal is to increase the number of products held by each customer, focusing on the products before the person will not accomplish the objective. A terrific example of the success of this approach is presented in an interview with Jim Bush, EVP of World Service at American Express. His belief was that more human engagements created through less-structured conversations would pay off. And it has; “Customer spending is up, attrition is down.”

By changing the view of the call center as a cost of doing business to an investment in building relationships, Bush transformed the customer relationship by proving that higher satisfaction is directly tied to higher spending. Perhaps it’s high time for financial services organizations to start serving customers rather than handling transactions.