Indian Banker,Volume.III No.10,October 2008
In the era of technologically backed competition, awareness level of customers is increasing day by day. Expectations of customers from banks are increasing as they have wider choice of products and services. The concept of generation to generation banking has also undergone changes. Customers’ loyalty is now conditioned by the quality of products and its delivery mechanism i.e. service. All these have necessitated the banks to provide better and excellent customer service.
In the era of technologically backed competition, awareness level of customers is increasing day by day. Expectations of customers from banks are increasing as they have wider choice of products and services. The concept of generation to generation banking has also undergone changes. Customers’ loyalty is now conditioned by the quality of products and its delivery mechanism i.e. service. All these have necessitated the banks to provide better and excellent customer service.
Who is a customer?
The word customer has been derived from "custom," meaning, "habit”. As per the literal meaning, a customer is someone who is in the habit of buying or receiving goods or services from the same business organisation. A customer is someone who makes use of or receives the products or services from an individual or organisation. In general term a customer is a person who has some regular commercial dealing.
As per Section 131 of Negotiable Instruments Act 1881, a bank gets protection when it collects instruments (cheque, draft etc) for and on account of his customer. For depositing a cheque or instrument, a person has to have an account with the bank. Therefore, it transpires that to be a customer of a bank account relationship is must.
Economic developments have popularised the services of banking industry and have widened its scope. Banks provide many services for which account relationship is not at all required, for example for issuing a banker’s cheque, demand draft or travellers cheque etc. Therefore, treating account relationship to be the only criteria for being a customer does not appear to be logical.
Banks are using multiple channels to make masses aware of its various products and services. Making masses aware of various products and services is an offer or invitation to the public to avail facilities of the bank. Therefore, customers can be broadly classified in to following three categories.
1. Those who already have account relationship with the bank.
2. Those who do not have account relationship, but make use of the services provided by the bank.
3. Those who have been motivated to deal with bank by advertisements, personal contacts etc., i.e. prospective clients.
What is service?
Service is an activity or benefit that one party offers to another. It is about people thinking about taking care of people. It is an ongoing process of commitment in action and selling of satisfaction. It is a feeling, which a person gets while dealing with an organisation. It is experiencing the experience.
Services are people based, therefore they are highly variable and inseparable from the source i.e. employees. Service is essentially intangible and does not result in the ownership of any thing. In economics and marketing, a service is the non-material equivalent of goods.
What is Customer Service?
Customer service is the set of behaviors that a business undertakes during its interaction with its customers. It is the degree of assistance and courtesy granted to those who patronize the organization. It is anticipation and identification of customers’ needs and expectations and taking action for positive customer satisfaction. It consists codes of ethics, etiquette, behavior courtesy etc.
Necessity for Good service?
Banking a service industry is facing fierce competition. Competition is not only in price of the products but also in the service. Banks are practically coming out daily with new products to suit various segments of society and to have a hold both in the existing and virgin market for keeping competitors at a bay.
Good customer service does not need publicity. It is felt. It speaks on its own. The praise coming from the mouth of a satisfied customer has lasting effect on those who come in touch with him. Excellent customer service is one of the few ways to achieve a sustainable competitive advantage. A customer does not mind paying higher price provided the product is good and is backed by excellent pre and post sales service. It is the quality of service that matters. Customer service has direct impact on the working of bank and on its profitability.
Peculiarity of service
Services are highly variable as they depend on the service provider. We can see the service provider but not the service. We can see him attending to the customer. We can see the product but not the service. Service cannot be seen, tested, felt, heard or smelled before they are bought. It cannot be stored. Services are intangible, inseparable and perishable. With the passage of time, the quality of service deteriorates as it has human element.
What is Satisfaction and dissatisfaction?
Satisfaction is human experience. It is the positive feeling of happiness and contentment, which a customer has after getting service from a bank. It is the customer who defines satisfaction. Customer satisfaction involves understanding customer expectations and meeting them. It is bridging of customers’ psychological, emotional and business needs. It is comparison of expectations versus perception of experience.
Perceptual experience concerning the service provider has an impact on the satisfaction of customer. Personality of the service provider, his etiquette, expressive and verbal behaviour gives stimulus impression to the customer.
An organisation achieves high levels of customer satisfaction by exceeding customer’s expectations about the quality of product, service, and the price. Higher the satisfaction, higher the business levels. Lower the satisfaction level, more likely the customer may stop dealing with the bank or migrate to other bank.
