The feedback economy is largely linked to the restaurant and travel industries but banks could benefit from taking it more seriously, writes Brian Caplen.

The internet gives consumers the freedom to vent their opinions on service whether positive or negative and express their likes and dislikes. Restaurants and hotels already understand that whatever is said about them on sites like TripAdvisor, is crucially important to their business.

In fact, most service businesses from airlines to taxi firms now use customer surveys by email or text message to find out how they are doing. They realise that nothing succeeds in business like a positive recommendation from a happy customer – contributing to the so-called net promoter score.

Banks have been slow to pick up on these trends although there are plenty of third party surveys of banks comparing product and service levels. The challenge is to improve customer service before the third party surveyor reports your failings to the wider public.

Going forward there will be new formats for customers to read opinions of bank service and most potential customers will read them before buying any product from a bank. The time to act is now.

As banks are not universally adored it’s clear that for the industry to gain from customer feedback, the survey form will have to be very well designed. Many consumers will only be motivated to review a bank when they already feel they have been let down by poor service.

Feedback forms need to be short and simple. If a consumer has a problem with an online deposit account they don’t want to be forced to review in-branch service, the mortgage application process and a whole of lot of things that don’t interest them. Many surveys are uncompleted because irritation over one failing turns into anger at a tiresome feedback process.

Most consumers are happy to rate a limited number of aspects of a service out of five. Any more than that and it becomes a chore. Is it worth a 7 or an 8? Who cares?

Good survey forms give space to the consumer to write freely about what actually concerns them rather than purely what the bank wants to hear about.

The absolute mistake to avoid is the automatic telephone survey – it’s bound to be a bad time to call and annoy the customer.

Hugely important to bank customers is how quickly and efficiently a complaint was dealt with and speed of decision making over granting of mortgages and loans. These are the aspects of banking it’s worth getting feedback on with the ultimate aim of getting the service right. Turning someone down for a loan quickly does not necessarily alienate them. Similarly, approving someone for a loan after a long drawn out bureaucratic process does not make them a fan.

If traditional banks start to get these things right they will do better in fighting off the threat to their market from the fintechs. Clever use of surveys will help. 

Brian Caplen is the editor of The BankerFollow him on Twitter @BrianCaplen

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