Today, one can find banks catering to retail products and businesses virtually everywhere. With so many public sector and private sector banks in business, there is no lack of players. Most of the banks have identical products and even pricing - give or take a few basis points differences. As soon as any bank introduces an innovation in their product, the competitors start introducing similar products or variants.
This leads some to believe that there is virtually nothing to differentiate banks. I had once heard a senior banker comment "Banking has become a commodity business". He felt that price is the only way to compete and grab market share. What he did not state / realise is that customers look for two things - price and value for money.
There is one category of customers who are very price sensitive and will always go for the lowest price. However, most customers also deeply look for quality of service. Over a period of time, if customers realise that they are getting poor quality of service, they will start gravitating towards the bank that offers better value for money and may even be willing to offer a premium pricing for service.
So, what are the things that give value to the customer? I list below a few key service factors - the list is not a comprehensive list as they customer expectations and aspirations keep going up. The key service elements include:
(a) Transparency of dealing
(b) Speed of response
(c) Recognition of customer
(d) Convenience
(e) Courtesy
(f) Integrity & Fair play
(g) Security
(h) Care for customer's interests
(i) Comprehensive coverage of needs
(j) Reliability
(k) Record keeping & documentation
(l) Reasonable cost
Banking in essentially a service business. Banks which are able to offer a wide range of products and at the same time are able to offer high quality of services at reasonable cost are the ones who will attract loyalty and market share.
Customers do not get carried away by advertisements and brand building measures which do not get reflected in the bank's day-to-day behaviour. They also do not get attracted by smart or popular brand ambassadors lavishing praise on the bank. Customers do reflect on their individual experiences and moments of truth and pass it on to others by word of mouth or by sharing it in blogs / Internet sites.
Any investment in understanding customer needs, finding out gaps in the bank's service offering, putting systems / processes / technology in place to address gaps etc. will have huge paybacks in form of customer delight and retention. Banks also need to work towards creating a culture of service within their organisation in order to remain competitive in the long run. Training, rewards and recognition for service orientation, exemplary action against non-conformers etc. are all useful methods to achieve this.
Often, the difference between the leading bank and the others is this service orientation.
I would love to hear your views on this blog. Please feel free to leave a comment on the blog or send me a mail at vish.sesh@gmail.com and I will quickly respond.
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Dear Sir,
ReplyDeleteI have whole lot of instances to give you.. probably because I face customers directly...
While reading your blog on service these two customers came to my mind and thought of writing it to you about them.
1) This customer was a practicing Eye Surgeon. His age is 85 years. His wife is a physician. Both are very healthy. When he walks into the branch unless informed no one can say his age is 85 years. He has some deposits with us. ( Though a very small amount because at this age when his income sources are very few he definately would go for banks / manufacturing units giving security and higher returns. ) But over the period of time he has developed some sort of trust in me (which I cannot figure out when and how). Whenever he receives Adani Gas bill he simply walks into the branch. Gives me a blank signed cheque and requests me to fill it up for him and drop it in the drop box. His expectations are so high that he thinks I can solve his dispute over the bill with Adani Gas. I have explained him many times that this needs to be resolved with Adani's but again a bill comes and he walks on to my counter just with the expectation that if I put efforts I can solve it.
Not only this.. once some ecs of SBI bank account returned. Instead of asking SBI why this has returned he came to me saying If I go there they wont give me proper answer I wont understand hence I have come to you to ask why it has returned. He was so satisfied with my very simple reply that he commented " Itna easily mujhe SBI mein nahi samjhate"
Whenever he has to go for some investment he comes to know our bank rates and investment options.Only if he is not convinced he prefers to go to another bank.
I think this is pure sensitivity and human touch to customers requirements which can turn to customer delight..
2) Another example again a senior citizen ( dont remember his exact age) but he is quite ill. He is hardly able to walk.. If he has to come to the branch he needs two helpers.
He has a handicapped son who is quite intelligent and wife. I have seen him slowly closing all the other bank accounts and consolidating the funds to our bank because he feels I am able to understand what he is talking ( because due to his age it is extremely difficult to understand what he is talking. Infact to make him understand something I have to be very loud and clearly audible to him.) He still walks into our branch for all those small requirements like on valentine day he wanted to gift gold coin to his wife. He came to me and inquired about the price. Though he knew our rates were higher than the market rates he was ready to pay for it just because he had that confidence in me saying - You are giving me . it will definately be pure.. IN the market you never know about its purity - Kya pata mujh budde ko dekh ke ulloo bana de"
I think this is merely level of trust he has developed in me.
Such moments of truth actually work wonders for the bank. But with mass banking quality banking gets lost.
Regards
Hi Vish
ReplyDeleteNice bolg. Today banks don't realize that acquiring a customer isn't just banking. When the customer exits a banking relationship (mostly loans), then the true colours of that bank are revealed. The customer is made to run from pillar to post whenever a loan is foreclosed and the NOC / Lien documents are to be retrieved. The same is the case when the communication address is changed. I hope today's bankers realise this and ensure that even a customer exiting a relationship with a bank would be a brand ambassador.
Cheers
Ajay Kamath
"services" - given by bankers..
ReplyDeleteme keep my mouth - ShUt..
Hi Sir,
ReplyDeletemesmarising thought from a seasoned banker!!.
I mailed my specific thoughts and comments to your linkedin account.