WHEN CHEMICAL Banking Corp. wants to know how it is doing with its customers, it picks up the telephone and asks.
The New York-based banking giant realized that the conventional method of correspondent surveying for customer feedback was not the best way to find out how it was doing. So management decided to use the telephone.
"Our goal is to develop mutual beneficial relationships with our customers, and we feel the only way to do that is to know what they think of us," said Edmund Valenski, senior vice president of the $150 billion-asset company. "By surveying clients by phone, we can get feedback on our operation and address problems much more efficiently than through printed surveying."
Chemical's retail bank has been measuring customer satisfaction since 1988. It has focused its attention on being able to differentiate itself from its competitors by offering "superior customer service."
"We spent five years, using the paper methodology which got to approximately 80,000 clients a year," said Mr. Valenski.
Mr. Valenski said that although using paper surveys worked well, it sometimes provided either too much information - or not enough.
One of the main problems the bank had with the paper method was the timeliness of the information. "We would send the surveys out in January and we would generally get the information back four or five months later," he said.
To combat the problem, Chemical looked for alternative methods of getting customer feedback.
The bank wanted to find a way to move from a measurement system to management in a cheaper, faster, and better way than what it was doing.
The bank found a company - called Sky Alland Inc. - that offers telephone surveying.
"We are able to get the information fast enough so that we can intercede with the client if there is a problem and fix it," Mr. Valenski said. "We no longer have to wait four months for responses and have to spend time analyzing the data to death. If there is a problem, we can get the client on the phone and fix it."
Chemical believes that the use of the system has been a boost to its clients' perception of the bank's responsiveness and competence.
"We found that in essence it helps the development of the relationships," Mr. Valenski said. "The client sees the survey, not as doing us a favor, but as an opportunity to tell us positive things and negative things."
Norman Jaffe, president of research at Fox-Pitt, Kelton Inc. in New York, said the use of telephone surveying is becoming a trend in the industry as companies in general are trying to become more responsive to customer needs.
"Chemical is one of many institutions that have recognized the need to know what the customers are looking for," he said. "By using telephone surveying they are able to meet the customer's needs as well as improve the likelihood of its cross-sell opportunities."
In the case of a disgruntled customer, Chemical is able to react within 24 hours to rectify the problem because Columbia, Md.-based Sky Alland sends feedback to management nightly.
The bank has been able to cut its cost of measuring customer satisfaction by almost 50% by going with this method.
"We have been able to go from spending millions of dollars on the surveying to hundred of thousands while we are still contacting over 80,000 clients a year," Mr. Valenski said.
One of the unique features of the telephone surveying is that the bank is able take the pulse of any issue that may arise.
"If there is a problem or an industry wide issue, we can quickly add a question overnight," Mr. Valenski said. "With a paper-based survey, you have to reprint the whole thing or do separate research work. We can basically call Sky Alland and add a question instantly.
"It allows us to get a quick pulse of the issue and find out the impact it is having and what should be done about it," he continued. "We have unparalleled flexibility to respond to clients' concerns."
Chemical has approximately 1.5 million clients in the New York market area with approximately 3.5 million accounts.
On average the bank is trying to hit 5% of its customers with the telephone surveying.
The bank chooses which customers it is going to survey based on transaction volume; it prefers customers with high transaction volume.
"If a client is using us, we have had a moment of truth," Mr. Valenski said. "We have had an opportunity to either delight or disappoint them."
Each month the bank takes a look at who is making transactions and then randomly selects who it is going to survey.
The survey includes middle-market private banking clients, consumer clients, and business clients.
The bank currently has a response rate of 92% from the phone survey, compared to 25% when it was using mail surveys.
One reason may be the flexibility of the telephone survey. If the call from Sky Alland comes at an inconvenient time the customer has the option of having the company call back or not taking part in the survey.
The bank has found that often when this occurs, the customer asks the company to call back.
"This gives us the flexibility to ask when would be a better time for us to reach them," said Mr. Valenski. "Some people say they don't want to talk at all, while most people say they do want to talk to us and ask us to call at a different time."
Mr. Valenski said he believes the key to Chemical's future is to provide its customers with the finest level of service, which will increase customer retention and continue to build relationships. He said he sees the use of telephone surveying as way to insure customers are happy and, if they are not, to fix the problems.
"The reason we do this is because there is no room for timeouts; service and quality are things that have to be done every day," he said.
The phone surveying is helping the bank drive home the idea of continuous improvement through every action and every activity we make.
"The system is not just a measurement tool to create a report to sit on somebody's desk," said Mr. Valenski. "What this does is that it helps to enhance the relationship between us and our clients."
If a customer voices a concern, an alert is sent immediately to the person responsible for the customer - in many cases a branch manager - and it is addressed within 24 hours.
"Our bank employee gets on the phone and gets the problem fixed," said Mr. Valenski. "We want to get it taken care of right away."
Joyce Pyle, a branch manager in New York City, said telephone surveying is very helpful because it lets her and her staff know what the customers are thinking.
"It lets us know how we are doing and what changes we need to make to accommodate our customers' needs," she said.
Besides customer feedback, the telephone survey also offers the bank an opportunity for marketing products to customers.
"If a client expresses a need for a product over the phone, we are able to have someone contact them right away," Mr. Valenski said.
