Poor service or poor rates - West explores whether banking customers have any choice?

Santander, the Spanish banking giant which bought Alliance and Leicester in 2008, attracts customers by offering some of the best rates on loans, credit cards and current accounts.

But as reported here, its customer service leaves a lot to be desired, with 62 per cent of its account holders stating they receive poor support. 

The correlation between financial incentives and the quality of the call centre becomes even clearer when you see that First Direct and Co-op, which have less competitive rates, offer the best service. 

Is this an inevitable situation?  Is the choice that stark; banks find the money to invest in service by offering poor rates, or offer good deals for customers but then offer cheap and nasty service? You could argue that this is a classic case of ‘you get what you pay for’, but what it really indicates is that the banking sector is really immature when it comes to customer service.

Banks are clearly still stuck in the mindset that service is an after-thought add-on which must be dutifully addressed as an obligation. It is not just Santander that is at fault, over half of HBOS customers rate their experience as poor, with 41 per cent of Barclays and Lloyds TSB account holders reporting the same negative score.

If the sector instead took a more progressive view, using customer interactions as an opportunity to sell the brand and its values, they could drive new business and suddenly the call centre stops becoming a cost and instead can refer to its tidy contribution to the bottom line when attempting to attract investment.

The problem is that banks don’t think like other commercial organisations, so the idea of building a brand and embodying ideas that might appeal to customers is alien to them.  Until the sector shakes this mentality and realises the potential to differentiate that good service offers, customers will continue to suffer with poor service.

Marketing people often make statements generously laced with hyperbole housing a badly-hidden agenda.  Therefore, the quote from Jason Mittelstaedt, chief marketing officer for RightNow that ‘service is the new sales’ would ordinarily be treated with extreme caution. 

However, upon reflection, this expression does sum up the entire change of emphasise we are seeing in the customer service space. 

For years, justifying investment in call centres service has been a battle, with those who champion the function forced to produce numbers which show the link between quality of service, and the time and money spent. Because most businesses operated the same way - with a cheap and cheerful call centres used only to field pesky customer queries - standards and expectations were very low.

Customers didn’t expect too much in the way of post-sales support, and even if they did grumble, the scope of their anguish was limited to a handful of disinterested friends. Therefore, businesses could focus their spending on elaborate and sexy advertising campaigns designed to woo customers, safe in the knowledge that once people were hooked, the job was done.

Fortunately, these rules no longer apply. We all now see how social media and web-based forums are giving a voice to the customer which collectively is hugely influential. Look at the fuss caused by the small percentage of Apple customers regarding reception issues with the iPhone4, Apple was forced to hold a press conference explaining the issue and instigate a huge programme of issuing free cases to all customers. This would not have happened ten years ago and is a vivid illustration of how customer service matters.

Cross-reference this information against what is happening in the world of advertising, which viewed which has become so frequent in our multimedia world that the messages businesses are trying to put across have been rendered pointless and in many cases, lost altogether (Sky+ customers know this best - once you realise you can fast-forward the ads, you never go back). 

As Mittelstaedt says, no one wants to be marketed to, or sold to. However, everyone likes to be treated well as a customer and this is where call centres will play an ever growing role. 

Customer service can no longer be treated as an after thought because service, once the poor relation, third in a pecking order behind the sales and marketing departments, is know out on its own as the most important department and with the call centre at the sharp end of the all important interaction, means it has a bright future.

Ladbrokes may have saved its call centre, but West says it has missed the point of why phone support is so valuable today.



The news that Ladbrokes is training its shop workers to field phone calls to avoid outsourcing its call centre is of course good news, but also a back handed compliment of the worst kind. 



By classifying call centre work as a time filler - something to occupy those moments when there is no proper work to do - devalues the call centre as much, if not more so, than outsourcing it for pure cost reasons, as William Hill has recently done.



Some will argue that the nature of inbound calls fielded by a bookies are likely to be predominantly transactional and therefore not worthy of a major investment. This perception should be challenged on two levels.



