Redefining Customer Service

You check the mail and find a statement for an account you never opened. Your bankcard doesn’t work at the ATM, and when you cancel the transaction, the machine refuses to spit out the plastic. As soon as you bring it up to a branch teller, you are directed to an 800-number that puts you on hold 20 minutes before you’re abruptly disconnected. If this sounds like a plot for a prime time comedy where the main character gets stuck in a major-league runaround, think again. There is nothing funny about this real-life scenario played out for financial institution customers every day across the country.

Just hearing this makes most people want to yank their hair out, which is just what Patrick Linarducci was ready to do recently after dealing with a large bank-he won’t name the offender-that required a total of six interactions lasting over a half-hour to fix a minor problem.

The problem started when Linarducci inquired about an account balance over the phone. The senior analyst and bank mystery shopper with First Manhattan Consulting Group in New York was “up-sold” on a new savings account that promised to yield an impressive interest rate.

The rep assured Linarducci the transaction would only take “a few moments” to complete and then unexpectedly transferred him to an offshore call center, where he waited on hold for 25 minutes.

The language barrier made it impossible for Linarducci to be comfortable enough to authorize the new account. “The second rep kept referring to my money as rupees and I kept telling him dollars,” he says. “Even though I corrected him, he kept referring to the amount I was going to transfer as rupees, not dollars. We were talking two different amounts.”

Frustrated, Linarducci was blunt with the call center rep: “Do not touch my money.” He hung up and called again two days later to finalize the transaction and complete his mystery shop.

“I was told the first transaction was cancelled and that no funds had been transferred,” he says.

Linarducci agreed to finalize the transaction with the new phone rep, who promised the same interest rates originally quoted. Within weeks, Linarducci learned the first attempt to open the account was successful-along with the second transaction that he initiated days later, causing the bank to deduct funds from his primary account twice.

“When I first tried to talk to someone in-person, they were upset that I wasn’t calling their 800-number,” says Linarducci. “They really discouraged me from trying to solve the problem in the bank branch.”

By the time Linarducci was able to put the whole mess behind him, he had spent countless hours and unnecessary headaches explaining the situation to numerous people at the bank branch and on the phone. “The funny thing is the actual interest rate I received was significantly lower than what I was promised during the initial sales pitch that got all this started.”

A customer service makeover

Eager to win over consumers-and stake a claim to their accounts and financial service business-banks are increasingly making nice. By dumping the stale “post office” feel, adopting a warm retail image-even trendy boutique-themed establishments-and hiring cheerful workers willing to embrace challenges from any department, bank managements are counting on a transformation that will make selecting a checking account as much fun as, say, going to Starbucks and ordering a latté or Gap to pick out a new shirt.

Of course, anyone can build a bunch of fancy bank branches-that’s the easy part. It’s what you do and what you offer on the inside that really counts. Banks are discovering that their biggest weapon in the competition is their brand and personalized customer service, which can’t be duplicated.

A recent study by CIBC World Markets shows that at least 700 people walk into Starbucks daily while the average bank customer visits a branch just 2.9 times per month, according to Synergistics Research Corp. Both offer drive-up service, but the difference is what happens inside.

Diana Oreck, vice president for the Ritz-Carlton Hotel Company’s Leadership Center, says banks can no longer afford to treat customers as if they were just another deposit or withdrawal. “Every time a story of woe is retold, it gets worse,” she says. “You want to eliminate that. You don’t want the customers repeating their tale of woe, because it just becomes more costly to fix the problem.” Instead, Oreck encourages bank execs to think of customers and employees as lifelong clients.

“We tell the banks we work with that they want to make sure they have customers and employees for life. If little Tommy’s mom wants to open a savings account for him, the bank needs to recognize a lifelong customer in Tommy and make sure he sticks around. He’ll be back throughout the years for his banking needs, mortgages, insurance, and retirement.”

Creative thinking

While strict guidelines govern what banks can and cannot do-it’s easy for a hotel company like the Ritz to boast about a $2,000 budget per day per employee to fix any potential problems-Oreck says financial institutions need to start thinking outside the box.

So even if they can’t give away thousands of dollars worth of service, product, or cash to please a disgruntled customer, bank employees should be empowered to make decisions without having to go to a supervisor or pawn off a customer to a call center, reasons Oreck.

“You don’t want to annoy the customers,” says Oreck. “When a longtime client has a request, they don’t want to be told they have to wait a number of days to access their funds or be told to call an 800-number to solve their problem. Look at their account on the computer and refer to the customer by name. Make it personal and try to help them right there on the spot.”

Many financial institutions experienced a backlash during the 1990s when they tried to automate services by leveraging the Internet and ATMs. Many financial institutions closed branches and imposed teller fees, believing that the future of banking rested in electronic banking. Many discovered the hard way that customers actually wanted the person-to-person contact that is impossible through a computer or ATM.