Non meeting of customer’s expectations results into dissatisfaction. Dissatisfaction is the negative feeling of happiness that a customer gets after he had dealing with the bank. The neurosis born out of a bad experience has subtle and lasting effect on a customer. He would, instead of recommending the bank to others, would highlight his negative experiences, which may ultimately jeopardize bank’s image.
A customer may feel unhappy, dissatisfied if the service is done carelessly. He may not particularly feel satisfied when the service is done carefully. It may not be true that providing prompt service causes satisfaction and delay causes dissatisfaction. A customer feels happy when a banker does what he is not normally expected to do. Feeling of satisfaction depends on an individual. It depends on his urgency, expectations, and belief. If it matches with his expectations, he considers it to be ok.
A service may be satisfactory for some one but may be unsatisfactory for other. There are no common parameters for measurement of satisfaction level since satisfaction is very personal. However, by and large customers have some minimum expectations from a bank. Banks may minimise dissatisfaction by providing prompt service and amenities to customers.
Remedying dissatisfaction
If a customer is asked to measure his level of dissatisfaction from the services on a five-point scale, depending upon his dissatisfaction, he would rank services anywhere between zero to minus 5 i.e. on the negative side of the scale and if he is asked to measure his level of satisfaction, depending on his satisfaction level, he would rank services anywhere between zero to plus 5 i.e. towards the positive side of the scale.
In the event of his dissatisfaction with the services, he can be brought to zero level after the causes of his dissatisfaction i.e. irritants are removed. At zero level the customer is neither satisfied nor dissatisfied. Zero level is that point of service, which bank personnel are supposed to provide.
Measuring satisfaction/dissatisfaction on a five point scale
______________________0_______________________
Negative - 5 - 4 - 3 - 2 - 1 Zero level + 1 + 2 + 3 + 4 + 5 Positive
At zero level, bank personnel perform duties as per the set rules, regulations and procedures of the bank. They do not deviate, and go out of the way even if they have discretion to do so.
To work within the framework of rules and regulations is only a formality of performing duties in a routine manner. Providing services in a routine manner gives contentment feeling of routine nature, which is neither satisfaction nor dissatisfaction.
For providing satisfaction, customer has to be brought to the positive side of the scale i.e. anywhere between zero to plus five range .The bank and the staff has to give some thing extra to a customer which he would never have imagined or expected. Doing some thing extra is the customer satisfaction. Providing satisfaction is an art.
The example given below will illustrate the point that “removal of dissatisfaction is not satisfaction”.
Presume that on a very hot summer day, a man is very thirsty and his throat is choking i.e. he is on the negative side of the five-point scale. Offering him plain water will quench his thirst and he would be brought from negativity to zero level. At zero level he is not thirsty, since the cause of his dissatisfaction has been removed i.e. requirement of water has been met. At zero level he is neither dissatisfied nor satisfied.
Suppose instead of plain water, the same person is served cold and chilled water how would he feel? Would it not only quench his thirst and give him internal feeling of contentment and satisfaction? This feeling of contentment and satisfaction is derived from cold and chilled water, which he was not expecting. Similarly doing some thing extra that is not expected from a bank staff gives satisfaction to the customer.
There is no standard yardstick for measuring satisfaction. Every customer has his own measuring rod of satisfaction. Banks too have their own standard of measuring customer satisfaction. What banks feel may satisfy a customer may not be what a customer feels.
Customers at times do not have a clear understanding of their needs. Assisting customer in determining needs is a valuable service to them. Both customer needs and expectations can be determined through interviews, surveys, conversations or other methods of collecting information.
For providing satisfaction, customer has to be brought to the positive side of the scale i.e. anywhere between zero to plus five range .The bank and the staff has to give some thing extra to a customer which he would never have imagined or expected. Doing some thing extra is the customer satisfaction. Providing satisfaction is an art.
The example given below will illustrate the point that “removal of dissatisfaction is not satisfaction”.
Presume that on a very hot summer day, a man is very thirsty and his throat is choking i.e. he is on the negative side of the five-point scale. Offering him plain water will quench his thirst and he would be brought from negativity to zero level. At zero level he is not thirsty, since the cause of his dissatisfaction has been removed i.e. requirement of water has been met. At zero level he is neither dissatisfied nor satisfied.
Suppose instead of plain water, the same person is served cold and chilled water how would he feel? Would it not only quench his thirst and give him internal feeling of contentment and satisfaction? This feeling of contentment and satisfaction is derived from cold and chilled water, which he was not expecting. Similarly doing some thing extra that is not expected from a bank staff gives satisfaction to the customer.
