Compliance and Sales Effectiveness Go Hand In Hand

Compliance and service quality are not mutually exclusive. In fact there is a positive relationship between compliance and, not only service quality, but stronger sales.

To understand the relationship between Truth in Savings Act (TISA) compliance behaviors and the customer experience, Kinesis mystery shopped five US banks with the objective of evaluating TISA compliance and the customer experience.  A description of the methodology is at the conclusion of this post.

Employees who correctly quoted APY provided a more satisfactory experience. The overall impression of the entire experience for shops that passed the TISA disclosure requirements was 4.1 compared to 3.4 for shops that failed, on a scale of 1 to 5, where 1 is “Extremely Dissatisfied” and 5 is “Extremely Satisfied”.

Beyond the overall satisfaction with the experience, significant differences also exist across all the individual service attributes measured. In all of the following seven attributes measured, shops which passed the compliance test consistently had higher attribute satisfaction ratings.

Not surprisingly, there is a relationship between compliance and job competence. Employees who comply with the TISA are more likely to demonstrate competence in other aspects of their job. Job knowledge, confidence in the employee, use of understandable terms, and professionalism are the four attributes with the largest gaps between shops that passed and shops that failed.

Additionally, employees who pass the compliance test are more skilled at connecting with the potential customer; receiving higher average ratings for interest in helping, valuing the customer and even friendliness and courtesy.

Now, as if compliance risk and customer service were not strong enough cases for TISA compliance, what about the sale? What about sales effectiveness?

To evaluate the sales effectiveness of the presentation, shoppers were asked to rate their purchase intent as a result of the interaction. The following chart illustrates the distribution of the purchase intent rating for shops which passed the compliance test compared to shops which failed:

Shops which complied with TISA requirements had significantly higher purchase intent compared to shops that failed. Shops which passed exhibited a net positive purchase intent of 46% (46% more shops received positive purchase intent ratings compared to negative). On the other hand, shops which failed the TISA evaluation received a net negative purchase intent of minus 9%, (9% more shoppers assigned negative purchase intent than positive).

There is a relationship between TISA compliance and the customer experience. Employees who are skilled at compliance behaviors, exhibit similar superior service and sales skills compared to those with weaker skills.

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Methodology

To investigate the relationship between the overall customer experience and compliance, Kinesis mystery shopped 50 branches and the call centers of five banks with significant North American footprints. Among the objectives of the study were to:

1) Evaluate Truth in Savings act compliance, specifically the presence and timing of Annual Percentage Yield quotes, and

2) Evaluate the effectiveness of specific sales behaviors.

Shoppers were asked a mixture of closed-ended questions to evaluate the presence or frequency of specific behaviors, as well as to rate various service attributes with 5-point scales. Finally, to provide a basis to evaluate the effectiveness of each sales behavior, shoppers were asked to rate their purchase intent as a result of the visit. This purchase intent rating was then used as a means of evaluating what behaviors tend to be present when positive purchase intent is reported as opposed to negative purchase intent.