7 Secrets to Providing a Better Community Bank Customer Experience

Technology has done much to level the playing field between big banks and small community banks and credit unions. Digital interfaces are available to every business, regardless of size, which leaves the battle over customers to be fought in a different realm. It is customer experience that is more important than ever, and community banks need to leverage from these 7 secrets, to gain advantage over the competition.

  1. Don’t fear technology.

Big banks have done the hard work of mainstreaming technology, so don’t let this be your downfall. Technology assists in providing customers with the integrated experience they expect from businesses, and your bank is no different. Even the smallest bank or credit union is more than capable of capitalizing on the software that is available in the marketplace.

  1. Unify all touch-points.

The customer experience is not linear. Customers may complete a single financial task using multiple touch-points, and they all must connect seamlessly. Those who use your bank should be able to access their balances easily via mobile app, discuss financial decisions with an expert by phone or at a physical branch, and keep track of their finances on a desktop computer. Every form of communication needs to be instantly responsive to the needs of every customer.

  1. Create a comfortable atmosphere.

Digital components to your community bank are crucial, but the atmosphere of your physical locations still matters. Even as you integrate each touch-point, you  want to avoid making your community bank feel like a sterile government office. When your customers do pop in, they want to feel welcomed. Lighting makes a huge difference, and you could easily swap stiff chairs for comfortable couches and friendly décor.  Some leading institutions are even experimenting with olfactory ambiance to help customers feel more comfortable.

  1. Empower through training.

Staff training is often what makes the difference between a growing business and a dwindling one.  When we interview hundreds of thousands of banking customers, we learn that poor staff training is typically the #1 or #2 reason that people decide to switch banks.   When your employees have and understand all the relevant product and service information about your community bank, they can better serve your customers. Staff should be able to answer customer questions, and with a solid understanding of existing technology, your staff can teach customers how to search for answers that they don’t readily have.

  1. Build a culture of customer service.

When the customer is central to every process, your staff can provide superior customer experience. This tenet starts at the top, with upper-management implementing processes that enable frontline staff to solve issues immediately for customers, rather than always having to refer the problem to a manager.  Our surveys reveal that 27% of customers report getting the runaround when trying to get questions answered.  For businesses, this increases to 35%.  And in both cases, getting the runaround is a major reason households and businesses tell us they might switch banks.  If you prioritize the customer and their experience from every angle, you achieve an approach that naturally eliminates most of the problems they face.

  1. Personalize your service.

Your overall infrastructure may be amazing, but customers need help marrying their needs to your products and services. It is not a case of “If you build it, they will come.”  Community banks are in an amazing position to be able to learn about the unique needs of their patrons, and then provide them with the tools and advice to meet those needs. A familiar smile, remembering their names, and recalling that they are in the process of purchasing a home, for instance, can build lifelong relationships.

  1. Contribute to the community.

The customer experience is driven by your involvement in the community. Many customers want to know that you are aware of what is relevant to those that live there. Sponsor local teams and celebrate regional traditions. Reinforce that you are an important part of the community.  This will improve your own customer loyalty and will actually attract more business, especially from middle market and small businesses in your area.  And do not feel shy about promoting your good works.  Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Community banks and credit unions have unique strengths. If you want to offer a truly impactful customer experience, you have to offer personalization that is also convenient. Your frontline staff must be fully trained and confident enough to offer financial knowledge in addition to providing account services.  Your electronic banking should be an extension of that service, not a replacement for it.   A concerted, thoughtful examination of your processes, and more importantly, an unblinking understanding of your current customers’ opinions of the bank will enable you to excel beyond your peers.

Community Banking Challenge: Anticipating Problems

Although every bank prides itself on customer service, no bank is perfect. Our Benchmarks gather millions of customer reviews across thousands of banks, and on average, 12% percent of banking customers tell us they have encountered a serious issue or mistake with their bank within the past six months. Some banks are higher, and some are lower. None are zero.

The good news is that reacting to and fixing problems is where community banks often excel. The lack of hierarchy allow staff at community banks to address concerns and remedy problems quickly. And our surveys show that, on average, 79% of those customers said that when they told the bank about the issue, they are happy with how the bank resolved the problem. Some banks are better, with several in the Northeast US approaching 95%, while several others are well below 50%. (Please contact CES if you want to know how your customers rated you).

While that is a pretty good resolution rate, resolution is only possible if the customer tells you about the problem.  Unfortunately, not all of them do.

Banks are not always aware of mistakes.

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Community Bank Challenges: What is Hurting Your Relationships?

Community banks should be relationship experts. Smaller branches have extensive opportunities to immerse themselves in their communities, which allows staff to know customers on a personal level. Customers prefer engaging in a friendly conversation with familiar faces to standing at an ATM, so why are people switching to other banks? You could have the friendliest staff in the world, but if you do not understand what is hurting your relationship with consumers, your bottom line will suffer.

Customer loyalty is process driven.

After analyzing the hundreds of millions of data points we collect from customers of small, medium, and large banks, we discovered that difficult processes are a primary point of contention between customers and banks. For example, a customer typically comes into a branch for a reason, expecting help with a loan or other financial document that they cannot complete without assistance. A painful personal loan process can frustrate a customer to such an extent that they look to switch banks. If your branch is unhelpful with common financial needs and questions, the relationship with your customers will deteriorate quickly.