There is no standard yardstick for measuring satisfaction. Every customer has his own measuring rod of satisfaction. Banks too have their own standard of measuring customer satisfaction. What banks feel may satisfy a customer may not be what a customer feels.
Customers at times do not have a clear understanding of their needs. Assisting customer in determining needs is a valuable service to them. Both customer needs and expectations can be determined through interviews, surveys, conversations or other methods of collecting information.
What does a Customer expect?
Every customer desires that he should be welcomed in the bank premises. He should not get an impression that he is unwanted person in the premises. He expects staff to behave politely, with courtesy and in a friendly manner.
Customers desire that they should be attended without loss of time and their work should not only be done on priority but should be done perfectly and without mistakes. Therefore, it is essential that the staff members attending to customers have full and complete knowledge of work and other related issues and above all they should be polite and courteous.
Customer expectations are based on perceived values of facilities or service vis a vis his specific needs. He seeks value-for-money. Therefore, he selects from a range of products/services before opting for the same. Cultural values, advertising, marketing, and other communications influence customer’s expectations.
Customer Complaints
Complaining customers have several needs. They alert the organisation to systemic problems. Complaints are not nuisance. Complaints are the symptoms of disease prevailing in the service or in the product that needs to be cured. It helps in identifying and knowing what has gone wrong - so that remedial actions may be taken.
Complaints are not to be overlooked. It should be acknowledged, carefully handled, investigated, and the cause remedied. Customers notice the way a complaint is handled. Solving the problem of a customer helps in building his confidence and allegiance to the bank. Customer has to get the feeling that bank understands their displeasure and sincerely feels for them. Banker should not overlook emotional component in complaints. Holding on complaint damages banks’ image.
In our country most dissatisfied customers do not complain but suffer in silence or they tell their friends. The reason is that no one listens but tries to find fault with the complainant. Employee’s representatives take side of erring staff and make complainant feel guilty. They ignore that banking is a hospitable industry and not a hostility industry. Accepting mistakes does not make a man small but indicates his moral character and helps in bridging the differences.
With the introduction of technology, complaints are sent through e-mails. In some organisations the computer generated reply assures that the complaint will be looked into within 24 hours and grievances attended within 72 hours. However, it is observed that no steps are taken to pacify the customer with in the assured time schedule, which gives bad impression about the service and the culture of the organisation.
Customer Care should be the culture and philosophy of a bank, which needs to be demonstrated. In his book on "Marketing Imagination," Dr. Theadore Levitt of Harvard Business School has mentioned that "Profit is a requisite, not a purpose of business. The purpose of a business is to create and keep a customer."
Complaints are not to be overlooked. It should be acknowledged, carefully handled, investigated, and the cause remedied. Customers notice the way a complaint is handled. Solving the problem of a customer helps in building his confidence and allegiance to the bank. Customer has to get the feeling that bank understands their displeasure and sincerely feels for them. Banker should not overlook emotional component in complaints. Holding on complaint damages banks’ image.
In our country most dissatisfied customers do not complain but suffer in silence or they tell their friends. The reason is that no one listens but tries to find fault with the complainant. Employee’s representatives take side of erring staff and make complainant feel guilty. They ignore that banking is a hospitable industry and not a hostility industry. Accepting mistakes does not make a man small but indicates his moral character and helps in bridging the differences.
With the introduction of technology, complaints are sent through e-mails. In some organisations the computer generated reply assures that the complaint will be looked into within 24 hours and grievances attended within 72 hours. However, it is observed that no steps are taken to pacify the customer with in the assured time schedule, which gives bad impression about the service and the culture of the organisation.
Customer Care should be the culture and philosophy of a bank, which needs to be demonstrated. In his book on "Marketing Imagination," Dr. Theadore Levitt of Harvard Business School has mentioned that "Profit is a requisite, not a purpose of business. The purpose of a business is to create and keep a customer."
Data Based Customer Service:
Requirements of customer service differ from person to person, which is governed by age, educational background, profession, vocation and environment. Service requirements of businessmen are different from that of pensioners, medical practitioners, office goers, householders, those who have college-going children or those who have recently started their married life.
Customer satisfaction enhances when bank tailors services on the basis of data. It also helps in building cordial relationship with customers. Data based strategy is the intellectual approach which helps banks in identifying and customizing service requirements of various groups and sub groups of customers. It also helps banks in chalking out strategies for serving customers in a professional manner and capturing larger market share.
