Jeff Judy

Jeff's Thoughts -February 13 , 2013

Loyalty and Trust

I mentioned in my last issue of Jeff's Thoughts the challenge of regaining the trust of our customers and our prospects in the banking industry. I was reacting to a post by another commentator recommending some bold steps to serve customers better, and I suggested that few banks demand the level of accountability for customer satisfaction, for how we treat customers, that is needed to improve public opinion of our industry.

I received comments from some readers that emphasized how important, and how challenging, it will be to rebuild that trust.

But there may also be some readers who are skeptical that trust is an issue. So let me review some background.

I have reported in past years on the results of the global "trust" survey public relations firm Edelman performs annually. And this year I can tell you that our position in the minds of our potential customers remains secure: for the third year in a row, financial services and banks came in as the least trusted industry sectors among consumers.

It is true that in the U.S., about 50% of respondents trusted banks to do the right thing, and that figure actually represents progress. One banking commentator wrote in a blog post that " In 2011, just 25 percent of respondents ages 25-64 indicated a strong degree of trust in banks, but in 2013, that number soared to 50 percent."

Is that like flying a kite and watching it "soar" about ten feet off the ground? The post doesn't explain that the trust rating for banks was 47% in 2012, so most of that "soaring" happened in the previous year.

Now, you could take a cynical view. You could say that, in effect, people have little choice but to deal with financial institutions, so that maybe these measures of trust really don't matter. (Being a frequent traveler, I'm inclined to think that the airlines came to the conclusion that customer satisfaction doesn't matter a long time ago.)

But just imagine that a business customer comes into your bank to request significant credit. In the course of your analysis, you discover that only one out of every two potential customers for that business trusts them to do the right thing. Would that make you eager to extend credit to this borrower?

I think you might come to one of two conclusions:

  1. Either this is an industry that you would be extremely cautious about lending to, or
  2. This particular borrower might be in a great position to stand out against its competition.

After all, if this individual business rises above industry practices to achieve higher customer satisfaction, they could enjoy a significant competitive advantage.

Which brings us to you ...

I'm sure you are confident in your own relationships with customers, but as we explored in my last e-zine, you need more than confidence (read "complacency") to win customers in your market. The banking industry would like to suggest that practices are good, that a few rare incidents and a few "bad apples" blemish our reputation more than they should. Avoid the exceptions among our institutions, they might say.

But your potential customers believe what they believe, which is that the standards of conduct and customer service are quite low in the banking industry. What they are looking for is one of the few "good apples." They are actively seeking the exceptions.

So where do your loyalties lie? Do you stand with the industry, saying, "Like most banks, we care deeply about serving our customers fairly and well, don't pay attention to a few mistakes by a few institutions"? Or do you stand with your customers, saying, "Our industry just isn't good enough at dealing fairly with customers, so let us tell you what we do differently to ensure your satisfaction"?

Remember our imaginary borrower: working in an industry that mostly annoys its customers, wouldn't you urge them to break from the pack with outstanding service -- real service, not lip service -- that would directly impact market share?

That's where you are, at the moment. Perhaps your bank should just look in the mirror and and repeat that advice.