What We Got Here Is Failure to Communicate

Cool Hand Luke coined one of the most memorable lines in movie history. It’s also fair to say that it reflects one of the sources of problems associated with customer problems and dissatisfaction. In all three of J.D. Power’s Syndicated Banking Studies this year, there was a remarkable level of consistency among customers who completely Understand their fees, service charges, and/or account terms. This means roughly two out of three customers do not have a solid comprehension of the rules of the game for which they are held accountable. In many ways, “what we have got here is failure to communicate.”

J.D. Power’s research across these three studies demonstrate the importance associated with high levels of customer comprehension around fees and terms, and why it’s in the institution’s best interest to do everything possible to educate customers.

Customers who lack complete understanding of fees are:

  • Overall less satisfied
  • More likely to have problems or complaints
  • Have higher attrition or likely to switch primary providers

Educating customers about their terms and agreements must begin with account initiation. Frontline employees (branch and call center alike), however, often avoid this conversation because it’s not positive and uplifting. Customers opening new accounts often just hear about the wonderful benefits and services associated with their new accounts. After all, who would want to spoil the mood of bringing a new customer on board with talk about fees and other negative stuff?

That’s the problem. In presentations, I liken this to the well-intentioned parent who avoids having the ‘facts of life’ discussion with an adolescent child because it’s an uncomfortable and often emotional conversation. However, many (grand)parents can attest to the unfortunate consequences of not educating children early on about these facts. The same can be said about our customers. Eventually they will learn the facts about their accounts on their own…and the results are often unpleasant.

So banks and credit card issuers need to make sure they make customer education and proactive communication around fees and account terms a high priority. As for the discomfort of talking about these things….GET OVER IT!!

Frontline employees however, need to have the right resources and training to communicate effectively with customers. These include:

Simple collateral: Customers can still get the 30 or 40 page disclosure, but if they also get a 1 or 2 page summary sheet describing exactly what fees, requirements, balances, charges, etc. are associated with their accounts, it’s much more likely they will grasp at least the most important elements.

Proactive communication and listening: Representatives should not assume that customers grasp what has been described during account initiation. There are so many disclosures, policies and procedures associated with the process that their heads are likely spinning by the end of the session. Therefore, the banker needs to ask, and ask again about the customer’s understanding of key fees. Repetition is a good thing.

Follow-up in 2-3 days: Highest satisfaction occurs when the agent who opened the account calls the customer back in 2-3 days to both thank them for their business and to ask if there are additional questions. It would also be a good time to check to see if they read the disclosure (or at least the summary sheet) and to remind them of any key minimum balance or transaction requirements, etc.

If frontline employees can be trained to overcome their aversion to discussing fees and charges with customers, then a major hurdle will be overcome and it will be less likely that we will continue to have “failure to communicate!”

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