TOP SECRET PROCESS

Banks love to hire mystery shoppers to see how well they are doing when it comes to serving customers. Like spies, these pretend clients wander around branches and call into customer service numbers asking for help and monitoring responses. Recently, a comprehensive study was performed by Booz Allen in an effort to uncover what customers wanted from their bank, how well banks were performing and some best practices banks could be utilizing to increase profits. These mystery shoppers were sent all over the world to banks with clip boards and listening devices in hand. Given the disparity among different areas of the world, we have condensed the findings into those directly related to U.S. banking institutions, as well as critical areas for community banks. To begin, while most banks know that customers want a simplified account opening process shoppers found the process overall remains generally confusing and time consuming. Shoppers found that top performing banks ("TPB") offering pre-populated forms for existing customers (based on information already on file) scored the highest in customer satisfaction. Doing so no only increases satisfaction, but also improves cross-selling and efficiency. Another major area for improvement relates to product segmentation. Shoppers from different segments (i.e. small business vs. consumer) pretending often saw little difference in how they were handled by banking staff. While TPB shifted small business clients (for example) to specialists, staff in other banks simply pushed the latest offering (regardless of whether or not it applied to the specific segment). TPB understand customer segmentation and have focused additional resources on it. As another example, mystery shoppers pretending to be affluent investors found TPB offered dedicated staffing, specific branch areas, premier banking websites and specialized services. TPB doing a good job in attracting this clientele understood that meeting this group's needs requires exclusivity, increased privacy and dedicated staffing. In fact, studies show that affluent customers are 30% more likely to use online channels over visiting a branch, so understanding this and creating specific delivery sub-channels can help boost profitability. In branches, bankers should focus on reducing wait times, providing important customers a single point of contact, focusing on better understanding unique client needs and recommending products that provide the greatest benefits. TPB were found to have more experienced and educated staff focused on the largest accounts. This makes sense when you consider that studies show business customers are 4x more likely to visit a branch if a transaction is deemed to be complicated. The converse is also true, as TPB successfully redirected less complex products through online, ATM or kiosk channels. Finally, geographic targeting is also important. Since roughly 50% of customers still open deposit accounts by visiting a branch (and most of those live or work within a 5 mile radius), TPB had specific marketing programs zeroed in by geography. TPB were found to have more effective programs specifically targeting this tight geographic area with newsletters, marketing collateral and other mailings (and that highlighted distinct delivery channels based on product complexity). As this data shows, mystery shopping remains a powerful tool for banks seeking to gain the customer perspective.