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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”.

Passed Ave. (Net Sat.) Failed Ave. (Net Sat.)
Overall impression of entire experience 4.1 (70%) 3.4 (24%)

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.

Passed Ave. (Net Sat.) Failed Ave. (Net Sat.)
Job knowledge 4.0 (64%) 3.2 (15%)
Confidence in the agent 4.1 (71%) 3.5 (31%)
Use understandable terms 4.0 (62%) 3.4 (24%)
Professionalism 4.3 (74%) 3.8 (53%)
Interest in helping 4.1 (63%) 3.7 (40%)
Valuing customer 4.0 (59%) 3.6 (33%)
Friendliness/courtesy 4.4 (82%) 4.1 (69%)

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.

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.

——

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.


Click Here For More Information About Kinesis' Compliance Mystery Shopping

Turning Customer Advocacy on Its Head

The dominate notion of customer advocacy is not very customer centric. Its focus is on what the customer can do for the bank by referring friends, relatives, and colleagues for their banking needs. A more customer centric notion, with perhaps a stronger relationship to customer loyalty, turns this dominate notion on its head – making the bank an advocate on behalf of the customer. Customers who trust their bank to do the right thing are more likely to remain loyal.

My bank cares about me not just bottom line

Measuring customer advocacy is both simple and useful; just ask your customers if they agree with the following statement: “My bank cares about me, not just the bottom line.” I call this the customer advocacy statement. Research has demonstrated a positive relationship between agreement with this statement and loyalty to a financial institution. This makes intuitive sense; customers who agree trust the bank to do right by them and will remain loyal.

Here is how we ask the question. As part of a broader survey, we ask our clients’ customers to rate, on an agreement scale, to what extent they agree with the above statement.

Research without clear call to action elements may be interesting, but not very useful. How can a manager put this question to use?

The answer to this is two fold:

First, the response to this question can be correlated to a battery of service attributes. This will yield a means of judging the relative importance of each attribute in terms of the strength of their relationship to loyalty. Mangers now have a basis to make informed decisions as to which investments will yield the most ROI in terms of improving customer loyalty.

Second, investigate all cases where agreement to this question is low. These are customers at risk. A researcher can drill into the survey responses of these customers to determine what caused the low rating. Tracking the causes will inform management of potential causes of runoff that require attention.


Click Here For More Information About Kinesis' Research Services

Opposite Sides of the Same Coin: One Word Descriptions of the Customer Experience In Experiences with Both Positive and Negative Purchase Intent

What one word would a customer use to describe the experience at your bank?

Would your customer experience be described as professional, knowledgeable or informative, or would it be described as frustrating, disappointing, inexperienced or rushed?

One simple and elegant tool to get a picture of your customer experience is to ask customers what one word they would use to describe the customer experience.

Kinesis recently mystery shopped six major North American banks to evaluate the state of the sales and service process at these institutions and identify potential drivers of purchase intent in the customer experience. Shoppers were asked a mixture of closed-ended questions to evaluate the presence or frequency of specific behaviors, and open-ended questions to gather the qualitative impressions of these behaviors on the shoppers – in short the how and why behind what the shopper felt. Part of this research plan was to ask shopper to describe their experience with one word. Finally, to provide a basis to evaluate the effectiveness of each of these brand attributes, 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 which attributes tend to be used to describe experiences with positive purchase intent compared to those with negative purchase intent.

The descriptions we received from mystery shoppers ranged from professional, knowledgeable, and informative to disappointing, frustrating and rushed. This list of adjectives alone was interesting; however, the purpose of this research was to identify drivers of purchase intent, in part to differentiate experiences with positive purchase intent compared to those with negative purchase intent.

So…how did the customer experience in mystery shops that reported positive purchase intent differ from those that reported negative purchase intent? –OR- Specifically, what adjectives did shoppers use to describe the experience that created positive purchase intent compared to those that created negative purchase intent?

Shoppers who reported purchase intent used the following adjectives to describe the experience.

Adjective Pos PI

From this word cloud the drivers of positive purchase intent can be deduced.  Potential bank customers respond to bankers who are professional, informative, knowledgeable, friendly, pleasant, helpful and attentive.  What customers want is a banker who cares about their needs and has the ability to meet those needs.

