My non-scientific estimate of how many community financial institutions (FIs) claim "customer service" as the factor that differentiates them from their competition: nine out of ten.
But if 90% of banks have superior customer service, then no banks have superior customer service and 10% of banks are inferior. So, in this respect, it may be the perception that a community FI has great service, not the reality.
If a community FI truly has superior service, then it should be able to: 1) charge higher prices, 2) improve customer acquisition, and/or 3) improve customer retention and wallet share. I can think of no other reason why an FI would invest in having superior customer service. When challenged, FI executives tend to go to the commodity argument... "We can't charge higher prices because money is a commodity. Our money is no different than another FI's."
To that argument, I offer the following story, sent to me by a bank CEO from The Simple Truths of Service:
'When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey. He handed my friend a laminated card and said: “I’m Wally, your driver. While I’m loading your bags in the trunk I’d like you to read my mission statement.”
Taken aback, Harvey read the card. It said:
Wally’s Mission Statement:
To get my customers to their destination in the quickest,
Safest and cheapest way possible in a friendly environment.
This blew Harvey away. Especially when he noticed that the inside of the cab matched the outside. Spotlessly clean!
As he slid behind the wheel, Wally said, “Would you like a cup of coffee? I have a thermos of regular and one of decaf.” My friend said jokingly, “No, I’d prefer a soft drink.”
Wally smiled and said, “No problem. I have a cooler up front with regular and Diet Coke, water and orange juice.” Almost stuttering, Harvey said, “I’ll take a Diet Coke.”
Handing him his drink, Wally said, “If you’d like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today.”
As they were pulling away, Wally handed my friend another laminated card. “These are the stations I get and the music they play, if you’d like to listen to the radio.”
And as if that weren’t enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he’d be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him with his own thoughts.
“Tell me, Wally,” my amazed friend asked the driver, “have you always served customers like this?”
Wally smiled into the rearview mirror. “No, not always. In fact, it’s only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do.
Then I heard the personal growth guru, Wayne Dyer, on the radio one day. He had just written a book called You’ll See It When You Believe It.
Dyer said: If you get up in the morning expecting to have a bad day, you’ll rarely disappoint yourself. He said, ‘Stop complaining!
Differentiate yourself from your competition. Don’t be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd.’”
“That hit me right between the eyes,” said Wally. “Dyer was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more.”
“I take it that has paid off for you,” Harvey said.
“It sure has,” Wally replied. “My first year as an eagle, I doubled my income from the previous year. This year I’ll probably quadruple it. You were lucky to get me today. I don’t sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can’t pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action.”
Wally was phenomenal. He was running a limo service out of a Yellow Cab. I’ve probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn’t do any of what I was suggesting.'
Long story, I know. But worth telling because I perceive a taxi ride as a commodity too. In fact, in most cities, taxis are subject to price fixing, charging the same fare per mile. But if Wally delivers his commodity in a manner that is valued by his customers, they will call him more often and tip him better. If Wally can do it, so can we.
We are so "in the weeds" in our day to day business we may not view the long-term decline in customer service. A recent Carmax commercial, aired during the Super Bowl, exemplifies how such service has declined over the generations (see below). But if community FIs determine to develop strategies focused on differentiation and not price, then we must take a serious look at our service and implement strategies to elevate our performance, build our brand, and sustain our future.
What is your FI doing to improve service?