Attitude Adjustment

By Bill Stoneman

Banks are elevating training programs to improve customer service, but other supportive measures are also required.

Service begins in the branch for most financial institutions, since that's generally where customers open accounts, conduct important transactions and turn for help when something goes wrong. It's also where customers are likely to form their opinion of the provider. Poor service quality in the branch will quickly translate into negative feelings about the institution overall.

In an era when retail profitability depends on expanding established customer relationships, bank managers across the country are recognizing they face a service shortfall. Increasingly, their remedies hinge on improved training for those frontline staff who provide the institution's public face.

Institutions such as Cleveland-based National City Corp. and FleetBoston Financial Corp., for example, have announced major campaigns to improve service and employee retention, partly by revamping and expanding training for branch platform and teller workers. Much of the change involves re-orienting the courses from procedures to service. "We want to motivate front-line staff to really deliver for the customer," says Monica Herlihy, senior vice president and director of consumer bank training and communications for FleetBoston.

Such efforts should help. In contrast to traditional bank training programs, which emphasized the mastery of operational procedures, the newer programs teach employees to be responsive to customers and handle their problems quickly. As part of this reorientation to person-to-person interaction, trainees spend less time listening to instructors lecture and more at role-playing under the watchful eye of trainers.

It must be recognized, however, that a one-time course is no panacea for the service problems that afflict many banks. The beneficial effects of improved training will quickly dissipate unless the work environment supports the lessons employees have learned. Such supportive measures include: follow-up classes; on-the-job coaching by supervisors; better advancement opportunities; back-office systems that are responsive to front-line needs; and regular public affirmation from senior managers that taking care of customers is a top priority.

This last item may be the most important of all. Managers at all levels must understand the powerful messages they send, sometimes inadvertently, regarding the company's true priorities. Progress in convincing employees that customers come first could be tossed right out the window by a branch manager who lets too many people take lunch breaks during peak hours at a busy branch.

"What really makes or breaks an institution is the front-line management," says Timothy C. Larson, vice president for corporate training development at Webster Financial Corp. in Waterbury, Conn. "Training programs just provide the concepts."

Expectations Gap

Given that banking is a largely commoditized industry, particularly at the retail level, institutions have turned to service and convenience to differentiate themselves from one another. For those that have taken up the banner of service, improving the quality of customer interactions at the branch and call center is critical. "It's what will drive customers to us or away from us," says Vincent F. Pellitteri, senior vice president for operating effectiveness with J.P. Morgan Chase & Co.

Although no universal definition of good service exists, numerous surveys have highlighted a gap in expectations between the service customers desire from financial institutions and what they actually receive. By and large, this expectations gap has to do with the quality of personal interactions, such as representatives' helpfulness and ability to solve problems, rather than operational weaknesses, such as account errors.

"Customers tend to get more ticked off with an employee who just doesn't have the people skills," says Deborah Jacovelli, dean of Commerce University, the in-house training organization at Commerce Bancorp Inc. in Cherry Hill, N.J.

The problem partly relates to the intrinsic high level of turnover in entry-level positions. Eighty-eight percent of the banks that participated in a recent BAI teller benchmarking study reported having at least moderate problems retaining tellers, for example, yet only 29% had formal teller-retention initiatives. Training should be part of those initiatives. When tellers in the BAI study were asked what measures the bank could take to induce them to stay in their jobs, "more training opportunities" came in fourth, after tuition reimbursement, career advancement opportunities, and financial incentives.

High turnover leaves customers dealing with employees who are less prepared to respond to their problems. "Even a couple of months' experience makes a huge difference with customers," says Marylu Giver, vice president and retail talent development manager at National City. To address its turnover problem, National City has been boosting pay in some markets and publicizing advancement opportunities to staff and spelling out what they would have to do to grab them.

To quell turnover before it starts, banks are redefining the qualifications for entry-level positions, which helps them hire people who are likelier to hang around and also do a better job at customer service. Where New York-based Morgan Chase once based teller hiring decisions on whether applicants "had cashiering experience," the new emphasis is on people who seem to enjoy working with customers, Pellitteri says.

The next step is to transcend the prior emphasis on operational issues. "We used to spend seven or eight days with someone in a new-hire class crunching through all the rules, policies and procedures of transaction processing," Giver says. "Then, at the end we would say, 'Oh, by the way, let's talk about customer service.' "

Today's programs supplement the instruction in hard skills, such as computer usage, with extended discussions about the minutia of courteous behavior, such as greeting customers by their names and making eye contact. Platform officers are instructed to get up from behind their desks when inviting customers to sit down to talk. If children accompany those customers, it's a good idea to have some crayons and paper available to keep the youngsters occupied, says Commerce's Jacovelli.

Typifying the new service orientation, National City has moved customer care issues from the end of its training program to the beginning, starting with a talk by a senior executive about the contribution that front-line staff makes to the customer experience. Then, rather than just lecture new hires about the importance of treating customers well, trainers ask them to describe their own experiences as a customer and to draw lessons from those experiences. Only after more than two days of company orientation, mostly relating to customer service, do trainees move on to the nuts-and-bolts of executing transactions.