Conversely, shoppers who reported negative purchase intent as a result of the customer experience used the following adjectives to describe the customer experience.

Adjective Neg PI

In comparison to the shops with positive purchase intent, the list of adjectives that describe shops with negative purchase intent is a little more nuanced.  Adjectives like frustrating and disappointing are illuminative but not necessarily actionable; while adjectives such as rushed, inexperienced, indifferent, and pushy provide clear direction with respect to elements of the customer experience that undercut purchase intent.

Bottom line: Customers want to do business with bankers who care about their needs and have the ability to satisfy those needs, and reject bankers who are inexperienced, indifferent, pushy or rush the customer through the transaction.

Two Sides of The Same Coin
Positive Purchase Intent Negative Purchase Intent
Professional

Informative/ Knowledgeable

Friendly

Pleasant

Helpful

Attentive

Rushed

Inexperienced

Indifferent

Pushy

When you look at these adjectives side by side, aren’t these opposite sides of the same coin?


Click Here For More Information About Kinesis'; Bank Mystery Shopping

A Picture is Worth a Thousand Words: A Simple and Elegant Tool Determines How Customers Perceive Your Brand

The way to gain a good reputation is to endeavor to be what you desire to appear.
– Socrates

Brands have personality. Brand personality is a set of characteristics associated with the positioning, products, price and service mix offered by a company.

How would you describe your brand?

I’m often surprised how often clients are unable to answer this simple question. Even those who have a defined set of brand characteristics don’t know to what extent customers’ perceptions of the brand match the bank’s defined brand. Often what is needed is a cold hard look in the mirror to determine how they are perceived by their customers. What brand personality does our customer experience create in our customer’s minds?

As often in life, the best solutions to a given problem are in fact very simple. One simple and elegant tool is to ask customers to describe your customer experience with just one word.

A picture is worth a thousand words. When we asked a bank’s customers to describe the customer experience with one word the results produced the following word cloud:

Adjectives

With one simple question, we produced a simple and elegant depiction of how customers perceive the brand as a result of a recent experience.

This cold hard look in mirror can be painful; certainly it is tough to hear, as in the case above, that some of your customers might consider you disappointing, indifferent or pushy.  But once you determine how you are perceived, you can figure out how you want to be perceived, and begin addressing any gaps between the two.


Click Here For More Information About Kinesis' Research Services

Not All Service Attributes Are Equal: Retail Bank Transaction Drivers of Loyalty

Research has determined the business attribute with the highest correlation to profitability is customer loyalty.  Customer loyalty lowers sales and acquisition costs per customer by amortizing these costs across a longer lifetime – leading to some extraordinary financial results.  In one study of the retail banking industry, a 5% increase in customer loyalty translated into an 85% increase in profits.[1]

Customer loyalty is driven by the entire relationship with bank.  Image, positioning, products, price and service all mix together in the customer’s’ value equation as customers make a continual decision to remain loyal.

What customer service attributes drive customer loyalty?

This article summarizes research into specific transaction service attributes with the intent of identifying which transaction attributes drive customer loyalty, and provides an analytical tool to help managers determine which attributes will yield the highest potential for ROI in terms of improving customer loyalty.

In order to determine transaction attributes which drive customer loyalty, Kinesis surveyed bank customers who had recently conducted a transaction at a branch.

With respect to the transaction, customers were asked to rate the following service attributes:

  • Professional dress
  • Branch cleanliness
  • Prompt greeting
  • Greeting made customer feel welcome
  • Dependable and accurate
  • Prompt service
  • Willingness to help
  • Job knowledge
  • Interest in helping
  • Best interests in mind
  • Actively listened to needs
  • Ability of bank personnel to help achieve financial needs
  • Desire of bank personnel to help customers achieve financial goals
  • Commitment to community

The next step in the research is to capture a measurement of loyalty against which to compare these attributes.

Measuring customer loyalty in the context of a survey is difficult.   Surveys best measure attitudes and perceptions. Loyalty is a behavior based on rational decisions customers make continually through the lifecycle of their relationship with the bank.  Survey researchers therefore need to find a proxy measurement to determine customer loyalty.  A researcher might measure customer tenure under the assumption that length of relationship predicts loyalty.  However, customer tenure is a poor proxy.  A customer with a long tenure may leave the bank, or a new customer may be very satisfied and highly loyal.

