Managing the Conversation with Unhappy Customers

Are you setting up your sales and service people for failure by sending them unarmed into hostile territory? Are you leaving them to their own devices in dealing with unhappy customers?

According to a recent study by Gfk Research Institute, “Trust in bankers hit a low of 37 percent in 2009, when the global economy shrank and banks and other companies sought government bailouts.” The effects of that debacle linger. Many of your once-solid customers were horrified to find themselves delinquent for the first time. Other customers who keep huge balances with you are earning miniscule rates. You are probably imposing new charges on once-free services. And it certainly doesn’t help that the president terms you “fat-cat bankers.”

So what happens when you send your sales and service employees into this hostile environment?

They avoid the customer conversation. They want to serve – that’s why they became frontline bankers. But if they don’t know how to handle an unpleasant encounter, they will avoid encounters. Instead of seeking out customers they way they did pre-crisis, they engage only when they have to and then gingerly. So much for customer-centricity, for the opportunity to use all the customer conversation skills you taught them pre-2007 and for making use of the marvelous information technology you gave them.

“It is just too awkward,” said one branch manager. “You never know if customers are going to complain or attack you for the bank’s new policies, so you just wait and let them come to you.”

They become defensive. When customers object, fearful people get defensive. Here is how a bank manager explained new fees to one of our associates, a long-time customer, after the teller ducked the question:

Manager: “There’s a new law that we can’t charge customers as much for overdrafts.”

Customer: “But I never overdraw. I’ve never even gone below the minimum balance.”

Manager, walking away: “Well, lots of other people do, and we can’t just give away our services.”

Of course such an answer is not the norm but variants of this response are frequent and serve as reminders that it is essential to prepare your bankers with the best possible responses to contentious challenges.

They ignore needs. What is the likelihood that any given customer’s needs are the same as they were before the crisis? Are yours? Mine neither. Comfortably middle-class people who planned to fund their child’s education with low-rate home equity loans no longer have the home equity. Credit card customers who cut up their cards could probably use a consumer loan. Business owners who once used a line of credit are remortgaging the house to meet payroll.

Such shifting needs are not rare – they are now the rule. But if your relationship managers can’t straightforwardly discuss the bank’s new fees, policies, and lending standards, how can they have the conversation that will reveal these new needs?

They collude with the customer against … guess whom? Never underestimate the customer service effects of unhappy employees. If they perceive you are not looking out for them while they take grief from customers or if you ask them to do things they can’t explain (increase fees, deny loans, cut credit lines, etc.), they will make common cause with the unhappy customer and you will become “they” in their customer conversations.

For your employees to hold good customer conversations today they need some help. First, an explicit strategy, designed for the times, articulated at the top, and echoed all the way out to the frontline will help align the entire organization around the challenge at hand. It is essential that marketing campaigns don’t conflict with high-priority branch efforts. The whole organization needs to be aware of any customer unrest or unhappiness. IT needs to pull up the right lists of customers who were delinquent but now back on their financial footing. Product management needs to make sure their bundling and pricing are in line with the today’s needs.

Second, employees need to anticipate and welcome customer objections. Right now, they fear hearing some version of: My taxes paid for your bailout. Your fees keep going up. You don’t pay enough for my deposits.

But there are good answers to every question or challenge a customer has. You probably know them. Your employees need to know them, too, and they need the confidence that comes from knowing that today’s objections can be handled gracefully. They also need to know the main thing about objections, which is that there are really only four kinds: No need. No time, No trust, No understanding. Suddenly, the task of learning how to handle these objections shifts from being intimidating to exciting for employees. Who can’t learn four things when it will make their job significantly easier and increase their confidence?

Also, your people don’t need to be economists to conduct a thoughtful conversation about regulatory and fee changes with customers who invite one. They don’t need to be Reg E lawyers to discuss overdrafts responsibly. They don’t need to be psychologists to hold empathetic conversations with grumpy customers.

What they do need are proven, best-practice scripts and deliberate, focused practice and rehearsal. What words would have enlightened and mollified the customer who asked about new fees? What words can transition a customer from, “I shouldn’t have to pay that fee,” to, “My company has cash management needs?” Good scripts banish fear. They shift the interaction to one of service.

Third, employees must look proactively for new needs, which require new insights. Above we mentioned credit card customers who cut up their cards. They probably need help saving, or another way of accessing credit without all the temptations of a credit card.

What about the small business owner who remortgaged the house when he couldn’t get his credit line renewed? What small business payroll services might help that owner retain the loyalty of his employees who probably aren’t getting raises? And those once-comfortable customers who planned to fund their child’s college with a home equity loan but no longer have the equity – will they pull their CDs to find funds?

Uncovering customer needs takes new skills. Employees need to know how to acknowledge the customer’s negative emotion, express empathy with a painful situation and do so with confidence and professionalism. If they don’t know how to do these things, fear will hold them back and customer needs will go undiscovered. Customers will get their needs met – just somewhere else.

Fourth, employees need managers skilled in observation and skills-based coaching. Is it any wonder that the teller in the anecdote above was too fearful to answer the customer’s question about new fees, never having been skilled and drilled in the best answer? Evidently, the manager had never embraced her responsibilities of making sure the teller anticipated the question (new fees were rampant at the time), explaining why customers would ask, explaining the rationale for the fees, giving the tellers words for the customer and showing the right attitude.

It’s likely that everybody at the branch “got the memo” about overdraft changes. Maybe they even got some messaging and instructions. But when was the last time a memo changed behavior? When did messaging get people to do something they don’t want to do or don’t know how to do? If your managers are not constantly observing how employees put their training into action and consistently coaching on how they can improve, do not expect fear to diminish or performance to improve.

Finally, employees need to be assured that all levels in the company are accountable for the client experience. A colleague asked a relative who sold shoes at Nordstrom’s if the company’s famous return policy – we take anything back; no receipt, no problem – didn’t put a dent in her incentive pay. The salesperson shrugged and said, “I really don’t know. I just take the return. It doesn’t worry me. I’m supposed to take care of the customer. Everybody else just takes care of me.”

Would your frontline people say that? Who in your bank is responsible for the customer experience? If your bank is like most, everyone expects the lowest level employees to deliver the highest quality customer experience that the rest of the bank conceives. Imagine reversing that. What if, the next time there were major regulatory changes roiling the industry, your bank threw all its resources at the problem with one goal: How do we help the front line do this right with the customers?

The financial crisis changed the way people regard banking and damaged the confidence of banking’s sales and service employees. If you have not explicitly enabled your frontline in the non-intuitive discipline of holding fruitful conversations with disgruntled customers, you could be risking customers, profits, and employees.

Mr. Brown is president, co-chairman, and co-founder of Los Angeles-based Cohen Brown Management Group Inc. He can be reached at [email protected].