The Shopper Stopper.

Banks are inundated daily by people telephoning for information about services and products. Surprisingly,] few banks bother to develop a comprehensive program for converting these 'shopper' contacts into actual sates.

Here's a simple, effective way to get started.

Every day, telephone calls from so-called "shoppers" pour into the bank's switchboard or call center. Here are typical examples:

"What's your current rate on a one-year CD?"

"What kind of checking accounts do you offer?"

"What's the going interest rate on a home-equity loan?"

Concerning this deluge of enquiries, banks need to ask themselves: How many of these shopper calls are translated into money-making business?

When consumers perceive a business's goods and services as commodities (in other words: "I can get this anywhere"), they often dig out their mangled Yellow Pages and start dialing down the list of businesses "looking for a deal." Examples of such commodities might include tires, motel rooms, rental cars, eyeglasses--or most retail banking services.

"Callers see our products as commodities because we treat them that way," said Charlotte House, vice president of marketing at the $200 million Cherokee State Bank in St. Paul, Minn, "Proctor and Gamble spends what--tens of millions?--creating distinctions between everyday brands of laundry soap. We haven't done much to distinguish our retail products from any other guy's. What we do try to do is make the distinction in how we deliver them."

Echoing that sentiment, Richard Whittenburg, vice president of marketing at the $400 million City Bank in Lubbock, Texas, adds: "With products essentially the same, the competitive distinctions come from constant upgrades, enhancements and service quality."

"Yes, they are almost all alike," says Karen Everhart, vice president of retail marketing at the $550 million Castle Bank based in DeKalb, Ill. "We're in a stable community. To contrast with competitors, we constantly emphasize local people and local decisions with customized service tailored to unique individuals."

Whether shopper assessments are correct or not, savvy and jaded callers do often break out a scratch pad, pound their phone, "dial for dollars" and then play twenty questions with new accounts staffers. Aggressively focused on price and terms, they often knock around helpful customer service folks like a kitten with catnip. As Dr. Stephen Duncan of the Brigham Young University business faculty quips, "Capturing 'shopper' calls is like trying to take a drink from a fire hydrant."

How can you plant an effective stop sign in the Yellow Pages? How best to make the shopper's next call to your bank about CD rates or car loan terms or cash cards or e-payments their last? Capturing more business from telephone shoppers is a quick way to improve the bottom line without the need for wrenching changes in a bank's culture.

Most banks lack a program

It isn't hard. All you have to do is add a few simple sales strategies to a standard shopper-call response.

First, for an eye-opener, do some informal market research. Have an associate (or yourself) call four banks in your market and tell the banker answering that you are interested in opening a checking account and want to know what's available. Don't say another word.

This is what will happen during three of the four calls: a customer-service representative or new-accounts person will immediately start telling everything (that's no exaggeration--everything) about every checking account option and every feature they offer--service charges, number of items before charges, item charges after the minimum, interest-bearing options, senior-citizen specials, whether cancelled checks are returned, check charges, overdraft line specifics, minimum balances and cash card fees. Often there is more!

Whew. Somewhere in the middle of that answer most folks' eyes will start to glaze over. Concluding this indiscriminate answer, sometimes referred to as a "data dump," a caller "thank you" will be echoed by the banker. As the last words spoken, another "shopper call" has resulted in--what? Probably nothing.

Andy O'Neill, president of the Valley Bank of Helena, Mont., a $90 million member of the $2 billion Glacier Group commented, "The first time I monitored our calls, I wondered how we had ever successfully opened a single new account. We were succeeding in spite of ourselves. I get heartburn thinking about how much business we hung up on with a smile and a thank-you."

Why does it happen this way? Two possibilities: (1) management focus is deflected or left unenlightened by conventional accounting tools, or (2) management strength is reflective of lending careers rather than strong backgrounds in retail selling.

Accounting systems neither measure nor value staff experience--a blind spot filled only by management intuition or crude measures such as turnover and uncapitalized training costs. Conventional accounting may actually create perverse incentives for bad service.

For example, a "cutting-expenses" focus rewards replacing a skilled, $12-an-hour customer service representative who helps retain customers by effective problem solving with an untrained, minimum-wage rookie who may, by ignorance or inexperience, inadvertently drive them away.

Likewise, managers get no useful accounting data regarding the enormous opportunity costs of poor service. Accounts payable never needs senior management to OK an invoice for "business lost because of poor phone work."

In his book "The Loyalty Effect," noted author and consultant Frederick F. Reichheld notes that "most banks simply ignore the economics of customer and employee retention, even though they overwhelm the (traditional) economics of conventionally measured productivity."

