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2006 4th Quarter:

Trust-Based Best Practices

Building Relationships with Small Business Customers


While financial institutions have long been committed to measuring customer satisfaction levels of small business accountholders, a key challenge is to define the most effective measure and how that measure impacts profitable revenue or organic growth. According to Gwen Cuffie, vice president of product and program management, Harland Printed Products, “the ‘net promoter’ score measures customer loyalty and provides financial institutions with a measurement tool to track loyalty and trust among their small business accountholders.” This score was introduced several years ago by Fred Reicheld who stated, “loyalty is the key to profitable growth.” In recent years, large companies such as GE and Enterprise Rent-A-Car have integrated this concept as a key performance measure after establishing a statistical correlation between increases in the score and an increase in organic growth or revenue.

In its simplest form, a net promoter score is the difference between the percentage of customers who feel positively about a company and would recommend that company, versus those who feel negatively and will be active detractors. Harland partnered with Warrilow and Company to develop “The Warrilow Trust Index” for banks based on the net promoter score. This use of the net promoter score compares accountholders’ satisfaction and loyalty with their financial institution to how they feel about other industries.

“The Warrilow Trust Index found that, on average, small business owners are about as satisfied with their banks as they are with other service providers such as their accountants or computer hardware providers,” said Cuffie. “They are more satisfied, on the whole, than are customers of telecommunications companies. But they are not nearly as satisfied as are customers of courier companies, such as FedEx, which rank very high in loyalty.”

In order to improve their scores, said Cuffie, financial institutions need to look at six specific “trust levers” that determine how satisfied bank customers or credit union members are with their financial institution. These drivers are: offer products and services that are easy to use, respect accountholder privacy, ensure ethical corporate behavior, be friendly and polite, communicate in easy-tounderstand terms, and provide products and services that positively impact accountholders’ businesses.

Cuffie offered the following trust-based practices to help financial institutions improve their net promoter scores among small business owners:

  1. Make it easy to do business with you: Provide effective communications and quick and easy issue resolution.
  2. Commit early: Establish a segmentation strategy that includes a focus on new businesses; entrepreneurs value companies that are with them from the very start.
  3. Provide control over servicing: Offer fee-based services that allow small business owners to decide what level of banking services they are willing to pay for.
  4. Hire for attitude: Recruit employees who put a priority on great customer service.
  5. Avoid jargon: Financial service acronyms (DDA, R&T, LOC) may be second nature for you, but your accountholders may not know what you are talking about.
  6. Simplify your processes: Make sure your products and services are easy to install and require minimal training to use