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Customer Service Recovery Strategy for Banks

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Hi, I’m John Tschohl.

I’d like to talk about how we can implement a service strategy built around service recovery for your bank. Every day bad things happen. Things go wrong. Customers defect. There’re hundreds of banks. There’re lots of different options of where people can go for their bank. They can use the internet. They can go to a bank in person. Some people prefer not to even use a bank. How do we create this better customer experience? When things go wrong, how do we keep the customer? How do we avoid them going into a Facebook and having a negative rating? How do we get them to become more loyal and more committed? How do we take a guy that is so upset … I was thinking swearing but people wouldn’t really swear I’m sure. How do we take this person and flip them so they believe they’re dealing with the greatest bank in the world?

There’re four steps that I teach in service recovery that we have to master. Number one: act quickly. That means all this has to happen, everything, within 60 seconds. For that to happen, that means the employee at the lowest possible level, because that’s where 99% of your customer contact is, whether they’re on the phone or in person, has to be able to make fast decisions in favor of the customer.
The second thing is we got to take responsibility. That means not lying. That means not blaming another department. All we got to do is say, “Obviously, we screwed up. Our bank made a mistake. our department screwed up. I personally made a mistake.” It is so simple. But usually, like 95% of the time, employees run for cover and many of them lie. Doesn’t work if we’re talking about service recovery.

Our real concept with a lot of employees is how do I get rid of this idiot, get him off my back, and somebody will take care of him another day but he won’t even remember who he talked to. Service recovery, the fourth step is we got to be empowered. That means every single person at your bank has to be able to make fast decisions to spend some of you money to keep a customer. I don’t want it to go up the chain of command. Then the fourth thing is we got to compensate. We got to give things away of value where the guy says, “This is so cool.”

Let’s say that a wire transfer was supposed to be sent on Tuesday and it was not sent. Wednesday the customer calls up and says, “Why wasn’t this wire transfer sent as I requested it on Tuesday?” Now typically the employee lies and runs for cover. All I want the employee to say, “Obviously, we must have screwed up. Oh my gosh. Mr. Tschohl, it was not sent. I’m going to make sure it’s sent right now. We are waving the wire transfer fee because we made a mistake. It’s our fault.” That’s compensation. In a bank, we have things of high value, low cost.

Now in a bank, you got mostly money. “Oh, I’m sorry, sir, that you got charged for that overdraft fee when actually, as I look at the records, it’s our fault. I’m going to put $50 into your account for the inconvenience we caused you.” We have to spend a little bit of money keeping the customer. If you just said, “I’m sorry, sir. I’m going to put $3 into your account,” he’s going to say, “You’re cheap.” It has no value. What are the things of high value, low cost, that you can give away, and you want your employees to do it? It’s all marketing money.

Interesting enough, banks spend a fortune on marketing. What we’re talking now is how do I get all of the employees to make fast decisions to practice service recovery. That’s the strategy, so that when bad things happen, which are going to happen, they can keep your customers, avoid them from defecting, avoid them from giving bad word of mouth, and get them to become even more loyal to your bank.

Thank you.

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