The right kind of hiring

Senior bank managers often advance in responsibility through revenue-sensitive lending careers. Such resumes color what is valued and supported in fellow staffers. Holding an influential position in the hiring process, lending managers thoughtfully distill and massage a mountain of work applicants into a select group of eager new hires who are kind, ingratiating and friendly. Just the kind of helpful folks that answer an open-ended new-accounts question like the way such a question was answered above.

A hiring perspective more focused on skill sets for retail sales would serve to reorient customer interaction to outcomes measured by "assets captured" rather than "friendly presentations of information."

At the community bank level, lending is a sophisticated judgment process while retail banking is mostly a selling process. Each discipline demands a different perspective, a different work emphasis and different incentives. Recognizing these potential conflicts, Cherokee State Bank's House observes, "We're now creating blended, joint sales teams drawing from both the consumer and business sides of the bank."

Everhart's Castle Bank is taking a similar approach. "We're moving toward seamless delivery of services in relationship management with nonloan people taking applications and full-service personal bankers answering phones--no call transfers, no fumbles."

Often the "answer" to the shopper's question is dumped on the caller without the banker knowing anything about the caller's needs. Wouldn't it have been useful to know a name, and--if the caller is a current customer--what kinds of accounts he has, what he likes or doesn't like about them and specifically what's important to him? Wouldn't 30 seconds of information gathering eliminate three minutes from a meandering four- minute answer by focusing on what the customer wants? Did the banker ask the caller anything? Likely not. Was the caller invited in? Was any reason given that might distinguish the bank called from any other? Was the caller given any motivation not to call the next bank listed? Probably not.

Here are some suggestions for better ways to respond to shopper calls. These approaches can attract new business to your bank.

1. Ask permission to question the caller about their circumstances and needs. Two results: the caller will hear solutions to their needs from someone who took control of the conversation and cared enough to try to understand their needs. That's high-value service that is customized, "on target," thoughtfully personal and very professional.

In their new business best seller, "First, Break All the Rules," authors Marcus Buckingham and Curt Coffman of the Gallup Organization cite customers having a sense of partnership as one of the four key elements in turning casual customers into passionate advocates of your bank. "They want you to listen to them, to be responsive to them, to make them feel like they are on the same side of the fence as you." How better to do that than by asking relevant, helpful questions?

2. Give each caller a brief, carefully crafted "buy here" statement.

Valley Bank's Operations Manager Roslyn Duncan suggests, "We want every caller to get a 10-second commercial during their visit with a new-accounts person."

Crafting such a statement often takes a lot of thought, but it's a high-return investment. In this commercial, identify at least two or three unique and easy-to-understand reasons why a caller would benefit from banking with you instead of a competitor. This is not a broad image-branding statement like "we care." Rather, this voice commercial includes distinguishing specifics separating you from "commodity' competitors.

A great example in current use comes from Senior Vice President Scott Parkinson at the [dollar]400 million Bank of Utah. Contrasting the often impersonal approach in high-tech account management, the Bank of Utah still boasts: "All phones are answered by human beings--real, live receptionists, no phone trees." Another example emphasizing deep roots in a rapidly changing banking world would be Castle Bank's "Our charter dates to 1856. We still have a Castle as chairman of the board."

All customer-contact staffers must have this commercial on their lips as they field bank shopper calls. During their dialogue with a caller, one or more of its parts should be inserted. Without giving phone shoppers a reason to become customers, the next bank in the Yellow Pages will do just fine.

3. Develop a proactive strategy for concluding the call. Ending a call with "Thank you for calling" is hardly an aggressive strategy for capturing phone shopper business. Here's a simple alternative:

* Review the call. ("Based on the information you shared, I've recommended the Super-Duper Client Account. Does that seem to be a good match for you?")

* Invite the caller in. ('We would like to do business with you. Can you come in this morning' With what you've given me already, it'll only take about 10 minutes.") A bank should not be a substitute for the financial information desk at the library. Appointments made to open accounts and complete applications distinguish "captured calls" from information calls and are a logical way to measure success.

* Replay the commercial. (With First National, you're cash card transactions are fee-free at all Target stores and our talk-to-a-real-person bookkeeping lines are open for you 24/7.")

Shopper calls that result in "assets captured" and "loans booked" are profitable, win-win transactions. With these modest strategies, the switchboard can become a money faucet.

Mike Hetherington specializes in presenting seminars and consulting on service quality for The Brandt Group Ltd, Bozeman, Mont. The Brandt Group provides services in the area of customer loyalty management.