At a recent financial conference, after we presented on the bank customer experience, an attendee joked that she wished her bank was more customer friendly and had longer branch hours including be open on Saturdays. The funny part is that customers don’t want longer branch hours.
This is a counterintuitive concept and is the problem with bank customer focus groups and surveys. When asked if you want your bank to have longer hours and to be opened on Saturdays the answer for nine out of ten respondents will be “Yes.” When asked to rate the importance of longer branch hours, usually branch hours get a “7” on a scale of 1 to 10 with 10 being “Highly Important.” The problem is the results of the survey don’t coincide with reality.
Part of the issue is when you ask questions like “How important are longer branch hours,” or “Are free ATM assess important” the questions are asked as though there is no trade-off or cost to the attribute. There is nothing to link desires with actual behaviors. Expensive customer service attributes like longer branch hours are given the same weight as free ATMs or “friendly and knowledgeable staff.”
Let’s look at this logically and through the lens of quantitative data. At CenterState, many of our branches are open until 4 pm Monday through Thursday. If we extended the hours until 6 pm what would happen? Would we pick up new customers?
The answer is no - At least not enough to offset the additional cost of $375 per branch per day. The other way to look at this is would the existing 1,300 customers of the branch pay the additional $0.70 in monthly charges to keep the branch open until 6 pm? The answer is that while 24% would, most would not. These economics get even worse if you talk about Saturday hours. As mobile becomes more and more widespread, fewer customers are willing to pay for, or even need, longer branch hours. Customers may say they want longer hours, but they also want 1% mortgage rates and 10% deposit rates. If faced with the choice of changing behavior for branch hours, most customers aren’t willing to sacrifice anything, thus meaning that the attribute has little value.
Having customers rate the importance of an item always seems like a good idea to get feedback. Sometimes this is the only way to gain insight into what the customer is thinking. However, our point today is to take customer service and satisfaction surveys with a grain of salt. It is always better to skip the survey data, eliminate the noise and focus on sales and usage data to find out what actually drives customer loyalty and profitability. This is an example of where testing for one year can make you smarter than 10 years worth of survey data.
A bank should link customer satisfaction with revenue or profit. If satisfaction, revenue and branch hours are correlated – start working until nightfall - At least do a six-month test. Chances are you will find that longer branch hours have little link to revenue and are probably inversely correlated to profitability. If this is the case, then you know to focus your efforts elsewhere.
Things like having a well-trained staff and mobile business banking are drivers for revenue, profit, and satisfaction. By understanding this linkage, banks can better allocate resources. Spending staff time for longer hours will most likely not pay off. Customers say they want them, and while some truly do, most do not and will not pay or sacrifice another service to gain longer hours. In fact, in some cases, your customers may want shorter hours and lower service charges.
For those customers that value longer hours, maybe the solution calls for offering video conferencing to premium account holders and then move the 125 people that use the given branch and want longer hours to pay the additional cost? Maybe, the bank can upgrade its mobile application or have longer call center hours? Maybe it is a question of finding more customers that value longer hours? Whatever the solution, the answers are not likely to be found in the easy and intuitive approach of assuming that survey answers match behavior. In many cases, the results will lead you in the wrong direction.
Submitted by Chris Nichols on March 19, 2014