Measuring customer loyalty in the context of a survey is difficult.   Surveys best measure attitudes and perceptions. Loyalty is a behavior based on rational decisions customers make continually through the lifecycle of their relationship with the bank.  Survey researchers therefore need to find a proxy measurement to determine customer loyalty.  A researcher might measure customer tenure under the assumption that length of relationship predicts loyalty.  However, customer tenure is a poor proxy.  A customer with a long tenure may leave the bank, or a new customer may be very satisfied and highly loyal.

Kinesis proposes a model for estimating customer loyalty based on two measurements: likelihood of referral and customer advocacy.  Likelihood of referral captures a measurement of the customer’s likelihood to refer the bank to friend, relative or colleague.  It stands to reason, if one is going to refer others to the bank, they will remain loyal as well.  Because customers who are promoters of the bank are putting their reputational risk on the line, this willingness to put their reputational risk on the line is founded on a feeling of loyalty and trust.  This concept of trust is perhaps more evident in the second measurement,: customer advocacy.  Customer advocacy is captured by measuring agreement with the following statement: “My bank cares about me, not just the bottom line.”  Customers who agree with this statement trust the bank to do right by them, and not subjugate their best interests to profits.  Customers who trust their bank to do the right thing are more likely to remain loyal.

Kinesis uses likelihood of referral, hereafter labeled “Promoter,” and customer advocacy, hereafter labeled “Trust,” to calculate an estimate of the customer’s loyalty.  Imagine a plot where each customer’s Promoter score is plotted along one axis and the Trust score plotted along the other.  Using this plot we can calculate the linear distance between the perfect state of the highest possible Trust and Promoter ratings.  This distance yields a loyalty estimate for each customer, where the lower the value, the higher the estimate of loyalty – low values are good.[i]

Trust Promoter Plot

See Using Promoter and Trust Measurements to Calculate a Customer Loyalty Index for a complete description of this methodology.

Calculating a loyalty index has value, but limited utility.  A loyalty index alone does not give management much direction upon which to take action.  One strategy to increase the actionably of the research is to use this index as a means to identify the service attributes that drive customer loyalty.  Not all service attributes are equal; some play a larger role than others in driving customer loyalty.

So…how does the research determine an attribute’s role or relationship to customer loyalty?  One tool is to capture satisfaction ratings of specific service attributes and determine their correlation to the loyalty statistic.  The Pearson correlation coefficient is a measure of the strength of a linear association between two variables.

Comparing the correlation of the above service attributes to this loyalty estimate yields the following Pearson Correlation for each attribute:

Pearson Coefficient

Want to help me achieve financial goals

-0.69

Commitment to community

-0.66

Ability to help achieve financial goals

-0.64

Best interests in mind

-0.60

Greeting made customer feel welcome

-0.56

Interested in helping

-0.56

Willing to help

-0.55

Prompt service

-0.51

Actively listened to needs

-0.50

Prompt greeting

-0.49

Dependable and accurate

-0.45

Professional dress

-0.42

Knew job Job knowledge

-0.41

Branch attractive

-0.39

Branch clean

-0.37

Note the Pearson values are negative; the loyalty estimate is an inverse, where lower values indicate a stronger estimate of loyalty.  As a result the stronger negative correlation translates into a correlation to our estimate of loyalty.

The four attributes with the highest correlation to loyalty are:

  1. Want to help me achieve financial goals,
  2. Commitment to community,
  3. Ability to help achieve financial goals, and
  4. Having my best interests in mind.

Two common themes in the top-four attributes are empathy and competence.  Bank customers value relationships with banks that care about their needs and have the ability to satisfy those needs.  Again, customer loyalty is driven by the entire relationship with bank.  However, in terms of transactional service, customers clearly value empathy and competency and will reward banks who deliver on these two attributes with loyalty.


[i] The mathematical equation for this distance is as follows:

Loyalty Index Equation

Where:

T = Trust rating

P = Promoter rating

ST = Number of points on the Trust scale

SP = Number of points on the Promoter scale

 


[1] Heskett, Sasser, and Schlesinger The Service Profit Chain, 1997, New York: The Free Press, p 21


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It’s Personal: Drivers of Positive Impressions of the Branch Experience

What impresses customers positively as a result of a visit to your branch?

