As the banking industry changes and adjusts to the new technology of the information era, many are wondering what they can do to improve their customer retention. Building customer loyalty is often the key to success in an increasingly competitive banking industry.
Yet, just how can one go about building that customer loyalty? The answer is not in more programs or services. Interestingly, the answer may be in building up employees to improve employee retention.
Historically, banks that have high employee retention have high customer satisfaction. While no formal studies have been done as to why this is true, a bit of logical thinking will show why. When your employees are happy in their work and stick around for decades, that happiness and satisfaction is spread to the customer. The end result is better customer satisfaction, which often translates into better overall profits for the bank.
Customer Facing Employees Essential to Customer Retention
When customer walks into your bank branch, it’s not your products or your investment opportunities that keep that customer with your bank. Chances are high that your competition has something similar to offer. For most people it is the customer facing employees that keep them coming back.
When the teller or personal banker knows the customer’s names and is able to offer products and services that meet customer needs, the customer, in turn, is satisfied with the service and desires to continue doing business with your bank.
When, on the other hand, that customer facing employee changes frequently due to employee turnover, the customer experience begins to suffer. A relationship is impossible to build when the service provider is constantly changing, and the customer’s loyalty is no longer stimulated. Should your competitor offer a better service, the customer will be more likely to make a switch.
Because of this direct connection between customer loyalty and satisfaction and retention of employees, it makes sense for banks to work on building a culture that encourages employees to remain employed by the bank. Overall, this improves the bottom line for the bank and the image the bank has in the local community.
Strategies to Improve Employee Retention
No matter how well structured your banking organization is, you will have some employee turnover. It’s simply the nature of the industry. That said, banks can take specific measures to improve their employee retention and, in turn, improve their customer satisfaction.
First, create a company culture of mutual respect. When employees feel respected by their employer and their coworkers, they are happier to come to work and are able to serve customers better. When their thoughts turn to moving elsewhere, that positive company culture can go a long way.
Next, hire from within. When you have a position and an employee who clearly fits the bill, you will boost company morale and encourage other employees to stick with their positions by hiring from within. While you may have times that you need an outside influence, in many instances your employees will be the best hires for an opening you have. This encourages employees to continue working because they have the hope of being promoted, knowing that your company culture emphasizes hiring from within.
Finally, make your branch managers the decision makers for the branch. This gives your local employees some ownership in what happens in their banks. While you will still need to make some decisions on a corporate level, whenever possible allow the bank managers to make decisions for their branches. Lending authority, for example, can be handed to branch managers. This will improve customer service by giving customers instance access to the information they need, and it will improve employee retention by giving those in the trenches the ability to make decisions as they need to.
By changing your bank’s focus to one that emphasizes customer and employee satisfaction, you will be poised for success.