BANKING TIPS: The impact of poor customer service

What you need to know:

  • A few months ago, I shared why excellent customer service is important than anything else in the banking industry; It builds awareness and trust, it increases customer retention, it improves employee turnover, and it improves your brand image.

Great customer service should be the heart of banking service delivery. As competition is fiercer than ever, customer service is becoming an increasingly important factor in the banking industry and offering excellent customer service is emerging as the valuable way for banks to differentiate themselves from their competitors.

A few months ago, I shared why excellent customer service is important than anything else in the banking industry; It builds awareness and trust, it increases customer retention, it improves employee turnover, and it improves your brand image.

More importantly, customers who receive excellent customer service will improve your profits by returning to you with repeat business.

So, would you think every bank would strive to provide excellent customer service to their customers but that is not the case?

In today’s highly competitive world, a bank can gain cutting –edge not through distinguished processes, systems or technology, which can easily be duplicated, but through excellent customer service.

More than anything, a customer would like to get an excellent customer service but unfortunately, in our banking industry, customer service experience is awful.

Personally, I have experienced and witnessed poor customer services countless times in more than one bank.

Therefore, it is a challenge that needs to be addressed urgently. According to the American Express Global Customer Service Barometer survey, 96 per cent of the customers who received poor customer service will not make a complaint and approximately 88 per cent of them will take their business elsewhere.

Hence this week, I will argue the importance of the banks to offer an excellent customer experience by sharing the side effects of bad customer service.

It will damaged your reputation

If it is not bad enough to lose your customers, extending bad customer service to your clients will damage your band.

Your organization’s reputation is extremely valuable and is not something you want to lose.

However, when you extended a bad customer service to your clients, your reputation will be the first to take a hit; customers will talk about you negatively and tarnish your brand to the masses.

In the Digital World, we are living in today; customers are quick to write negative reviews for their entire social media World to see when they have experienced a bad customer service.

Several studies have shown over 90 per cent of the customers who received bad customer experience usually tell at least one other person while about 54 per cent tell at least five (5) other people.

This means your brand will lose mouth marketing which is arguably the most valuable marketing outlet a brand can have.

It kills potential sales

Bad customer service experience not only kills sales but even the prospective sales deals. Extending customer service should not be limited to your current customers only but to all interactions with anyone who is interested in doing business hence they should be treated as your customers.

Imagine after you meeting a prospective client, she/he raised a concern but you never respond back; she/he would think if they treat me this way when they try to bank me, how are they going to treat me once I am their customer? First they will not refer you to their friends, families or associates and secondly, it is worth to note that no sales leads can be converted into sales with bad customer service.

Not only you will lose customers but you run the risk of losing your best employees as well. When your organization has a customer service issue, you will have a lot of complaints and unhappy customers which leads to burnout and dissatisfaction of your best employees.

In addition, if your organization has a bad reputation, there is a high chance your top performers will leave you and no talented and skilled person in the market would want to join your organization.

Today’s customers are highly educated and knowledgeable so without customer-centric culture in your organization, it will be difficult to differentiate from your competitors.