To answer this and other questions, Kinesis conducted research into the efficacy of the branch sales process and identified several service and sales attributes that drive purchase intent.  (See the insert below of a description of the methodology).

In our observational research of 100 retail banking presentations, mystery shoppers were asked to describe what impressed them positively as a result of the visit to the branch.   Excluding the branch atmosphere, the five most common themes contained in these open-ended comments were:

  • Attentive to Needs/ Interest in Helping/ Personalized Service,
  • Professional/ Courteous/ Not Pushy, Positive Greeting,
  • Friendly Employees, and
  • Rep. Product Knowledge/ Informative/ Confidence in Rep.

In an effort to understand the relative importance of these behaviors in driving purchase intent, shoppers were asked to rate their purchase intent, as a result of the presentation, as if they had been an actual customer.  Shops were then grouped into those with positive and negative purchase intent and compared to each other.

Of these drivers of a positive impression, three have positive relationships to purchase intent – they tend to be present with greater frequency in shops with positive purchase intent compared to those with negative purchase intent.

 

Reason for Positive Purchase Intent

Relative Frequency Positive to Negative Purchase Intent

Rep. Product Knowledge/ Informative/ Confidence in Rep.

2.7

Attentive to Needs/ Interest in Helping/ Personalized Service

2.5

Friendly Employee

2.3

The banker’s product knowledge was present 2.7 times more frequent in shops with positive purchase intent relative to shops with negative purchase intent.  Similarly, attention to needs and personalized service was present 2.5 times more in shops with positive purchase intent compared to those with negative purchase intent.  Finally, shoppers were 2.3 times more likely to cite the friendliness of the bankers in shops with positive purchase intent relative to negative.

The observations contained within this research are not rocket science.  What customers want, what drives purchase intent, is personal: attention to needs, interest in helping, personalized service, professional, courteous and friendly encounters.

Methodology

To evaluate the state of the in-branch sales process, Kinesis mystery shopped 100 branches among five banks with significant North American footprints.  Among the objectives of the study were to:

1) Define the sales process among different institutions.

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, and open-ended questions to gather the qualitative impressions of these behaviors on the shoppers – in short the how and why behind how the shopper felt.  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.


Click Here For More Information About Kinesis'; Bank Mystery Shopping

It’s Personal: Retail Banking Sales and Closing Behaviors That Drive Purchase Intent

There is continued discussion about the branch’s role in the future of banking.  The current consensus is it will continue to evolve from a transactional center to a sales center.  Banking is a professional service.  To avoid commoditization and selling on features other than rates and fees, a professional and effective sales process is required.

Our research into the efficacy of the branch sales process has identified several service and sales attributes that drive purchase intent.  (See the insert below for a description of the methodology).

This article focuses specifically on closing behaviors, attempting to identify best practices in terms of driving purchase intent.

In short, for closing behaviors to be effective, the banker must first demonstrate competence and sincere concern for the customer’s best interests and needs.  Closing behaviors without this predicate can be very dangerous to the sale.

What are the most common closing behaviors?

In our observational research of 100 retail banking presentations, key closing and presentation behaviors were observed in approximately two thirds of the sales presentation.

Express interest in your business or make feel valued as a customer

70%

Ask for the business or some commitment to action

70%

Discuss products in terms of benefits designed to meet needs

68%

Make comment expressing value of banking with the bank

63%

Asking for the business and making the shopper feel valued as a customer were the most common, followed closely by discussing products in terms of benefits designed to meet needs, and finally by expressing the value of banking with the bank.

Which behaviors are most effective?

To answer which of these four behaviors are most effective, let’s look at their relationship to the mystery shoppers purchase intent as a result of the sales presentation.

Closing Chart 1

Of these four behaviors, expressing interest or making the customer feel valued as a customer has the strongest relationship to purchase intent. This behavior was present 3.6 times more frequent in shops with positive purchase intent relative to those with negative purchase intent.

What drives feeling valued as a customer?

Now, let’s take a look at the most significant behavior.  What drives feeling valued as a customer?  What caused shoppers to feel valued?  To gain insight into this, Kinesis asked shoppers an open-ended question regarding how the banker expressed interest in their business.  An analysis of the responses to this question is instructive.

