Customer Experience Measurement Implications of Changing Branch Networks
The branch network is evolving based on banking’s changing economic model as well as changing customer expectations and behaviors. As the branch network evolves measurement of the customer experience within the branch channel will need to evolve as well to fit both the changing economic model and customer behaviors.
Deb Stewart’s recent article “The Branch Shrinks” in the June 2014 edition of ABA Bank Marketing and Sales used the experience of Sweden as an example of how the branch operating model in the US may evolve in response to these changes. Ms. Stewart describes Sweden’s branch operating model’s evolution in four primary ways:
- Branches will be less monolithic, with branches tailored to location and market;
- Branches will be much smaller and more flexible;
- Customer facing technology will be more prevalent; and
- Branch staffing both decline and change with increased use of “universal” associates who will conduct a wider range of functions, transforming tellers to sellers.
The article goes on to describe five case studies for innovative branch design in the United States.
Most commentary suggests branch networks will be redefined in three primary ways:
- Flagship Branches: Hubs to a hub and spoke model offering education, advice, and serving as sales centers.
- Community Centers: Branches smaller in scope focused on community outreach driving loyalty.
- Expanded ATMs: These will serve as transaction centers at in-store or other high traffic sites.
In short, there will be a variety of branch types, many staffed with fewer employees, each with a unique role, presenting three customer experience challenges:
- Consistently delivering on the brand promises despite disparate branch types – Does the customer experience reinforce the overall brand promise?
- Fidelity to each branch’s unique role within network – Does the customer experience fit the specific role and objectives of the branch?
- Huge challenges associated with a transformation of skills to universal associates – How do we conduct a massive transition of skills of tellers into financial advisors, fluent in all bank products, and manage these associates fewer less employees on site.
Flagship Branches
The customer experience at flagship branches will best be measured much like it is at traditional branches today with a mix of customer satisfaction surveys and mystery shopping. A random sampling across all interaction types will ensure that all of the services offered at these education and sales centers are evaluated. Mystery shopping should focus scenarios on sales scenarios across all retail product lines, evaluating sales effectiveness, quality of experience and compliance.
Community Centers
Community Center branches offer the greatest need to refine customer experience measurement, and opportunity to use it as a management tool. Universal associates, with broad skill requirements working in lightly staffed branches, mandate that the customer experience be monitored closely. Post-transaction surveys across all interaction types should be used to evaluate employee skill level, appropriate resolution of inquiry, and consistency of service with brand promise. An automated email or mobile survey will provide managers with a near real time view of the customer experience at fraction of the cost of other data collection methods. Mystery shopping across a broad range of scenarios will evaluate employee skill level and appropriate referral practices for mortgage and investment services to Flagship branches or Video Bankers. Fewer employees will allow for better tracking of the customer experience at the employee level, which will be a necessity given the increased expectations on these employees with less onsite management.
Expanded ATMs
As with the other branch types, a random sampling of all interaction types will yield a valid sample of transactions these branches perform. As with the other branch types, automated email or mobile surveys will provide a near real time view of the experience. Mystery shopping may be used to evaluate service interactions with video tellers, investment advisors or tellers.
Evolution of the branch network, particularly with changes in the staffing model, will require changes in how the customer experience is monitored. The good news is survey technology is evolving as well, and will give managers the opportunity to gather intelligence on the customer experience in a highly efficient and productive manner.
For more posts in this series, click on the following links:
- Introduction: Best Practices in Bank Customer Experience Measurement Design
- Customer Surveys: Best Practices in Bank Customer Experience Measurement Design
- Mystery Shopping: Best Practices in Bank Customer Experience Measurement Design
- Leverage Unrecognized Experts in the Customer Experience: Best Practices in Bank Customer Experience Measurement Design – Employee Surveys
- Filling in the White Spaces: Best Practices in Bank Customer Experience Measurement Design – Social Listening
- A New Look at Comment Cards: Best Practices in Bank Customer Experience Measurement Design – Customer Comments & Feedback
SERVQUAL Model: A Multi-Item Tool for Comparing Customer Perceptions vs. Expectations
Looking for a tried and true model to understand your service quality?
The SERVQUAL model is an empiric model that has been around for nearly 30 years. While not new, it is a foundation of many of the service quality and customer experience concepts in use today. It is a gap model designed to measure gaps between customer perceptions relative to customer expectations.
SERQUAL describes the customer experience in terms of five dimensions:
1. TANGIBLES – Appearance of physical facilities, equipment, personnel, and communication materials
2. RELIABILITY – Ability to perform the promised service dependably and accurately
3. RESPONSIVENESS – Willingness to help customers and provide prompt service
4. ASSURANCE – Knowledge and courtesy of employees and their ability to convey trust and confidence
5. EMPATHY – Caring, individualized attention the firm provides its customers
Each of these five dimensions is measured using a survey instrument consisting of individual attributes which role up into each dimension.
For example, each of the five dimensions may consist of the following individual attributes:
Tangibles
• Appearance/cleanliness of physical facilities
• Appearance/cleanliness of personnel
• Appearance/cleanliness of communication/marketing materials
• Appearance/cleanliness of equipment
Reliability
• Perform services as promised/right the first time
• Perform services on time
• Follow customer’s instructions
• Show interest in solving problems
Responsiveness
• Telephone calls/other inquiries answered promptly
• Willingness to help/answer questions
• Problems resolved quickly
Assurance
• Knowledgeable employees/job knowledge
• Employees instill confidence in customer
• Employee efficiency
• Employee recommendations
• Questioning to understand needs
Empathy
• Interest in helping
• Individualized/personal attention
• Ease of understanding/use understandable terms
• Understand my needs/recommending products to best fit my needs
• The employees have my best interests at heart
Call to Action
Research without a call to action may be informative, but not very useful. By measuring both customer perceptions and expectations, SERVQUAL gives managers the ability to prioritize investments in the customer experience based not only on their performance, but performance relative to customer expectations.
The first step in taking action on SERVQUAL results is to calculate a Gap Score by simply subtracting the expectation rating from the perception rating for each attribute (Gap Score = Perception – Expectation). This step alone will give you a basis for ranking each attribute based on its gap between customer perceptions and expectations.
Service Quality Score
In addition to ranking service attributes, the Gap Score can be used to calculate both a Service Quality Score based on the relative importance assigned by customers to each of the five service quality dimensions.
The first step in calculating a Service Quality Score is to average the Gap Score of each attribute within each dimension. This will give you the Gap Score for each dimension (GSD). Averaging the dimension Gap Scores will yield an Unweighted Service Quality Score.
From this unweighted score it is a three step process to calculate a Weighted Service Quality Score.
First, determine importance weights by asking customers to allocate a fixed number of points (typically 100) across each of the five dimensions based on how important the dimension is to them. This point allocation will yield a weight for each dimension based on its importance.
The second step is to multiply the Gap Score for each dimension (GSD) by its importance weight. The final step is to simply sum this product across all five dimensions; this will yield a Weighted Service Quality Score.
Click here for a more detailed step by step description of score calculation.
What does all this mean? See the following post for discussion of the implications of SERVQUAL for customer experience managers: The 5 Service Dimensions All Customers Care About.
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:
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.
Kinesis CEM 