Launched in 2000, the Ritz-Carlton Leadership Center trains executives in health care, real estate, banking, financial, retail, food services, and human resources industries, to name a few. The hotel company began hosting the five-course leadership class after it won the prestigious Malcolm Baldrige National Quality Award in 1992 and 1999.

What can a hotel-or any retailer, for that matter-really teach a bank about customer service? For starters, like hotels, many banks have established a concierge-style service that helps direct customers to where they want to go within the financial institution.

Oreck says banks are starting to think more like retailers: longer hours, friendly-teller training, and a more casual, trendy atmosphere that includes television sets, periodicals, lounge seating, and free coffee.

Cultural exchange

By operating like a retailer, banks are reshaping the banking industry.

Commerce Bancorp is one of the first to adopt the retail mentality and model its branches after successful retailers like Home Depot, Victoria’s Secret, and Target, to name a few. The Cherry Hill, N.J.-based bank offers free coin-counting machines in all of its 330-plus branches, seven-day-a-week banking, free personal checking accounts, and greeters. Also borrowing from the retail industry, the bank measures its success by using mystery shoppers to gauge how well it is performing.

At Umpqua Bank, a subsidiary of Umpqua Holdings Corp., good customer service is part of its corporate culture, says Barbara Baker, vice president for the bank’s Cultural Enhancement Department. At most banks, the “It’s not my job” philosophy often prevents employees from helping customers, but Umpqua execs train every staff member in all areas of the bank. Whether you’re dropping off a $200 deposit or applying for a $200,000 mortgage, every banker can help you.

Umpqua execs wanted to create a neighborhood gathering spot with its branches and make the bank a destination. It serves its own brand of coffee, offers newspapers and periodicals to read, and allows customers to log in at the Internet café to check emails, read financial news, or download songs onto a customized Umpqua CD. The bank even hands out a chocolate with every receipt.

It’s not just the royalty treatment that makes Umpqua so different from traditional banks. The bank even looks like a retail establishment. Products and services are on display throughout the bank so people can view the details. The monthly specials are featured in an exclusive spot in the bank. The bank doesn’t stop there. Many of the bank’s branches keep dog bowls full of water just outside the door for customers with pets.

“The dog bowl attracted more new customers than any advertising plan we could have thought up,” says Baker. “Customers can go out in the neighborhood and stop off at the bank and hang out and not worry about their dog. This is about looking at what the customer wants.”

All these “little touches”-as Umpqua execs refer to it-have added up for the bank. Umpqua has grown from six branches and $140 million in assets to more than 90 branches and $5 billion in assets. Total loans and deposits were $3.61 billion and $3.97 billion, respectively, as of June 30, compared to $3.54 billion and $3.95 billion, respectively as of March 31.

Shining examples

According to Umpqua execs, more than 20 financial institutions from around the world have visited to see how the bank operates. Even Nike is looking for inspiration on its own customer service methods. The shoe company refused to comment for this story, but Umpqua execs say Nike is just one of a handful of companies studying the bank’s culture and customer service policies.

Like the “Uncola” concept that worked for 7-Up, Seattle-based Washington Mutual Inc. set out to be the “Unbank” in the banking industry and became a champion of fun and informal, starting with its nickname-WaMu-all the way to the khaki pants and logo t-shirts worn by its staffers. Its Occasio concept-Latin for “favorable opportunity”-features branches built with circular layouts and play areas where children can have fun while their parents “shop.”

“We did away with the traditional teller windows and high counters in favor of a more personal approach,” says Michael Amato, executive vice president of Washington Mutual’s consumer bank branch network.

“The design of the bank allows customer service representatives to sit with the customer. It allows people to see their information on the computer,” says Amato. “What we’re doing is taking away the barriers and allowing the customer to be a part of the transaction. After all, it is their money, and we’re on their side.” |BD|

Setting the Gold Standard

When it comes to building a great corporate culture and implementing good customer service techniques, Ritz-Carlton’s Diane Oreck suggests the following:

Hire for attitude and train for skill: Anyone can learn the banking industry, says Oreck. But personalities are key to growing a good team.

Tell employees what is expected of them: While a clear definition of their tasks is important, says Theo Moumtzidis, vice president for First Manhattan Consulting Group, he

cautions against training people so that they are too constrained by their roles. “Give them a certain level of power, and trust them to solve problems.”

Give people the tools to succeed: First Manhattan Consulting Group execs say one big mistake banks make is launching services and products that even bank staffers have a difficult time describing. If the bank staff can’t explain it, they won’t be able to sell it.

Reward and recognize performance at all levels: Every week throughout the Ritz-Carlton Hotel Company, employees share wow stories that illustrate good customer service. By sharing these stories, explains Oreck, hotel staffers throughout the world are inspired to carry on the same great customer service that the Ritz is known for.