When these responses are grouped by theme they generally group into four themes:

Closing Chart 2

Looking at these comments with respect to whether or not the shopper reported positive purchase intent, two of these themes have a positive relationship to purchase intent: personal attention (45% for positive purchase intent compared to 0% for negative) and concern for needs (43% in shops with positive purchase intent compared to 11% for shops with negative purchase intent).

Comments with POSITIVE relationship to purchase intent.
How expressed interest/Made feel valued as customer…

Positive Purchase Intent

Negative Purchase Intent

Personal/ Full Attention/ Not Rushed

45%

0%

Sincere/ Best interests in mind/ Concern for needs

43%

11%

The other two behaviors have a negative relationship to purchase intent. One of these is both significant and instructive.

Comments with NEGATIVE relationship to purchase intent.
How expressed interest/made feel valued as customer…

Positive Purchase Intent

Negative Purchase Intent

Offer to open account/ Effort to get business

6%

61%

Informative/ Answered questions

17%

50%

A more overt effort to get the business, including opening the account, was present ten times more often in shops with negative purchase intent (61%) compared to positive purchase intent (6%).  An effort to ask for the business without appearing to have the customer’s best interests in mind or giving the customer personal attention will not drive purchase intent.  While asking for the business is an important part of any professional sales presentation, when doing so, the ground needs to be prepared by making the customer feel you have their best interests in mind.  Otherwise, the banker can seriously undermine the presentation.

As branches continue to evolve from a transactional to a sales center, it is important not to divorce service from sales.  Good sales is good service.  The sales behavior with the strongest relationship to purchase intent is expressing interest in the customer and making them feel valued.  The most effective way to make customers feel valued and interested is to provide them your full attention and sincerely demonstrate concern for the customers needs and best interests.

Visit the next article in this series.   Beyond Needs Analysis: Asking Motivation Questions to Drive Purchase Intenthttp://bit.ly/11sK9vG

 

———–

Methodology

To evaluate the state of the in-branch sales process, Kinesis mystery shopped 100 branches among five banks with significant North American footprints.  Among the objectives of the study were to:

1) Define the sales process among different institutions.

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, and open-ended questions to gather the qualitative impressions of these behaviors on the shoppers – in short the how and why behind what the shopper felt.  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.

 


Click Here For More Information About Kinesis'; Bank Mystery Shopping

Beyond Needs Analysis: Asking Motivation Questions to Drive Purchase Intent

Effective profiling of customers has long been considered a key component of any sales process. Questioning customers is commonly referred to as needs analysis as many questions revolve around client needs, but how effective are needs questions in the efficacy of a sales presentation? Our research suggests the ROI potential of moving probing beyond basic needs analysis and including a different type of question – one designed to get at client motivations – not just needs.

shutterstock_130170563

To evaluate the state of the in-branch sales process, Kinesis mystery shopped 100 branches among five banks sharing national service areas. Among the objectives of the study were to:

1) Define the sales process among different institutions, and

2) Evaluate the effectiveness of specific sales behaviors.

Shoppers were asked a mixture of closed-ended questions to evaluate the presence of specific behaviors, and open-ended questions to gather the qualitative impressions of these behaviors on the shoppers – in short, the how and why behind how the shoppers felt. Finally, to provide a basis for an evaluation of the effectiveness of each sales behavior, shoppers were asked to rate their purchase  intent as a result of the visit. This purchase intent rating provides a means of evaluating what behaviors tend to be present when positive purchase intent is reported as opposed to negative purchase intent, revealing which sales behaviors have the most ROI potential in terms of driving purchase intent.

10 Most Frequent Probing Questions

In order to evaluate the profiling process, shoppers recorded what profiling questions were asked of them as part of the sales presentation.

The table on the third page of this article displays the frequency in which 29 different questions were asked as part of the sales presentation. Of the ten most frequently asked profiling questions, eight asked about the customers’ needs or
situation.

The subject matter of these eight needs/situation questions were:

– Service interested in
– Other banking relationships
– Current banking products
– Employment status/situation
– Nature of online banking use
– Nature of savings accounts held
– Nature ATM use
– Credit card use

Another of the ten most frequently asked questions asked about the purpose of the account.