Firstly, using human beings to process transactional queries is inherently inefficient. The proven maturity of web-self-service using smart FAQs and delivery of contextual support information is an extremely effective way to deflect huge numbers of queries.

If you add email automation and assisted service through chat, it is possible to virtually half the workload, while providing a 24-hour, instant service to customers. Any call centre which is being considered for outsourcing should consider developing their capabilities in this area before any other radical step. 

The second reason to question the Ladbrokes approach is it assumes that phone support is a transactional obligation which must be fulfilled. It is a common mistake, but there is a growing number of businesses that treat phone calls differently, viewing them as the best way to interact with and influence customers jaded by the constant bombardment of advertising we are all subject to as consumers. 

Phone support used to be about cost. Today, it is about talking to customers and proving that yours is a business that cares. By all means, provide efficient self-service, but don’t forget the phone call, and certainly don’t treat it as a task that anyone with some basic training can perform well.

All of us with a vested interest in the call centre industry should watch closely developments at Metro Bank, which has opened its first London branch this week.

It is well known that Metro is the first new UK high street bank for 100 years, and commentators on the launch are quick to point out why - because people won’t change banks. A survey by uSwitch earlier this month supported this idea, stating that just 36 per cent of people will consider switching banks, despite the widespread distrust of the incumbent suppliers intensified by their perceived role in the economic downturn.

The founders of Metro however think that people will switch if a viable alternative is offered, and they believe the key is offering personal, high quality service. And they really are putting all their faith in the customer experience, as early reports suggest that their interest rates and loan terms compare poorly with the competition. The belief however is that customers care less about a few percentage points and more about being treated well (some early encouraging signs in this video, with one chap interviewed perfectly embodying the idea of what Metro is striving to do).

If Metro keeps its profile high, sticks to its principles and succeeds in stealing customers, it may cause the big banks to re-evaluate their operating models. If its radical moves such as rewarding its staff for service rather than sales, opening on Sundays and promising a warm welcome are vindicated, it may shake up not just the banking market, but help usher in a new era for customer service. Businesses may finally see proof that good customer service, whether it be delivered in a branch, or online, or through a call centre, makes or breaks them. If this occurs, and it’s a big ‘if’, the call centre may be a major benefactor of this new mood; finally supported and treated with respect by business leaders.

However, if Metro succeeds only in becoming a niche player (such as First Direct), or fails altogether, it may enforce the still too widespread belief that customers will moan about bad service, but doesn’t convince them to take their business elsewhere.

If you showed a person living 100 years in the past the wealth of luxuries that their future counterparts (e.g. us) would enjoy, would they think our lives more trying or easier? It is likely, upon seeing and understand the purpose of dish washers, online shopping and delivery, washing machines, reliable personal transport and mobile phones, that our ancestors would wonder what we did to fill the hours in our day.

The reality of course is that our lives have inexplicably become more complex. Back in 1910, people went to work, stayed their allotted hours, returned home, made food and went to bed. Now, we go running at dawn, cook a balanced breakfast/packed lunch, attend a school concert, work for a few hours, meet friends for lunch...you get the idea.

Whether you agree with the increasingly hectic nature of modern society or not, it is inescapable fact that our jobs are often incompatible with our lifestyles. Rigid working hours are simply not the preferred way that anyone works now, and although you can conservatively fight this notion, it won’t go away.

Take a look at this survey by Aon that shows the financial cost of absenteeism - an issue especially pertinent to the call centre industry. Many people believe that like high attrition, frequent sick days are an unavoidable part of running a call centre. The job, they would say, is stressful and repetitive and people will use any excuse to have a day off or move to another career. However, the Aon survey shows that for almost a third of workers, the promise of flexible working and social days off would be sufficient for them to call in sick less.

This is because that as already outlined, people lead busy lives and often have commitments or things they want to do which cause them to take sickies. By providing an alternative, not only will the number of sick days fall, staff may also feel better about their employees, which may mean they stay in the job for longer. Call centre work is already a highly controlled function, with strict schedules and provision for overflow and absenteeism already built into its processes. Therefore, extending this structure slightly and allowing flexible working wouldn’t actually be that difficult, but could yield useful returns.