Customer complaints cost banks dearly in loss of loyalty and client profits. In some cases the banks only have themselves to blame for encouraging thoughtless responses to customers’ concerns.By Chris Skinner.
The head of a major bank’s customer complaints division tells me that the average bank with 10 million customers loses more than £100m a year due to customer complaints. That is the cost of the loss of customer loyalty and, more importantly, the loss of customer profitability. The loss of profitability is caused by disaffected customers who run latent accounts or regularly query their account, which causes more work. The issues that create the losses are common to all banks and the solutions are simple, so why have banks not learnt the lessons?
As an example, a customer noticed an incorrect credit to their account and so called and wrote to the bank to notify it. Here is the letter the bank sent in return. “I note that you asserted that the money was not yours and that we managed to convince you that the money was yours. I apologise for our mistake in convincing you that the money you knew not to be yours was yours. The fact is that you were correct and we were wrong. We would therefore like the money back. John, customer relations adviser.”
That is a real letter from a real bank. The problem is that there are millions of Johns in thousands of banks around the world whose role at work is not to think.
Case in point: one bank’s head of customer services tells me that the bank had trained an army of “box tickers and button pushers”. The reason is that the bank was so afraid of staff messing up that it did not allow them to take any initiative. Everything they could say or do was documented or automated. The end result was a bank staffed by automatons rather than humans. This appears to be a mass indictment of our industry.
Is there a solution? Yes: let your staff respond to the customer. If the employee who is dealing with the customer cannot make a decision, what is the point of letting them deal with the customer? If the customer wants a resolution, make sure the person they deal with can resolve their problems.
All that is needed is to break down a few barriers, provide staff with support to take initiatives, tell them to act in the interests of both the bank and the customer, and create the environment in which they can make decisions without being afraid of messing up. The number of times your front-line staff get it wrong will be minuscule compared with the £100m you lose each year because they cannot deal with the customer effectively.
Chris Skinner is an independent financial commentator.(www.balatroltd.com)