The remaining question in this top ten is far more interesting. Two-thirds of the bankers asked about the customers’ expectations of a bank or what are they looking from a bank.

While we have observed that nine out of the ten most common profiling questions either ask about the purpose of the account or the customers’ needs/situation, with one question about the customers’ expectations, the question remains, what are the most effective profiling questions?

10 Most Effective Probing Questions

In addition to the frequency with which questions were asked, the table at the conclusion of this article also displays the strength of the relationship of each probing question to the presentation’s purchase intent rating. The strength of the relationship to purchase intent is expressed as the ratio of the presence of each question in presentations with positive purchase intent to those with negative purchase intent. A ratio of 2.0 means the specific question was asked twice as often in shops with positive purchase intent compared to those with negative purchase intent.

Looking at the ten probing questions with the strongest relationship to purchase intent, only four ask about customer needs/situation:

– Nature of telephone banking use
– Co-account holders
– Number of checks written
– Past banking products/services

Another three ask about balances:

– Average checking balance
– Average savings balances
– Minimum checking balance

And three more ask an importance or motivation question:

– What do you like about your bank?
– What don’t you like about your bank?
– What are your expectations from a bank?

While only one importance/motivation question is in the top 10 in terms of frequency asked, three of these questions are in the top 10 in terms of their relationship to purchase intent.

A client of mine calls these importance/motivation questions, “high-gain questions.” High-gain questions are questions designed to get to the clients’ motivations – what drives them? What do they want from a bank?

What do you like about your bank?” – was present a whopping 6.2 times more frequently in shops with positive purchase intent relative to negative purchase intent.

What are your expectations of a bank?” – was asked 3.1 times more in shops with positive purchase intent.

What don’t you like about your bank?” – was asked 2.8 times more in shops with positive purchase intent.

These and others like them are extremely powerful questions, in effect asking the customer to tell the banker what they want in a banking relationship, providing a road map for the sales presentation. In fact, our research indicates the most effective sales presentations were built around responses to these high-gain questions.

These observations suggest asking prospective customers high-gain questions to identify their motivations and building a sales presentation around customer motivations will yield a greater ROI in terms of driving purchase intent.

Question

Frequency Asked

Effectiveness*

Services are you interested in

93%

1.1

Where do you currently bank/other banking relationships

82%

1.1

Current banking products/services

73%

1.9

Your employment status/situation

68%

1.1

Purpose of the account (personal, household, business)

68%

1.6

Your expectations of a bank / What are you looking for in a bank?

67%

3.1

The nature of your online/Internet banking use

65%

1.5

Savings Accounts

65%

1.7

The nature of your ATM use

58%

1.9

Credit cards

55%

1.3

Minimum checking account balance typically carried

52%

2.8

The nature of your mobile/smart phone banking use

50%

1.6

Average checking account balance carried

50%

3.4

What don’t you like about your bank

42%

1.9

Do you like loyalty programs that offer points or awards for use of such things as credit or debit cards

42%

2.8

Past banking products/services

40%

2.7

Nature of debit card use at retailers

38%

1.8

Your family status (married, single, children, etc)

38%

1.9

Will there be any co-account holders (such as a spouse or child)

37%

7.1

What do you like about your bank

35%

6.2

Short term financial goals

33%

2.7

CDs (Certificate of Deposit)

32%

1.1

Typical savings account balance

32%

3.9

Long term financial goals (retirement, college for kids, etc)

32%

2.1

Number of checks you write

27%

3.0

Mortgages

23%

0.9

Investments other than savings, CDs or money market accounts (investments such as Mutual Funds, IRA, Stocks, Bonds).

23%

1.8

Telephone banking

22%

8.0

Car loans

18%

2.1

10 Most FREQUENTLY ASKED Probing Questions
Services are you interested in

93%

Where do you currently bank/other banking relationships

82%

Current banking products/services

73%

Your employment status/situation

68%

Purpose of the account (personal, household, business)

68%

Your expectations of a bank / What are you looking for in a bank?

67%

The nature of your online/Internet banking use

65%

Savings Accounts

65%

The nature of your ATM use

58%

Credit cards

55%

10 Most EFFECTIVE Probing Questions**
Telephone banking

8.0

Will there be any co-account holders (such as a spouse or child)

7.1

What do you like about your bank

6.2

Typical savings account balance

3.9

Average checking account balance carried

3.4

Your expectations of a bank / What are you looking for in a bank?

