How to Make Customers Love Your Bank

In today's environment, banks and other financial services firms are challenged with finding creative ways to cut costs and build revenue while still maintaining customer loyalty. The end-user experience is quickly becoming a market differentiator. Charles Schwab encourages potential investors to "Talk to Chuck" for a more personal experience, while Discover differentiates their offering by poking fun at the stereotypical customer service representative via the notoriously unhelpful "Peggy."

Whether your firm is more like Peggy or Chuck, the strategies below can help optimize customer service for businesses looking to win back consumer trust and differentiate themselves from competitors.

Respond to social media.

It is essential to meet your customers where they are already socializing. This means moving beyond traditional phone conversations to diversify the channels available to your customers. For example, as banks encourage customers to manage their accounts online, they must also be available to answer questions and provide technical support within the same forum. Live chat is as important to the online customer experience as the teller is in a branch.

Financial institutions tend to be especially cautious when engaging with customers in social media, but ignoring the conversation doesn't make it disappear. Rather, it eliminates the opportunity to gather intelligence and use the conversation to align social media policy and strategies.

When a client voices concerns about diving into social media, I ask them, "If your customer calls to complain, would you want to answer the phone?" Invariably, they respond "Yes." Not responding to social media missives about your brand is identical to not taking your customer's calls.

Maritz Research found 85% of social media consumer outcries are not addressed at all and 51% of those who make complaints expect to be contacted. This clearly indicates responding to social media posts about your brand (whether positive or negative) is an opportunity to engage with customers and optimize your service.

Fortify the back door.

The global economic recession brought new laws, rules and regulations imposed upon the financial services sector that are illuminating banks' disregard for the value of customer service. For example, three of the largest U.S. banks have announced increases in checking fees due to regulatory changes that affected their business models. Unfortunately, new fees are not conducive to customer satisfaction. Customers are conditioned to expect increased service along with an increase in fees. How will charging for checking result in a better experience?

Financial service organizations must transform the way they do business to stay in compliance while remaining competitive on customer service. According to the Credit Union National Association, net membership growth at credit unions during the first quarter of 2012 exceeded the total growth for 2010. Customers frustrated with fee increases and mediocre service have demonstrated their willingness to switch. Banking institutions need to fortify their back door before they are exposed to the public by an increasingly strict regulatory environment.

Focus on existing customers.

Studies have shown that it is six to seven times more costly to acquire a new customer than to retain an existing customer, making it instantly apparent why keeping customers happy can help to drive business results.

Rewards programs are frequently a key component of a business' value proposition, and such programs must begin with optimal customer service. If your customers do not experience good service, no rewards program could convince them to stay with your brand.