Expectation management is crucial.

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Community Banks: Are Your Customers Cheating on You?

As a community bank, you might think your customer is loyal and devoted. Many of them are, but are you doing everything necessary to keep your current customer from “cheating” on you? There’s more going on behind your back than you might think: 11% of banked adults say they will change banks in the next 6 months. Community banks may find that previously loyal customers are cheating on them with competitors, and it’s not rates that lure them away.

What’s the primary reason your customers are cheating on you? It’s the runaround. Some community banks struggle to answer basic questions, and customers find that they are having to speak to multiple staff to get the answers they seek. For some banks, up to 45% of their customers report getting the runaround from their current bank.

How to Keep Your Customers from Cheating on You

Needless to say, a large percentage of customers are currently shopping for a new bank. For a few high-performing banks, less than 5% of their customers report having to ask multiple staff to get their questions answered.  High-performing banks have much higher loyalty levels, because customers are confident that they can easily access information.

Deliver on customer experience with no runaround.

To keep your community bank customers from slipping away, take the issue of runaround seriously. Make sure your staff is well-trained; increase the emphasis you place on customer service and customer experience. Large or small, a bank that treats its customers like more than numbers on a ledger increases loyalty.

Embrace the digital era.

Technology is essential banks must make available mobile apps and tools that provide ease of use for transactional needs but access to information as well. Delivery channels are expected to be easily accessible, whether the customer is using a computer, tablet, or mobile device. Make sure all the most important information is available to your customers online, through your banking app, and on your website.

Provide a personalized experience.

Although emerging generations may demand enhanced technological capabilities from their community banks, all generations demand a personalized experience. Not only do customers want banks to remember their individual preferences, but they are seeking wealth-building and money-saving tips from their local branches.

Understanding why your customers might be cheating on you is the first step in preventing it from becoming an issue. Build loyalty and strengthen your relationship with your customers by providing them access to well-trained, customer-focused staff; high-end technological solutions; and answers to the questions they ask – the first time.

If you want to know what percent of your customers are cheating on you, and what percentage are currently looking around, let us know and we can tell you.*

 

*Our customer experience benchmarks track the loyalty and vulnerability of every bank’s customers (including the percent that are currently shopping around). If you are a bank or credit union in the Northeast, we already conduct interviews with your customers.  If you would like to see your customer experience results please contact us.

Insights from our Recent Bank Benchmark Surveys

Customer Experience Solutions, LLC conducts a comprehensive scientific statewide survey of banking customers twice per year, in Spring and Fall. The Customer Benchmark focuses on how your customers rate your bank, and how those ratings compare to your competition. The Prospect Benchmark focuses on how your prospects (non-customers) view your bank and how you might gain their business. We gather millions of ratings from your customers and your competitors’ customers every year.

The 2018 results have just come out across the Northeast, and here are some of the latest findings:

  • Technology is becoming less and less of a differentiator. Over time, we have seen customers’ perceptions change as they relate to technology. Five or six years ago, customers assumed there was a big gap between big banks and small banks in terms of technology and the use of digital tools. While that still exists to some extent, that gap has closed significantly. As a matter of fact, in most local markets in the Northeast, there is at least one community bank that is rated higher than most national, super-regional, and regional banks in that market. Contact us and let us tell you if you are that bank.
  • Technology is more about convenience than saving money. While that might seem obvious, it is important to know that banked adults across the region are conducting more and more financial transactions electronically. That does not, however, diminish the importance they place on relationships with the bank. As a matter of fact, this trend toward electronic banking is benefiting a lot of community banks that see it as a way to eliminate the more trivial interactions, and to embrace the fact that the in-person interactions are now much more valuable because they are far more likely to be on a subject that is substantive and truly important to the customer. Whereas most community banker-customer interactions were transactional ten years ago, the majority of banker-customer interactions are now focused on solving problems, planning, or creating greater financial well-being.
  • The vast majority of customers do not want a 100% transactional relationship with their banks. They want proactivity instead. Proactivity is one of the key drivers of customer service in the eyes of customers. They increasingly want a bank that will suggest new ideas and products. And contrary to popular belief among community banks, customers are willing to tolerate a little bit of pushiness from time to time, if they sometimes see the positive outcomes . The key issue is about striking the right balance. For example, in the latest benchmarks for New York State, 9% of customers said their banks were too pushy, but 29% said their banks were not proactive enough. These numbers can vary from bank to bank, so it is important to know where you stand with your customers. But the lesson is clear: Erring on the side of passivity is not a good way to satisfy your customers or grow your market share.
  • Customers need to feel secure. Bank security is a big deal today, so your customers should always know that you are using cutting-edge security protocols to keep their information safe. But you should also make them feel secure in their decision to bank with you by being knowledgeable – not just about checking and savings accounts but about all of their financial needs, from investing to mortgages to annuities. This is very clear from the latest benchmark results in New Jersey. A full 7% of banked adults said that they did not feel their money was safe at their current primary bank. For the banks that ranked higher than this, fixing this perception is a matter of survival.

There is enormous opportunity for you to improve your ability to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.