How to Prevent Your Bank Client from Switching to a Competitor

You can keep your customers loyal by owning up to and fixing a mistake.

Surveys show almost 80 percent of customers say they’d switch banks after several bad service experiences. That’s a scary statistic for financial institutions.

In fact, bad customer service is the top reason customers leave a bank, according to the Bank Administration Institute (BAI). “From the first positive interaction to day-to-day operations at the branch or online, existing and potential clients rank this as the top reason to churn,” the BAI states.

Here’s how you can “save” a client after a bad experience to keep them with your bank:

1. Own up to your mistake. Take responsibility, customer service expert John Tschohl recommends. “That means not lying. That means not blaming another department. All we’ve 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,” he states.” But usually, like 95 percent of the time, employees run for cover and many of them lie. Doesn’t work if we’re talking about service recovery.”
2. Move quickly. “That means all this has to happen, everything, within 60 seconds,” Tschohl states. “For that to happen, that means the employee at the lowest possible level, because that’s where 99 percent 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.”
3. Ask for feedback. Customers want to feel listened to, and asking for feedback allows them to get any remaining issues off their chest. Soliciting feedback also is a good way to find out about any lingering issues that you may need to address to retain the customer. “There are any number of ways to solicit customer feedback, but the most practical approach is to establish check-ins across all touchpoints,” Hitachi Solutions, a company that provides IT solutions for the banking industry, states. “For example, if a customer were to contact your bank’s call center with a service request, the representative responsible for processing that request might close out the call by asking whether the customer had any additional questions and whether they were satisfied with the service they received.”
4. Respond to negative online reviews. Just like other businesses, banks should make an effort to monitor their reviews and respond to those from unhappy customers. Responding to reviews shows that you care, and helps to personalize the banking experience. Customers who leave bad reviews may close to losing patience and switching banks, but the right response may be able to salvage the relationship. To respond, apologize sincerely, take ownership of the issue, thank the customer for their business and tell them how they can contact you directly to resolve the problem. “As part of your bank customer retention strategy, have a system in place for tuning into banking review sites and engaging with customers who leave unsolicited feedback,” ReviewTracker recommends. “Learning how to respond to negative reviews as well as positive feedback [also] demonstrates to existing customers (outside of the actual reviewer) that you care and are listening to what they have to say.”
5. Become indispensable. “One of the best ways to thwart any intention to move elsewhere is to continue to introduce innovative and easy-to-use services that fit into customers’ lives,” The Financial Brand states. “Person-to-person payment capability is one example.The easy integration of services into customers’ daily lives raises the barrier for switching to a competitor.”

There’s no doubt that customers who experience issues at a bank may be tempted to switch. But you may be able to retain those customers by quickly changing course, putting in effort to make up for the problem and doing your best to become an integral part of their lives. This will make it harder for them to jump to a competitor.