A bank recently announced that it is to scrap bonuses based on sales and instead, reward good service. What impact is this likely to have in the short and longer term? Asks Simon Conington, MD of BPS-Europe and Chair of the Engineering and Technical Group at REC.
“This is an exciting proposition. The first bank to really make the change, as opposed to just give lip service to it, will become known as the bank that puts customer service first. It will be an important milestone in the banking industry and one that will hopefully be replicated by all the banks. This is exactly what happened to Volvo, who became known for safety in the car industry. The rest of the industry then followed their lead but it is still Volvo that everyone immediately associates with car safety, because they were first. Customer service should now be a key priority in all customer facing businesses. Too often this has been a lesson that has been learnt too late by companies, but without customers you have no business. The banks have a bigger job than most to regain ground but I do believe this announcement is a big step in the right direction. The banks need to engage the customers better, allow them to have a voice in how they carry out their banking needs and to ‘feel’ like they’re the most important part of the bank. How do they achieve this? If you want to change your focus to the customer experience, then you must find ways to actively listen to your customers’ wants, needs, praise and criticism. It’s an accepted wisdom that every person who receives bad customer service will, on average, tell another 12 people, but rarely take the time to inform the service provider. Negative feedback from a customer should therefore be treated as a valuable insight into the customer experience, and the complainer should be listened to very carefully. But if you get no negative feedback you cannot assume that everything is good. You need to be proactive about finding out and consider using services such as ‘Mystery Shoppers’. A key change for the banks will be to ensure that their pay rewards customer service. Most people don’t like being given the ‘hard sell’ when trying to conduct their daily business. Ask yourself this; would you rather use a bank that appears interested in you as a person and in your needs, or a bank that is clearly motivated by how many ‘extra services’ its staff can sell you? Bonuses based on sales will never sit well with customers. The bank with a reputation for service will quickly gain from customer migration.
Changing the focus will also change the type of people the banks recruits and retains, from sales people to those who care about delivering customer service. As soon as one bank establishes a reputation for service the bank will attract people who want to have that on their CV. Those employees with the insight to see the benefits of such a shift of focus away from sales, will, I’m sure, enjoy an improved work experience both customer facing and internally. Change can be hard, especially when a business or sector has operated in a certain way for a number of years. But failing to change, when change is needed, is often the most risky policy of all, as many high street retailers are now finding out. Change can be exciting and present new opportunities that would never have been possible if the change had not happened. If the banks have the courage to make this change ‘hard and fast’ then there will be some pain and an immediate dip, as employees adjust and some leave. That is to be expected when changing the focus of any business. However we will then see a steep curve of acceleration out of that dip. I’d advise the bank to be brave, stay focussed on its goals and objectives and really go for it.