3.1

Number of checks you write

3.0

Minimum checking account balance typically carried

2.8

Do you like loyalty programs that offer points or awards for use of such things as credit or debit cards

2.8

Past banking products/services

2.7

* Effectiveness defined by ratio of the frequency the question is asked in shops with positive purchase intent relative to the frequency in shops with negative purchase intent (for example a value of 2.0 means the question is twice as likely to be asked in shops with positive purchase intent relative to those with negative purchase intent.

** Probing questions with the strongest relationship to purchase intent, again defined by the ratio of their frequency in shops with positive purchase intent compared to those with negative purchase intent.

For more information contact Eric Larse, co-founder of Seattle-based Kinesis, which helps companies plan and execute their customer experience strategies. Mr. Larse can be reached at elarse@kinesis-cem.com.


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Same-Branch Deposit Growth & The Customer Experience

It seems like only yesterday the branch was history. Do you remember twenty years ago when everyone predicted the death of the branch in favor of alternative delivery channels? How things have changed.

Now, the branch is seen as critical to delivering value to not only customers but shareholders as well. Now it appears branches and, more specifically, same-branch deposit growth is a key driver of shareholder value. First Manhattan Consulting Group has determined that other than return on equity and revenue-per-share growth, same-branch deposit growth is the strongest driver of total shareholder return. Furthermore, they quantify this relationship, concluding that 60% of the variance in shareholder return is explained by organic retail deposit growth. The shares of institutions with higher same-branch deposit growth tend to trade at higher multiples-to-earnings than institutions with lower same-branch deposit growth rates.

With the understanding that same-branch deposit growth is a key driver of shareholder value, Kinesis has endeavored to test and understand the relationship, if any, between the customer experience and same-branch deposit growth. We have determined that both purchase intent and same-branch deposit growth appears to be strongly associated with behaviors associated with reliability, empathy, and assurance.

To test the relationship between same-branch deposit growth, Kinesis has conducted thousands of mystery shops of a broad spectrum of institutions ranging in size from community banks with two branches to very large institutions with branch networks in the thousands. To conduct this test, Kinesis used a measurement instrument based on the five-dimensional SERVQUAL model, which defined the customer experience by the following five-dimensions: tangibles, reliability, responsiveness, empathy and competence.

The specific objectives of this analysis were to:

1) Test specific service behaviors/attributes against purchase intent to determine which behaviors, if any, appear to correlate with purchase intent.

2) Evaluate the relationship between the presence of these behaviors and branch deposit growth.

3) Test the efficacy of a mystery shop scoring system and branch deposit growth.

Kinesis first worked to test the relationship between elements of the customer experience and purchase intent, and to determine key drivers of purchase intent in the customer experience. As part of the solution to achieve this end, Kinesis asked each shopper, how the experience would have influenced their intention to purchase had they been an actual customer. Responses to this inquiry were collected on a 5-point scale ranging from “significantly increased” to “significantly decreased” the intention to purchase. Furthermore, immediately following this purchase intent rating, Kinesis asked each shopper to explain why they rated purchase intent as they did.

To help assure the validity of the analysis, two independent analysis plans were applied to the purchase intent data. First, the open-ended comments regarding why the shopper rated their purchase intent as they did were grouped according to common themes and according to the purchase intent rating. Second, the balance of the responses to the mystery shop questionnaire was cross tabulated by the purchase intent rating to determine which specific behaviors correlated most closely with purchase intent.

The results of this first part of the analysis plan revealed the following:

Once a shopper enters the branch, branch personnel clearly drive purchase intent. Over two-thirds (69%) of the reasons given for positive purchase intent are the result of branch personnel, only about one-in-five (18%) were product related, while 8% were due to the branch atmosphere.

The branch personnel driven elements include: generally positive, friendly service (26%), product knowledge/informative/confidence in the personnel (16%), attentive to needs/interest in helping/personalized service (14%), and professional/respectful/not pushy employees (10%). Prospective customers want confidence and trust not just in the bank, but also in the people who are the human face of the institution.

