Battle royal – tools for customer retention

4 December 2014

The customer is king in today’s banking sector and brands live or die by the quality of their service delivery. Jim Banks speaks to Santander’s head of UK banking, Steve Pateman, about how to turn customers’ perceptions around, and how all parts of their journey through products and services – including the contact centre – must work together to achieve substantial change in how a brand is regarded.

Customers are increasingly able and willing to switch to a different bank if they feel they are not getting the best service. It is easy for them to vote with their feet and take their business elsewhere. Banks are competing on customer service, and some have proved that it is possible to change how people view a bank and its products. Banks are capable of turning customer experience around and attracting new customer with high-quality services, just as Santander has done.

"Financial services providers face many challenges today, not least of which is the perception among customers that banks are not particularly trustworthy, that their products are not well suited to customer needs and that banks are not interested in what customers want. To a degree, there is an element of truth in each of these things. To add to that you have the issues around technology and how they are fundamentally changing the way that all services - not just financial services - are delivered," says Steve Pateman, head of UK banking at Santander.

"The challenges that supermarkets are facing, with customers not going to do their weekly shopping, are exactly the same challenges that financial services providers are facing. So, you have to shift the model in which you sell products to a customer at a point in time that suits you to find ways to engage with customers at a point in time that suits them. The organisations that have found the right way forward are those that are able to embrace that challenge and find ways to engage with customers in ways that they find helpful, and that are able to provide financial products and services that are useful to them at the right point in their lives," he adds.

Pateman was a driving force behind Santander's successful attempt to turn around what was seen as a flagging performance in service and become a success story in the customer experience arena. Since its takeover of Abbey and Alliance & Leicester in 2010, the bank was regularly criticised in the media for poor customer service. As one of the world's biggest banks, any change in culture or systems architecture is likely to be complex and raise many issues, and at the time of the takeovers, corporate culture and IT were in transition.

Nevertheless, in an industry that is seeing brand loyalty dissipating quickly and is facing stiffer competition from new entrants, it is essential to deliver the best possible customer experience. In a relatively short time, Santander managed to overcome its customer service problems and has since become one of the most popular destinations for customers switching their current accounts. It is climbing the ladder of customer service excellence with its sights set on market leaders such as First Direct, and the results of its customer satisfaction surveys are constantly improving.

Pateman's career has encompassed more than 20 years in corporate and commercial banking, with a brief experience of investment banking in an exciting period during the late 1990s. While it may be an unusual route for someone running a retail bank, it has strongly influenced his view of how to treat customers.

"Because you work with companies, you get to understand what makes a business successful because that is the basis on which you choose to lend them money. So you have to be able to ask them why they choose to do certain things, what makes their business a success and what could go wrong. When you come to retail banking, you approach it in the same way and ask why mortgages are handled a certain way, for example, and what customers think about products and services. It allows you to challenge things that have not been challenged before," Pateman observes.

"I've done retail banking for three years and I understand what is going on in this space. It is an exciting place to be because of the changes in the way that customers see us and the way that we need to interact with them," he adds.

Ring the changes at the contact centre

Any initiative to improve customer experience must address every channel through which customers interact with their bank. For obvious reasons, there has been a lot of focus on digital channels - particularly in the arena of mobile services - but many customers will choose to call the contact centre, so for Pateman this is a crucial part of the customer-experience value chain.

"Pateman was a driving force behind Santander’s successful attempt to turn around what was seen as a flagging performance in service and become a success story in the customer experience arena."

"Contact centres are an interesting challenge in terms of how you manage them. One school of thought is at the extreme end where they are thought of as cost centres and calls should last no more than 30 seconds, which I don't like at all. At the other extreme, there are those who think calls can go on as long as they like. The answer lies somewhere between the two. I want our call centres to be focused on providing answers to customers that meet their needs, not being time constrained in terms of how long
the call can last, but I also want to understand the dynamics of how you run a call centre and how you manage its resources," he explains.

"You have to challenge the conventional wisdom and how things have been done in the past. It seems to me that things have been very binary. You have something that was going to happen like an SVR increase in mortgages and there was a natural assumption that you would need more people to answer the calls, for instance. Today, you can use different technologies to manage that call volume. If something has happened that is very generic to the industry, you can use an IVR or the internet or other ways to communicate with customers. In the next five years, call centres will evolve from being all about telephones and scripts to being about conversations with customers that could be by telephone or via the web," he adds.

There can be no doubt that all points of customer contact from social media to internet and call centres are coming together, but while much has been said about the omnichannel environment and how consistency across all channels is essential, Pateman believes talk is cheap and action is what counts.

"If you give the omnichannel concept to retail bankers to look at you are, to some degree, saying you're going to amend their business model. Would a turkey vote for Christmas? Probably not. So, if you give it to the people who are already running things, there is an inevitability that any progress you make will be gradual and very slim. So, we are now taking a much more radical look at our channels. We're leaving the people who run the different channels to get on with what they are doing while we look at how these channels work together and what the optimum structure is," he explains.

"We are looking at how we merge webchat into telephony, for example, because if you have a different person heading each of those two teams they might not think about how they work together. It is overdue, but we are now thinking about how customers want to have their experience with us rather than thinking about how we want them to have an experience with us. That is much more powerful," he adds.

Back to basics

The key to meaningful change is to think ahead, and consider what contact centres and other elements of service channels will look like in five years' time. Santander understood the importance of responding to customer concerns and letting their feedback inform the bank's long-term multichannel strategy. Excelling in customer service means fully understanding the very basics of what customers want.

"It wasn't that long ago that we were the most complained about bank in the UK. Our customers had plenty of things to say, not many of which were positive. We've worked very hard in the past three or four years to bring the number of complaints down - and they are down, by around 70% from where they were three years ago. Our customer-satisfaction levels have gone up significantly because we did one or two simple things," notes Pateman.

"We simplified our products and we simplified our services. We have fewer products and our process are much more accessible, which means everyone in the business knows how stuff works. Before, we had lots of complicated products and services, and no one knew how anything worked, which was an irritant for our customers. We're also much more empathetic, so instead of telling customers 'that's just the way it is', we now listen to their individual circumstances and think about how to find a solution that works for them. Banking has to become more personalised. Everyone's situation is unique."

From Santander's experience, it is clear that no matter how far behind a bank is when it starts to transform its customer service offering, the right changes in culture and systems can put it within sight of the market leaders.

Exterior of a Santander House, London.