Huntington Bank introduced what it calls 24-Hour Grace five years ago, giving customers who overdraft a day to add money to their checking account and avoid a fee for insufficient funds.
David Clifton, Huntington's chief customer and marketing officer, initially forecast that, if all went well, it would take two years to make up for the lost revenue, which amounted to $30 million in fees annually.
But the bank earned back the money in less than a year, by adding new customers more quickly than expected and improving customer retention.
Another benefit was in employee retention. Clifton says the industry has a joke about how branch employees tend to call in sick on Tuesdays, because that's when the complaints about weekend overdraft fees come in.
"But 24-Hour Grace was a very different story, because you have time to correct the error. That impacts your colleague as well as your customer. It matters," Clifton says.
That extra time to fix overdrafts marked the start of a new philosophy for Huntington, one that pushes the idea of customer service closer to customer advocacy.
Clifton credits this philosophy with helping fuel the bank's growth, from 900,000 checking account households five years ago to 1.4 million today.
He also says it is at the heart of why our annual survey shows that the esteem Huntington's customers have for their bank is growing.
What's your approach to reputation management?
When it comes to actually operationalizing it, it's got to be simple for colleagues to get. You have to get folks thinking about one thing. In our case, we've crystallized on the idea that the bank is passionate about doing the right thing. Make them think every morning, 'Am I doing the right thing for my customer?'
How did you settle on the strategy of rallying people around a single idea?
I came to the bank at the end of 2009 and Steve Steinour, our CEO, had been here about nine months or so and done a strategic planning process. As part of the process, he recognized that he wanted to get a single idea, a great brand at the core of this company.
How did you choose what that idea would be?
The DNA of this place is very service minded. Prior to me joining even in 2009, actually even through the financial crisis, there were very high customer satisfaction scores, and it's due to the efforts of colleagues through, I think, literally decades. So when I came in, it was more about crystallizing around that single idea of what that front line is focused on delivering every day, which is good customer service.
When it comes to the marketing, the word 'service' has become such a vague word. It needs to have a little bit more dimension to it. We know that banking is still around trust. And trust is really reliant on folks that are doing the right thing, because if you're doing the wrong thing, obviously you're going to betray trust. That's where it began to line up, the single idea that we are going to build this brand around, which is, 'Welcome to a bank that is passionate about doing the right thing.'
I think that's what's propelled us. It's been a rallying cry. It's supported by our CEO. It's championed by our CEO. It's enabled by our CEO. It's driven throughout the organization and welcome throughout the organization, first because it was part of us and easy to pick up, but also because it's lived at the top of the house as well as every day on the front lines.
How do you handle missteps?
There are always failures. We work on those constantly. We're obsessed with those. We care about every complaint, especially Mary Navarro, who heads retail banking for us. I refer to her as 'the Mother Teresa of banking.' I swear she is a saint on earth. She really is passionate about resolving customer issues getting to the core of it, making it right for them and has instilled that into the banking culture that surrounds this place. It takes the efforts of a lot of great people who are very passionate about it to make it happen.
Huntington outscores every other bank when it comes to how customers feel about its products and services. And among the seven reputation drivers, Huntington's biggest improvement came in the products and services category. Did you launch anything new that might be causing this? Or is it more of a cumulative effect?
We started with 24-Hour Grace. Then we went the opposite way of the industry in not discontinuing a free checking account; we call it 'Asterisk-Free Checking.'
We have free transfers. We want customers to have a savings account and link to that savings account, and we'll transfer the money for free. Not all banks do.
Recently we rolled out something called 'All-Day Deposit.' That addresses a pain point, which is, 'I couldn't reach the branch on time. I need to get my deposit in, and the cutoff at this ATM is different than this other one, and I get confused.' And we just said, 'Why does it have to be like that?' We got rid of all of our cutoff times across all of our technology platforms. Our mobile deposits and our ATMs are all at midnight. So you have up until midnight to make your deposit and it counts for that day.
We also do wacky stuff with credit cards. We let customers choose their own category for rewards and it's been very welcome. We have what we refer to as 'Late Grace Fee' too. It's basically if you miss your credit card payment, we give you 24 hours to make that right as well.
We do some different things here.
Banks are not doing as well reputation-wise with noncustomers as with customers. Do you care about that?
We're totally focused on that. I don't know if you've ever heard of Walter Wriston; he was the CEO of Citibank at one point. I had occasion to meet him very early in my career and a quote he said stuck with me through these 20 some years: 'The only thing banks have is trust and, if you lose that, you've lost it all.'...
I think about that to this day. If a bank loses trust with its prospects, it's lost its future.
What is the most important thing for banks to do if they want to improve their reputation?
Stay focused on the customer. If you really, really care about that, I sincerely believe the rest falls into place. Sometimes you have to give up profits for that. That's the hard decision because people can get fired when they do that.