New Service Puts Spotlight On Customer Satisfaction

A research service introduced this week by the Bank Marketing Association promises to give financial institutions a better picture of customer satisfaction.

"Service quality satisfaction analysis" will rate 72 items, such as prices, teller abilities, and time spent in line, for importance to customers. The client bank will be rated on performance in each area.

The service is intended to complement more traditional research, such as mystery shoppers and comment cards.

"As community banks, we instinctively gave good service," said Biff Motley, executive vice president of marketing for Premier Bank, which has grown through mergers into a $4 billion-asset institution in Louisiana. "Now, as a big bank, we have to manage it."

Help in Getting the Job Done

The Chicago-based trade group said the service will let banks gauge performance cost-effectively. "There are three kinds of help members look to us for," said J. Douglas Adamson, executive vice president. "They want help understanding what they need to do, ways to learn how to do it, and help getting it done. The more traditional conferences, seminars, books, and publications help with the first two," while the new product "is more an answer to the third."

Survey questions will be mailed to a randomly selected group of the bank's clients. The BMA predicts a 20% response rate, but tests have generated returns as high as 33%. Responses will be grouped for insights into reliability of service, responsiveness, competence, clarity, courtesy, accessibility, features, and appearance. Demographic information, such as age and income, will also be included.

The study, including tabulation, reports, and action plan based on the analysis, costs $6,500. For a more detailed breakdown, institutions can receive an analysis of a particular branch for $1,500.

Almost all bank marketers say service quality is important to bank management, according to a study just released by the trade group. Yet only 42% regularly monitor service quality, and just 44% conduct customer-satisfaction research on a regular basis.

"The industry has advanced in every area we've studied," Mr. Adamson said. "The bad news is that better is not good enough."

Premier Bank officials were pleasantly surprised by the survey's effectiveness. Of 2,000 surveys mailed to checking customers in Lafayette, La., 35% elicited responses.

"We were concerned about the study size," said Mr. Motley, who called the questionnaire a "monster" at four pages. "We anticipated negative feedback, and instead got lots of good PR. People liked being asked their opinions."

Premier concluded that its overall efforts to improve service quality are working. But it found areas that could use improvement.

"We learned that we're real friendly but we're not very prompt," Mr. Motley said. "People are waiting in lines, being transferred around the telephone system. And while they like us, we don't respond as well as we should."

Overall, Premier earned an 8.6 on the BMA's 10-point scale. Pricing received the most criticism; this reflects Premier's market strategy - to be the highest-priced institution in its market.

|The Process Works Well'

In the past, Premier had conducted mystery shopper surveys and offered teller incentives for courtesy. Mr. Motley said those programs will be redirected to include training and testing for responsiveness in its 100 branches.

"The process works well," said Phillip F. Hudson, executive vice president of the $6.8 billion-asset First Security Corp., a Salt Lake City company that also tested the product. "We've been doing our own customer research for three years, so the results are not startling. However, if we didn't have the research staff in-house, the advantage is that this is a very easy program."

First Security said nearly a third of its customers in Boise responded to the inquiries. Mr. Hudson said the bank will consider replacing some of its existing research with the BMA survey. "The only real way you can measure quality of service is to ask customers," he said. "A number of people claim to be doing quality research by using mystery shoppers and performance standards. ... but all you've really learned is how you're meeting your own standards."

Next month the trade group will begin field research in conjunction with several state banking associations to develop national data on customer preferences. That data will be released in January.

In addition, the BMA hopes to build a data base of all bank customer responses, providing peer-group information by institution size and by market.

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