The second part of the analysis plan revealed very strong correlations between the following behaviors and purchase intent:

  • Friendly & Courteous
  • Greeting
  • Interest in Helping
  • Discuss Benefits & Solutions
  • Promised Services Get Done
  • Accuracy
  • Professionalism
  • Express Appreciation
  • Personalized Comment (i.e., How are you?)
  • Listen Attentively

Kinesis then grouped these highly correlated behaviors into the five-dimensional SERVQUAL model and found they group into three of the five-dimensions (reliability, empathy, and assurance) as follows:

  1. Reliability: Promised Services Get Done; and Accuracy
  2. Empathy: Interest in Helping; Discuss Benefits & Solutions; Personalized Comment (i.e., How are you?); and Listen Attentively
  3. Assurance: Friendly & Courteous; Greeting; Professionalism; and Express Appreciation

Intuitively, this result makes sense, beyond the basic requirement of reliability; customers also want to interact with bank personnel who have empathy (care about their best interest) and assurance (the knowledge and courtesy of employees and their ability to convey trust and confidence).

To evaluate the link between the customer experience, and the above behaviors, to the bottom line, Kinesis compared mystery shop results to same-branch deposit growth using publicly available deposit data from the FDIC. This analysis determined that branches with above average frequencies of reliability, empathy and assurance behaviors experienced 26% stronger three-year branch deposit growth rate than branches with low frequencies of these behaviors.

Finally, to evaluate the efficacy of the mystery shop scoring methodology, mystery shop scores were compared to branch deposit growth. This analysis revealed branches with above average mystery shop scores experienced a 78% greater branch deposit growth compared to those with below average mystery shop scores.

Our research and experience leads us to the conclusion that there is a link between the customer experience and such critical financial metrics such as same-branch deposit growth. With an understanding of which attributes drive this relationship, managers can now focus training, incentives and other management techniques on reinforcing empathy and assurance among its personnel, and make a financial case to all stakeholders (management, employees and shareholders) that the customer experience does drive financial performance.


Click Here For More Information About Kinesis'; Bank Mystery Shopping

Cheer Up: Improve your reps’ job satisfaction to reduce turnover – and raise sales

Author: Julia Chang, Staff Writer, Sales & Marketing Magazine
Reprinted from the Sales & Marketing Magazine
June, 2004

Cheer Up: Improve your reps’ job satisfaction to reduce turnover – and raise sales

When the economy soured and the number of sales jobs shrunk, managers had little incentive to improve job satisfaction. But with the market getting stronger, managers could find themselves dealing with flight risks: According to a recent survey by job site CareerBuilder.com, four in 10 sales professionals plan to look for better jobs in 2004.

Internal unrest can lead to low morale, and smart managers will work to mitigate discontent.

“You’ve got to catch dissatisfaction quickly,” says Jim Campbell, president of Performance Unlimited, a sales coaching and training firm based in Albuquerque, New Mexico. “Even if you have one person who’s unhappy, it spreads. It’s the whole rotten-apple-spoils-the-barrel thing.”

Campbell recalls one recent client who suffered from a bad case of employee dissatisfaction. The client, a bank, was having problems with its 11-member internal sales and service department, whose job it was to train branch tellers and loan officers to sell new services. The department had recently expanded, but there was no unity among new and veteran members; a few even made it clear they were looking for new jobs. The bank’s performance was going south, and the manager was told he had to turn it around it around in six months – or lose his job.

Through team-building training, Campbell focused on topics like communication skills, creating a well-functioning team, and the effect of attitude on performance. Additionally, he held follow-up sessions for several weeks afterward to see how these new skills were being executed. He also individually coached the manager on his motivational and performance management skills. Team unity improved, and even those most vocal about their unhappiness stayed on. “They actually wanted to be part of the team, they just didn’t know how,” Campbell says, “They finally saw they could accomplish more in a team than as individuals.”

Happy employees yield more business. Campbell’s client saw the number of new loans and additional services sold increase following training, because employees were more enthusiastic in their training of branch workers. “In doing interviews with clients, we definitely see a link between customer satisfaction and employee satisfaction,” says Eric Larse, Managing Member of Kinesis, a market research firm based in Seattle, that specializes in the customer experience. But, he says, an employee satisfaction culture has to start at the top. “It’s a strategic issue that rests at the highest levels of the organization.”


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