Long-gone are the days when customers would stick to the same bank for years on end, simply because they couldn’t be bothered to go through the arduous process of switching. These days, customers can move all their accounts within a week, without fear of financial disruption.
Switching insurer or mortgage provider is just as easy. Comparison websites help consumers find the best rates and deals on a range of financial services in minutes. But not every firm can afford to compete in terms of price, and a low rate doesn’t necessarily inspire loyalty; recent research shows they are often unhappy with the service they receive. So, what can financial businesses do to retain customers who are considering switching?
The finance industry is facing a customer service challenge. The Missing Billions report, from Jacob Bailey Group, claims credit card and car insurers would receive an additional £4.6 billion from existing customers if they felt valued by their provider. Additionally, more than a third (37%) of bank customers say they do not feel appreciated by the provider they’re with.
The report cites several reasons for this poor sentiment, but it seems the heart of the issue is that financial brands just don’t know their customers well enough. Customers want a service which understands their individual circumstances, and can provide relevant, helpful information.
Customers who have little or no relationship with a brand are unlikely to stick with them. After all, customers may be entrusting their life savings, their home or their pension to your business. If they don’t feel comfortable, they will go elsewhere.
According to EY’s 2016 Global Consumer Banking Survey, only 40% of consumers completely trust their primary financial services provider. Our latest report, The under-35s and how they view British Banking, revealed that up to 40% of young banking customers feel they are not heard and nearly half say they have little or no engagement with their provider. No relationship = No trust.
Due to the value and sensitivity of the assets and information financial firms are responsible for, reputation has a massive impact on whether customers choose to do business with them or not. Serious incidents, such as ethical scandals, stability rumours and data breaches, can be the beginning of the end for financial firms; even those that previously had an excellent track record.
In 2013, Co-operative Bank’s reputation was severely damaged when it became mixed up in a drug scandal, and the company’s financial weakness was revealed. To date, this loss of trust has cost the bank more than £2.6 billion in losses.
While crippling incidents like these are rare, it’s worth keeping in mind that any dent to your reputation can cost you customers. A bad experience is unlikely to be kept it a secret for long, and in todays’ hyper-connected world, it’s easy for customers to tell friends and family about their experience. They may also write a negative review or share their story across their social media channels. Worst of all, that customer will likely never do business with you again.
It’s clear that great customer service could make all the difference to financial firms, particularly those struggling to retain their existing customers. Fortunately, there are several things businesses can do to improve their customer service offering.
The first step to providing excellent customer service is knowing who your customers are, and what they expect from your firm. The best way to find out? Ask! Collect feedback on your service from customers who have put it through its paces. To narrow down where the real issues lie, set up several review campaigns for different parts of the customer journey. For example, you could ask them for feedback at different milestones: opening a bank account, taking out a loan, or using a business service, to see whether this process is as smooth as it should be.
Collecting your customers’ opinions at various stages allows you to identify what your firm is doing right, and where it needs to improve. Moreover, positive feedback from fellow customers in genuine reviews is the single most influential factor when consumers are searching for a new financial service provider, according to our research, so you could gain new customers, too.
Nearly a fifth of financial service customers say their provider doesn’t communicate with them enough, according to the Missing Billions report. That doesn’t mean, however, that customers want to be spammed with pointless emails and letters about products they’re not interested in. They want all communication to be personalised to them and their individual circumstances. A business owner will have very different needs than a student, for example.
Segment your customer lists and don’t just send them sales collateral. Let your customers know when their mortgage deal is coming to an end, and if there’s a better rate available to them. If they’ve just changed their address, ask if they need any help arranging house insurance. These small but meaningful interactions can boost customer retention.
Your customers may need to contact you in a number of ways, so make sure your firm is easy to get in touch with. If you haven’t done so yet, extend your customer service team to social media. That way, they can respond to immediate enquiries from current and potential customers, keeping them happy. Consider implementing a live chat option too, for customers who don’t have time to call.
Ensure your customer service team is trained to deal with a wide variety of enquiries, from angry complaints to those who aren’t sure what service they need from you. Be sure to monitor the amount of time customers are waiting to speak to a member of your customer service team, too. If the wait is too long, customers will begin to feel frustrated, unappreciated and may move to a provider with a better customer service team.
Consider investing in more customer service employees to reduce wait times, or implement chatbots and a robust FAQ, to reduce the pressure placed on your staff, especially during busy periods.
In a sector that’s so often criticised by its users, financial firms have a huge opportunity on their hands. Excellent customer service can be the perfect differentiator, especially if your firm offers the same products and benefits as your competitors. The Open Banking initiative is making it easier for unhappy customers to switch financial providers, so there’s no better time to improve your service.
Our latest research report, which covers how millennials feel about the current banking industry, is out now. To find out more and get your free download, click the button below.
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