The Bank of Ireland (BoI) is over 200 years old and is the second largest financial
services provider in Ireland, behind Allied Irish Bank. It has assets of £40 billion and
employs 16,000 staff. The company has sought to improve the level of its service
whilst keeping control over costs through a metric approach on the drivers of
satisfaction.
BoI has experienced several false starts in its attempt to improve service. The key
mistake in each case was failure to link initiatives to profitability. The result was a
focus upon gathering information about the customer, and metrics on the processes
that handled their business. After seven weeks of research on satisfaction and
lifetime value, BoI came to the conclusion that 80-85% of customer satisfaction and
value measurements were flawed.
Through a series of careful modifications, the Bank of Ireland(Bank of Ireland) has arrived at a survey
model that eliminates many of the usual flaws found in such surveys. The bank has
used this improved information to implement simple alterations in its services,
affecting an increase in the bank’s profitability and customer satisfaction.
A particular problem identified in surveys was linking two values with the word “and” –
for instance, “were our staff courteous “and” professional?” does not yield actionable
results. Call center staff could be professional but uncourteous, or courteous but
unprofessional. It was also found that speed of survey processing was critical if it was
to have any impact. If it took six weeks, the more change resistant staff could brush
bad news off as merely a one-off, leading the measurement system to decline in
importance.
To encourage more actionable findings, Bank of Ireland implemented a seven-point scale in
which the top two marks were for very satisfied and satisfied, the middle three for
neutral feelings, and the bottom two for dissatisfied or very dissatisfied. By so doing, it
has been better able to unravel the component parts of its key metrics.
For customer value, it has determined that service accounts for 45%, price 20%,
image 20%, and products 15%. Each of these factors has been further broken down
into specific performance attributes, each with their own values
A two-page customer satisfaction survey is now conducted every month amongst
35,000 customers. Response rates are encouraging – up to 10 per cent – because
the bank has shown that it acts on the findings. "If they believe you are serious about
it, they will fill out the survey," Patrick Wolden, head of retail marketing at BOI,
commented. The survey has enabled BoI to delve deeper into the satisfaction drivers.
For instance, “I was treated as a valuable customer” accounts for 3% of customer
satisfaction. The component parts of this driver are:
• The staff member addressed me by name;
• The staff member made eye contact;
• The staff member was courteous;
• The staff member was interested in helping me;
• The staff member thanked me.
For each of these points, training and measurement can be readily provided. BoI has
identified 35 such drivers of customer value, with 36 consequent staff issues to be
worked upon. A direct link is drawn between the value of each, and between staff and
customer satisfaction, and satisfaction with profits. Going further, these drivers can be
segmented demographically. One finding has been that for female customers, being
treated as a valued customer is four times more important than for males. For males,
interest rates are four times as important.
From this research, BoI has qualified that 31% of its customers feel valued. Amongst
those who are satisfied, 98% would recommend the bank to a friend, compared to
64% of neutrals and just 18% of those that are dissatisfied. Just 12% of satisfied
customers have bought a product from a competitor in the previous 12 months
compared to 24% of neutrals and 40% of those that are dissatisfied.
Problems were encountered in delivering this kind of segmentation. The low degree
of surname variation in Ireland made for duplication errors, whilst the absence of
postcodes or social codes to identify unique individuals also caused problems. Over
time, however, BoI has delivered a service measurement system that can be applied
down to the branch level for customer services.
From the bank’s experiences, the critical success factors that have driven its project
are as follows:
• The customer value model is based on easy-to-understand and actionable
information;
• The customer information is pragmatic rather than idealistic;
• The segmentation is based on both demographics and psychographics;
• CRM is aligned to the brand strategy and the brand experience.
Without an exact measure of ROI, there was no way of measuring any difference to
customers or lifetime value, leaving the company vulnerable to finance department
attacks, particularly in the second and third years. With this in mind BoI has delivered
a system of metrics that can quantify the impact of investments, protecting the service
budget from cutbacks pushed by the finance department, and demonstrating that
service is critical to the profitability of the bank as a whole.
BOI's program provides analysis of satisfaction drivers in a way that provides
actionable recommendations and can make a real difference to the customer
experience. Notably, the program has not required major IT investments, large
research budgets, or data warehouses to crunch data, but simply involves thinking
more about what can be changed, what is important to the customer, and then
focusing upon implementing simple solutions, many of which can be addressed
through training.
After a great deal of measured research, the Bank 365 ireland believes that its new
customer surveys have eradicated many of the previous flaws so prevalent in
surveying. As a result of this, the company has been able to more accurately
research satisfaction drivers. In addition, by demonstrating its determination to act
readily upon suggestions, the company has regularly received up to a 10% response
on its 35,000 monthly questionnaires.
Rather than investing large amounts of money in IT or research, the company has
concentrated its efforts on the contents of its questionnaires, focusing upon what is
important to its customers and ensuring that these subjects are included in the
survey. The bank has incorporated easily understandable and actionable questions
into its surveys, with any changes simply addressed in staff training.
Furthermore, the company has eliminated the risk of attack by financial departments
by developing a system of metrics in order to demonstrate the company’s service
performance in relation to its revenue streams. Through this, the bank has been able
to demonstrate that customer service is an essential factor towards the profitability of
the bank as a whole.