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AFTER SALES SERVICE IN BANKING

by Rene T. Domingo (email comments to rtd@aim.edu)

After sales service is an integral part of customer service and a key determinant of customer satisfaction and even competitiveness in any industry, manufacturing or service, particularly banking. Most banks have mastered the art of selling their services or the customer processes 'before sales'. Unfortunately, there is an observed lack of emphasis in banking services 'after sales'. Most banks can easily find models and benchmarks of superior after sales service in manufacturing sectors, like autos and household appliances, and in other service sectors like hotels and airlines. These industries have discovered that excellent after sales service is the basis of customer retention, repeat sales, word-of-mouth endorsement, customer loyalty, and future sales. Lack of it or sloppy after sales service would mean the exact opposite: backlash from current customers as well as avoidance of the establishment and its products by future customers. Survival in the next millennium may depend not only on innovative bank products but also on innovative and responsive after sales service.

Many managers would associate after sales service with the handling of customer complaints or warranty returns. Problem solving, while it plays a key role, is not the only component of after sales service. It includes everything that happens, good or bad, to the customer, after every sale or transaction, which may not be a sale, like closing or withdrawing an account, or pre-terminating a loan or time deposit. After sales service therefore means monitoring and analyzing customer satisfaction or dissatisfaction, and doing something about it. Short term activities include sending apologies and solving a problem or correcting an error. Long term ones include process improvement and process standardization. In banking, 'after sales' service should be more accurately referred to as 'after transaction' service, since majority of customer transactions with banks are not selling or buying activities, like opening an account or applying for a loan or credit card.

After sales satisfaction or dissatisfaction can be assessed and acted upon after the sale of a car, the return of a defective car (lemon), when the hotel guest is checking out, or after the restaurant customer has finished his meal. These relatively infrequent transactions from the customer's point of view are identifiable events that are clearly the appropriate time to get feedback after his experience. Unlike in car dealership and the hotel-restaurant business, banking transactions are much more numerous. In a month, a bank client may make scores of ATM or teller-assisted withdrawals and deposits, issue two dozen checks, and use his bank credit card daily. Just when should banks check for customer satisfaction amidst this flurry of activities? The clearest time to check for customer satisfaction, or more precisely, dissatisfaction, is 1) when he lodges a complaint about a bad or erroneous service received, or 2) when he terminates his relationship with the bank or his availment of any one of its products or services.

In the first case which demands problem solving or error correction, most banks have systems, procedures, and polices to deal with this 'after sale' situation. However, much remains to be improved even in this most basic case. Resolving an erroneous debit to one's current account or credit card account, or a complaint about delayed statement is not as swift or instantaneous as most customers would want them to be. Disappointingly, resolution usually takes one cycle or a month, accompanied by indifference without any assurance that the same mistake will not recur. Superior after sales service means one-day, same-day, same-hour problem resolution, accompanied by a written apology, explanation and of course the corrected statement. In my opinion, no bank has reached this high level of the most basic of all after sales services. Of course, the ideal bank would aim for and achieve zero error and zero delays in the first place, and would have no need for this type of after sales service.

Rarer than fast problem resolution is the follow-up of lost customers, as in the second case. Banks seldom, if ever, follow up on closed-accounts - current, savings, time, and credit card. Probable reasons for this indifference to lost accounts are 1) closed accounts are so numerous to be monitored, unlike in the case of returned cars or lemons, 2) the amounts represented by these attrition are small, 3) the lost accounts are offset or more than offset by the new accounts opened, 4) management thinks accounts are closed for personal reasons and not because of the bank's failure. Whatever their nature or magnitudes, closed accounts are perfect opportunities to discover the root cause of customer dissatisfaction, if indeed it was the cause of the termination, and take action or improve service to prevent future attrition or even woo back the lost customer. It is prudent, in the spirit of continuous improvement, to always assume that accounts are closed because services are below expectation or competitors offer something better. Massive withdrawals, infrequent deposits, or inactive accounts, and other customer activities or inactivities that are a prelude to termination of service should also be examined for after sales dissatisfaction.

As important as customer dissatisfaction is customer satisfaction after sales. A bank should learn to ask satisfied customers what it did right, and not only what it did wrong to them. Banks should get immediate and regular feedback from new account holders, new cardholders, and new loan applicants about their level of satisfaction, reasons for choosing the bank, and their expectation. The bank's best practices, as determined by its satisfied customers, should be standardized and adopted bank-wide. The highest form of after sales service is opportunity seeking and not problem solving.


 

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