Customers Would Pay More —if Banks Would Find Out What They Really Want

It’s no secret that banks are being forced to deal with new government regulations. They’re also searching for answers on how these new regulatory measures will impact their customer relationships. Many banks assume that eliminating free checking or charging a fee on debit cards would negatively affect customer retention and loyalty.

But evidence suggests otherwise. According to recent research, bank customers actually reported that they would be inclined to pay higher fees if they would get better service in return. In fact, a recent American Express customer service survey showed that 3 in 5 customers said they would try a new brand or company to receive better service.1

What’s the value proposition that would make your customers be willing to pay more? Is it extended hours? Convenient locations? Better customer service? To respond effectively and profitably to new government regulations, banks need to find out what’s important to their customers.

Effective communications

One of the best ways to find out is simply to ask. Customers are more than willing to tell you what they like and what they don’t, what works and what doesn’t, what will cause them to come back, and what leads them to leave and never come back.

This requires a dialogue and constant two-way communication between the bank and your customers. Effectively communicating with customers will help you develop deeper more trusted relationships. As a result, you won’t have to rely so heavily on suppositions.

By soliciting feedback, you’ll be able to test your assumptions on how your customers feel about such things as fees and customer service levels. There are lots of effective ways to encourage feedback from customers—through surveys and questionnaires; front-line staff; focus groups; needs assessments; blogs; and by creating online communities.

Remember to follow up on surveys

Be sure to follow up with any customer who provides feedback. Most of us have answered a questionnaire or sent in a survey, and most of us have had the experience of getting absolutely no feedback. Virtually none of us have heard follow-ups as to how, if at all, the company has changed its processes to address our concerns or suggestions.

I often ask people to think of the banks they do business with. I pose questions like: “Why do you stay at that bank?” “What is it about that bank?” I get answers like: “They meet my needs.” “They find ways to add value.” “They make me feel special and they treat me like an individual and not a number.” I rarely or seldom hear, “They have great products and prices.”

Think of the examples in your own life where you frequent the same companies, not because they offer products at lower prices, but because when you enter their store you feel comfortable and welcome, are greeted by name, or the clerk chats with you while you’re paying for your purchases. The bottom line: They make you feel important, recognized and appreciated.

Customers are savvy. They know banks are genuinely interested in them when they truly appreciate their business and are sincerely committed to their satisfaction. They also know when the relationship is one-sided, when the bank is only trying to sell them something or make more money by raising fees.

1San Francisco Chronicle, June 18, 2011