An important extension of the initial training at Morgan Chase is an in-branch orientation, in which experienced hands introduce new hires to all of the facility's resources, including in-house experts and lists of phone numbers. No one is expected to be able to answer every question a customer might ask, Pellitteri says, but even the newest staff members should be courteous and efficient in seeking out answers.

With the increased attention to person-to-person interactions, trainees are generally spending less time at desks listening to instructors lecture and more time in role-playing exercises. At Fleet/Boston, instructors watch trainees act out roles in scenarios created to simulate situations they'll encounter on the job. Platform officer trainees are videotaped five times during a 15-day training program, so they can see for themselves how their sales and service behavior compares with the standard sought by instructors.

Beyond Training

As important as training courses are, classroom instruction by itself will not lead to a sustained improvement in service quality. Bankers and outside experts agree that a series of supportive measures is needed in the work environment to maintain the cultural values the institution is trying to inculcate.

Refresher courses seem to help, for example. Bank training programs typically last from one to three weeks. Many institutions now bring employees back to the classroom to reinforce messages that may have begun to fade in the process of dealing with day-to-day operational issues. "We find that after reps have been in service for about six months, they get that us-against-them attitude," says D.J. Johnson, manager of corporate training and development at First Tennessee National Corp.

To adjust that attitude, First Tennessee therefore brings tellers back after about three months on the job, and again after about six months. The second refresher course delves into communication styles and how they can shape interactions with particular customers, both positively and negatively.

The company first administers a test designed to determine which of four styles of communication an employee uses. The instructors then discuss how each style can enhance an exchange with one customer, yet make things more difficult with another. Some customers, for example, might perceive an employee who is especially direct as forthright and efficient. Other customers, however, might view that same employee as rude. In those latter cases, the employees will need to temper their style, perhaps by phrasing a need as a question rather than as a statement, says Lisa Pruitt, an instructional designer with the Memphis-based bank.

Earlier this year, FleetBoston's training managers launched an ambitious program to reinforce the concepts that underlie quality customer service. As part of a series of steps to elevate the importance of its retail business, the company brought together all 25,000 people employed by its retail bank, 10 at a time, for two two-hour sessions to discuss strategic issues facing the company.

Though not training in the traditional sense, this program reflects the increasingly widespread view that attitude, appreciation of competitive pressures, understanding just how profits are derived and ultimately a consistent definition of a company's mission, do as much to drive good customer service as classes on recording deposits or lectures on being friendly to customers. These discussions are particularly important for FleetBoston, says Herlihy, because so many of its employees come from acquired institutions.

On-the-job coaching provides another way to drive home the lessons learned in training. First-line managers with U.S. Bancorp, for example, are instructed to watch each of their direct reports in action on a regular basis, and then talk with them immediately afterward about what they did right and what they did wrong. Managers will sit right behind or even stand right next to new tellers, observing several transactions a day. Sometimes, they'll ask customers for permission to sit at a platform officer's desk; other times, they keep an ear cocked from a couple of desks away.

"The absolute best way to find out how our folks are doing is to observe them with customers," says Tina L. Foster, a U.S. Bancorp regional manager in Portland, Ore.

Constant Watching

Despite its importance, coaching may not be used as often as it should. "There's not much coaching going on in the industry today," asserts training consultant M. Marshall Weems, president of Financial Selling Systems Inc. in Brentwood, Tenn. Weems says branch managers need to practice "management by walking around" far more than they actually do. Their objective, he says, should be to "catch people doing something right and say, 'atta boy,' and catch people doing something wrong and give them positive direction."

Though many banks pay lip service to such coaching techniques, today's branch managers typically have too much else on their plates to spend a lot of time tutoring new hires, according to Weems. For example, these managers now make more sales calls than before, yet still retain their long-standing responsibilities for facilities, scheduling staff, compliance and serving as a person of last resort when customers or employees have problems. Many are also expected to have some expertise in insurance, investments or financial planning.

Recognizing that problem, Morgan Chase has trimmed the workload of the people who supervise tellers. Last year, assistant branch managers were given a new title, "client experience manager," and assigned primary responsibility for the service provided by tellers. At the same time, the bank shifted the sales and relationship management responsibilities of these managers to other people in the branches. "We decided there is no super person on this earth who can do all of those things well in a branch environment," Pellitteri says.

Ultimately, service-improvement programs will fail unless the new attitudes are strongly reinforced by senior managers. Commitment from senior management is required to ensure that back-office departments are organized to support the front line, for example, by providing information in a timely manner. And only management can provide sufficient staffing to prevent long lines from forming in the branches. That means that senior executives must visit branches often enough to know first-hand what kind of experience customers are having.

Staff members will understandably perform their best if they know the top bosses are watching. Therefore, that watching should be constant. "People can put on a good face for a short period of time," says National City's Giver, "but if the supervising observer is there often enough and long enough, true behaviors will be demonstrated."

Mr. Stoneman is a freelance writer based in Albany, N.Y.

Copyright © 2003 by Banking Strategies, published by BAI.

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