Arjun Singh Rathore
“If you don’t have a competitive advantage, don’t compete.” -JACK WELCH (Legendary CEO)
Nearly one crore customers complain to their Banks every year, and the number has not changed much in the last three years. That’s what the Committee for Review of Customer Service Standards in RBI Regulated Entities, has found.
Why Customers complain? If customers have a positive experience with the Bank, they will share this experience with friends, family and connections, which in turn can lead to new business, all at zero cost. But what happens if Bank fails to provide a positive customer experience? The answer is simple. Customers will complain.
According to a research by Esteban Kolsky, (a well-known Customer Strategist and Researcher), 13% of unhappy customers will share their complaint with 15 or more people. Furthermore, only 1 in 25 unhappy customers complain directly to Bank. And for customers that don’t complain, they just stop doing business with Bank. The overwhelming majority (91%) of unhappy customers who don’t complain simply leave.
But there is a silver lining in every complaint, it always highlights a problem, whether that’s a problem with product, employees or internal process, and by hearing these problems directly from customers, Bank can investigate and improve to prevent further complaints in the future.
Furthermore, research finds that customers’ whose complaints are handled quickly can often turn into loyal customers and even brand ambassadors. In fact, customers who have a complaint handled more promptly are willing to deal more in future.
Complaints and Suggestions are the most important tool to compete and deliver in a much better way to the best satisfaction of the ever demanding customer. That’s why Complaint Management is an important portfolio of any progressive Bank.
Banks don’t always know what’s going on, for the growth and sustainability of the business. Bank’s perceptions are always influenced by its own biases. For one reason or another, Banks tend to reassure themselves when their present situation offers uncertainties. It’s not hard to see why. After all, self-preservation is a natural instinct.
In the same way, Banks are often reluctant to retrace their steps or perform introspection to understand what happened and why. For this reason, it is important to properly manage complaints in order to make it easier to identify root causes.
In the grand scheme of things it’s common for customers to not provide feedback. Banks are then left to wonder whether their products and services are being received positively or negatively.
Truth is, ignoring customer’s perception, doesn’t help anyone. Banks don’t know if success is just temporary or long lasting, unless such a valuable piece of information comes from the opportunity provided to customers to express their opinions and experiences. So give the customers the opportunity to rant, complain, congratulate, praise and suggest ways to improve. Banks will be pleasantly surprised how invaluable this feedback will become if they just LISTEN with a focus on learning and improving.
Once Bank make the decision to listen, it is time to accept the fact that there is always room for improvement. Banks can’t be always perfect. One day Banks might find themselves stuck in a situation where they have to make an ethical, managerial or business decision, never thought Banks do have to make. Banking Industry practices are changing every day and they have got to keep up.
Proper complaint management systems use monitoring tools such as Key Performance Indicators (KPI) and Quality Alarms to make sure that Banks are always aware of product or service failures. The modern complaint management system takes the guess work out of knowing where to look, to find the root cause, all that’s left is tracking down the root cause and then taking the necessary measures to improve.
Banks to keep themselves one step ahead must maintain a robust Complaints Management system forming trust between the Bank and the customer and if there is a strong relationship, the Competitors will find it difficult to get customers defect. This translates directly to a competitive edge. Knowing how customer thinks, gives the Bank means to better serve them, and don’t lose them to competitors.
When Banks receive a customer complaint, follow these tips to help transform it into a golden opportunity for business. First of all Listen and understand the problem. Costumer has complained for a reason and it is important to understand why they are complaining. Usually Customers care more about quality than a fast response. Take time to listen and understand what their problem is.
When a complaint is received it must be immediately informed to the concerned team. Notify the concerned manager to discuss and resolve. In some cases, it will be resolved quickly (i.e. wrong information details need updating or service related issue) and in other cases (i.e. product related issue), it’s being shared with senior management and will be addressed at a higher level. Either way, sharing information internally has a bigger impact.
An apology for inconvenience must be conveyed to complainant. Bank or its employees should not be afraid to apologize for a mistake. Many customers simply look for an apology and acknowledgement of their complaint, yet so many employees are hesitant to admit when a mistake has been made. One should not underestimate the importance of an apology!
Follow up for the resolution should be the next step. An amicable solution should be resolved at an earliest. When your customer has a legitimate complaint, you need to find the root cause and solve it.
The feedbacks should be recorded for future references. Customer complaints could be a goldmine for finding improvements. In order to understand what Bank needs to improve on, start documenting the comments to find patterns and trends that are recurring. Whatever it is, document it for later and make time to inspect and reflect.
Last but not the least, when Banks acknowledged the mistake, fixed the problem and followed up, now it’s an added opportunity to go one step further and exceed customer expectations, by sending a hand-written apology and thank you note. Remember that customers pay close attention to the small details when they’re feeling distressed. The way Bank interacts with customer complaints after their problem is resolved sets the stage for the rest of business relationship.
Customer complaints are important and there is no better way to collect direct feedback from customers and improve product and services. However, the way a complaint is handled, is the difference between keeping a customer or losing one. So, the next time when a customer complains, listen to what the customer has to say, apologize (!), find a solution and follow up to see if he or she is happy with the way it is handled. In doing so, the Banks are on their way to create more loyal customers, improving product and delivering a better quality of customer service.
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