Wednesday, June 17, 2009

Soup De"jour: Customer Service, Word of Mouth, Good Faith Business Practices, and the Irony of BofA

Late last week I started getting automated calls from Bank of America punctuated with the statement, "this is not a marketing call". It turns out that a checking account that I've had with BofA for over a decade and half, one that I had basically let fall inactive, had been eroded by monthly account charges to the point were the account was "overdrawn". BofA was now calling to tell me that my inactive account was overdrawn (and they wanted money).

Now I'm sure that you've heard these kinds of stories before, the story where the bank insists that for you to close your account and to make them stop charging you, you need to pay them the negative balance on the account. My Friday was spent arguing with the BofA customer service team on the phone, back and forth over this exact issue. However, rather than going into the specifics of this issue, I'd rather focus on some root causes of this issue, what they say about a company's approach to business, and what that means for branding efforts.

Root Cause
We've all heard the stories of people whose bank accounts were charged to zero and they were asked to pay in order to close the account. So, one question that you might ask if you were a customer of Bank of America and you were receiving a call like I did was:

What triggered Bank of America to call?
Simple Answer: they have software that monitors your account. When your account balance drops below zero and you "owe" them, a process is triggered that alerts their organization to contact you. In my case, I made at least two deposits of a couple hundred dollars on prior occasions, but my last actual withdrawal transaction from that account was probably over a year ago -- so my only activity in the account for a year or more was BofA charging my account and taking my money.
As a customer, wouldn't it be better to have a more sophisticated trigger, one that looks at account activity as well as balance, and if no account activity has taken place, a notification trigger is initiated?
While this type of process might win praise from some customers for it's "customer first" approach, it won't make the company any extra money. Consider this as an example: Grandma has a bank account that her relatives don't know about. Grandma passes away. Under the current model, BofA will continue to collect -- in the form of fees -- whatever money sits in Grandma's account and they won't contact anyone until the account is in arrears. Then, once the account is depleted -- and they have collected all of the money that was there, they will move forward, trying to squeeze the additional closing costs from the account.

Imagine if they created a pre-emptive account notification, one that looks at activity and reaches out to customers if no activity has been taking place. While they might "lose" the potential revenue of the money that's sitting in the account (money that isn't really even their's), they would probably gain loyalty and reputation for their more customer-centric behavior. But part of the problem is that it's easier (and more profitable) to let you walk away from the table without your chips, then take them away slowly, through fees.

Since you've heard these "you need to pay to close out your account" stories before, you might guess that this situation isn't uncommon. It's happened before. If you knew about a problem and could fix it simply with a software trigger and some customer engagement, are you customer focused if you don't implement it?
What happens when your spoken message conflicts with your behavioral message?
Bank of America is one of those companies that attempts to push a customer service focus all the way down through to their lowest-paid, customer-facing employees. I've participated in several BofA surveys where they asked a bunch of questions about how my local branch handled service. And whenever you interact with their frontline people, whether your speaking with a teller or talking to customer service, they'll ask whether they've "answered all of your questions today." Bank of America wants you to see them as a customer-focused organization. The sad part of this is that you feel for the front-line, customer-facing service people -- they're being pushed to promote a level of customer-service that the company doesn't actually support. What that means is that, the customer-service team is forced to push a message that they know the customer doesn't believe so they can't believe it, and it all turns into a great customer service Kabuki dance.

The Importance of Good Faith in Business Transactions Good faith is a critical component in any business transaction and a foundation for building long term relationships. Consider a warranty -- a warranty is basically a contractual commitment that says,
"I know that this product that I'm offering is complex and will require you to spend a bunch of your money -- to ease your concerns and to help you focus on the value that this product offers you, I'm going to offer you a warranty. If the product fails because of some issue like, my manufacturing was sloppy, I'll fix it for you, no charge. Mind you, if you break it, I can't afford to just give you another, but if it breaks because I didn't do my job correctly, I'll fix it."
Compare that to the BofA approach where, after my account had eroded once (and I still thought that I might get some benefit from having the account, so I deposited some more money), they eroded my account again. I should note that, this erosion didn't take place over a short period, but rather, over the course of months. While, as a business, it's perfectly acceptable to charge fees for your services, it's a bit disingenuous to promote a customer-focused message so long as you can pick meat from the bones of your customer.
If we can just get the customer locked in, then we can really show them how great we are...
BofA isn't the only large company to suck when it comes to these philosophical aspects of customer service. Lots of companies break out the bait-and-switch approach in order to get you to commit to long term contracts and entrenched services. Cancellation fees and early contract termination charges aren't just designed to recoup some costs, they're designed to create barriers to switching services. You'll note my previous post about AT&T's wireless service and my frustration with the deterioration in the quality of service that I've received from them -- when I first made the switch to AT&T, they offered a "no-commitment" contract that allowed me to switch whenever I wanted with no penalty -- and, while it may have just been psychological, I actually felt better about my choice of AT&T for wireless service back then.

I'm sure that you've come across the same kind of approach -- it's widespread and the "product" runs the gamut -- from online services to those infomercial products where, when they get your credit card, they are committing you to a subscription until you cancel. And they don't make canceling easy. AOL used "difficult to contact customer service, difficult to cancel" as a key ingredient in their brand-gutting recipe. Regardless of how big you are or how much brand loyalty you've built, these practices reek with the stench of scam.

Contracts, lock-ins, market leadership, and limited customer options are all potential breeding grounds for serious customer discontent. And while, as a customer service strategy, you can force your front-line staff to push a "customer friendly" approach like a deodorant, unless your prepared -- as a business -- to WOW the customer on a regular basis, you're probably building an infrastructure that's going to foment anger and frustration with a segment of your customer base.

So What Is Your Customer Service Mission Statement?
My favorite quote from the front-line customer service person that I spoke with was, "if you want to continue to utilize your account, you'll need to pay the outstanding amount."

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