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DELIGHTING BANK CUSTOMERS

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

Many companies pursuing quality consider customer satisfaction to be their objective. But to their disappointment, they find that customer satisfaction is not an effective quality goal. It is just as easy to lose satisfied customers as it is to lose dissatisfied ones to competitors. Satisfied customers don't necessarily develop brand loyalty just because they got what they asked for or paid for.

Competition can always match your service, and steal your customers by doing it better. Customer loyalty can only be assured by continuously delighting and surprising customers. How different and superior are customer delight and surprise to customer satisfaction? The table below illustrates the four levels of customer service.

  Need Stated by Customer Service Received by Customer
Dissatisfaction YES Below customer expectations
Satisfaction YES Within customer expectations
Delight NO Within customer expectations
Surprise NO Beyond customer expectations

Customer service levels depends on whether customer needs are stated or not, and to what extent customer expectations are met. Customers state their needs either verbally or in written form in the purchase order or contracts. Customers are dissatisfied if their stated needs were not met, or if service fell below their expectations. Customers are satisfied if their needs are met within their expectations. They are delighted if their unstated needs were met within their expectations. They are pleasantly surprised if their unstated needs were met beyond their expectations.

Customer behavior response

What kinds of customer behavior result from the various levels of customer service?

A dissatisfied customer is an angry customer. He may or may not express his dissatisfaction to the company. Most of the time he will not. But he will tell his friends about it, and your competitor will soon find out about it.

A satisfied customer is a silent and indifferent customer. He normally will not tell the company nor his friends about his satisfaction, unless asked or surveyed.

A delighted customer is a happy customer. He will express his delight to the company and his friends. He develops brand loyalty and becomes a repeat customer.

A surprised customer is an excited customer. He will write about his wonderful experience to the company and his friends. He will endorse the company and its products to everyone and becomes the company's most avid and credible salesperson.

In the banking industry, where products and services offered by competing banks are perceived to be of the same quality by the customer, price differentiation strategy has limited effectiveness because of the industry's self-regulation and government controls. Banks have very little leeway in terms of varying interest rate and service charges.

To become a more competitive bank, then, customer delight is the only remaining strategic option. If bank products cannot be enhanced or varied, service quality and delivery can be improved to attract and keep clients. Examples of customer delight and surprise are as follows:

Delight: Releasing a loan before the scheduled date, e.g. 50% shorter processing time

Surprise: Hand-carrying the cheque (loan proceeds) to the client's (borrower's)office without his requesting such services.

Delight: Greeting the customer and thanking him after and every transaction with the bank-- withdrawal, deposit, inquiry, loan or card application, etc.

Surprise: Apologizing to the client after having him wait longer than usual or after causing him any kind of inconvenience or discomfort.

(Note that in Japan, greeting, thanking, and apologizing to customers for any inconvenience caused by the bank are so commonplace that these acts are considered services that result in plain customer satisfaction. Banks which do not serve this way offend customers and are avoided by them.)

The bank's best possible salespeople

The objective of Total Quality Management (TQM) is to create and retain customers who would not only buy but also endorse your products and services. Customers are the best salespeople because they are users of your products. Their desire to endorse them to their friends comes from the sincere delight and surprise. The company's salesmen are the least credible endorsers because customers know they want to meet quotas and earn commissions.

The best quality strategy is to develop life-long customers by continuously delighting and surprising them ahead of the competition. To gauge your success in TQM, ask yourself this question: When your customer buys your product or service, is he just buying it, or will he also "sell" or endorse it to others? If you feel that he is just buying, then rest assured that tomorrow he may be buying the same product or service from your competitor. The best customer is both buyer and seller of your products and services.


 

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