Customer focused thinking enables bank in building rapport which brings customers closer to the bank. Building relationships makes most sense for customers whose lifetime value to the bank is the highest. It also creates opportunities for cross-selling of products that makes the overall relationship profitable.
Technology and Service:
Technology is rapidly changing the face of banking industry and enhancing the demand for better than the best services. It is helping banks in breaking the bottlenecks in superior customer experience. Technology has made the world a global economic village. Banking services are no more confined in brick and mortar environment. Technology has made it possible to transact business any time, anywhere and from any branch office of a bank.
Transactions can be done through automated teller machines or even from a remote area through Internet, a virtual environment created at “ World Wide Web”, where human interface is not required in attending to customers and in providing service. The days are not far when robots may be available in providing services in banks. At least they will neither misbehave nor ill-treat customers.
Customers appreciate not only consistencies in services but also hassle free interface with the technology. The level of frustration and dissatisfaction escalates when customer encounters problems due to technology either while transacting business on site or off site. In the event of his facing problems while transacting business off site i.e. through ATMs, Internet, he broods, as there is no one to appreciate and solve his problems, and mechanical devises are insensitive to his feelings.
While dealing at the branch level i.e. on site, a customer gets bad impression about the services when he comes to know that either the server is not responding, or there is no net work connection or transaction has not been uploaded or the pass book printer is out of order and so on so forth. Under such situation positive and helpful attitude of bank personnel acts as antidote for frustration and dissatisfaction and gives healing touch to customers.
Banks can find out level of popularity of its services from the number of hits on its site. It can also find out preferences for its products and services, and can design state of art services. It can maintain contacts by enquiring from the person visiting the site whether he is interested in any particular product or would like to be informed of bank’s products at regular intervals. By obtaining clients’ preferences, personal details, e-mail address etc., bank can build lasting relationship with him. Sending e- greetings on festive and special occasions will give soothing feeling to both existing and prospective customers.
Transactions can be done through automated teller machines or even from a remote area through Internet, a virtual environment created at “ World Wide Web”, where human interface is not required in attending to customers and in providing service. The days are not far when robots may be available in providing services in banks. At least they will neither misbehave nor ill-treat customers.
Customers appreciate not only consistencies in services but also hassle free interface with the technology. The level of frustration and dissatisfaction escalates when customer encounters problems due to technology either while transacting business on site or off site. In the event of his facing problems while transacting business off site i.e. through ATMs, Internet, he broods, as there is no one to appreciate and solve his problems, and mechanical devises are insensitive to his feelings.
While dealing at the branch level i.e. on site, a customer gets bad impression about the services when he comes to know that either the server is not responding, or there is no net work connection or transaction has not been uploaded or the pass book printer is out of order and so on so forth. Under such situation positive and helpful attitude of bank personnel acts as antidote for frustration and dissatisfaction and gives healing touch to customers.
Banks can find out level of popularity of its services from the number of hits on its site. It can also find out preferences for its products and services, and can design state of art services. It can maintain contacts by enquiring from the person visiting the site whether he is interested in any particular product or would like to be informed of bank’s products at regular intervals. By obtaining clients’ preferences, personal details, e-mail address etc., bank can build lasting relationship with him. Sending e- greetings on festive and special occasions will give soothing feeling to both existing and prospective customers.
Conclusion:
A customer deals with people who work in the bank premises. He does business only with people. Staff members have to realise that every interaction with customer is an opportunity to make positive impact on him. The person dealing with the customer has therefore to create positive impressions that are memorable and help in building confidence. They have therefore to bear in mind what Confucius said " What you do not want done to yourself, do not do to others”. Once we keep in mind the sayings of Confucius, it will automatically result in improvement in the services.
In the present scenario when competition is tough, the best way for survival is constant touch with the customers and letting them know what bank can do for them.
A banker has to be sincere and thoughtful to customers. Sincerity creates confidence. This is the most important reason for a customer to do business with the bank. Banks have to create such service environment that it becomes apparent to customers that doing business with the bank is easy and economically beneficial to them and it is totally stress free.
If we want our customers to be loyal, we have also to be loyal to them. We have to provide them excellent services. This will result in increase in the number of profitable customers. Banks have to realise that it is not the customer acquisition, which is important, but their retention is important. Banks have to provide quality services so that customer do not defect and migrate to other institutions. Banks have not only to measure and manage customer satisfaction on regular basis, but have also to find out the reasons for their defection.
A banker has to be more customers focused than operations focussed. Operations focussed bankers do the job without deviating from the norms. Customer focussed banker is solution oriented he is flexible and does the right thing both for the bank and customer.
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