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Winning with service.

Winning With Service Coaching employees to deliver winning service takes keen strategies and star players. Here's a look at a Connecticut bank that went all the way with its customer service game plan.

It's no secret that service is a powerful competitive weapon. And few lending institutions fail to recognize the power of a flawless "service recovery" - that display of exceptional service that wins back a dissatisfied customer.

But the real competitive opportunity today lies with those customers who are neutral - the 90 percent or so of a typical institution's customer base who are neither dissatisfied nor delighted.

Neutral customers may transact business with you, but they feel no particular "team loyalty." Consistently superior service, however, can turn them into delighted customers who will return for your products and services and recommend your institution to others.

Delivering superior service depends on the people on the front lines. Their skill - or lack of it - can influence hundreds of customer relationships every week. One bank that successfully mounted a service effort to stay competitive is People's Bank of Bridgeport, Connecticut.

People's Bank's service commitment - top down and with middle management accountability - has resulted in new initiatives at the bank, all directed to the customer. The results have been impressive.

When queried in 1991, 87 percent of People's customers indicated that they are either "satisfied" or "very satisfied" with the service they receive - a significant increase over the 1990 level of 79 percent. When asked if they believe that they are treated like a "valued" customer, 85 percent of those responding in 1991 agreed, compared to the 75 percent who agreed when queried in 1990.

What was the bank's winning strategy? They provided their front-line people and their managers with the skills they needed to excel every day, with every customer, whether the customer was neutral, dissatisfied or already delighted. Here's how they did it.

Training: the key element of change

Dotting the Connecticut region with a network of 73 offices, the 149-year-old People's Bank is a leading residential mortgage lender in the state and the largest savings institution headquartered in New England.

In 1988, the human resources development department of the bank initiated its "Value-Added Service" program. The program was created as a response to two market studies undertaken by the bank. One, a 1986 shopping study by Barry Leeds and Associates, measured People's service quality and professionalism against local and national norms. The study found the bank was lacking in both areas. Another internal climate study in 1987 indicated that People's Bank employees were significantly less favorable about the quality of service provided by the bank than were employees of other organizations surveyed by the Hay Corporation. Also, this second study revealed that People's employees were less favorable about service than they had been in a similar survey conducted three years earlier.

Clearly, research results revealed that there was the potential to improve the bank's standing among its consumers. People's Bank, therefore, undertook a massive training and organizational development effort that included in-house programs along with vendor-developed training efforts to create a new service culture. During the initial steps, the bank's human resource department formed a project group to set objectives for achieving a total quality service culture that was based on the concept of value-added service.

The concept of "value-added" was ingrained in the service culture at People's Bank to help management and employees reach and exceed their normal goals, and specifically to: "increase the ability and willingness of all employees to value the customer, and at the same time, value each other as well as themselves," says Carole Callahan, manager of management development at People's Bank.

Teamwork

One program that has shown remarkable results in reaching and maintaining the bank's value-added customer service objectives is People's "team-based incentive system" piloted in 1990 and implemented last year. The incentive program was designed to: support the sales culture; develop the entrepreneurial spirit among employees; create a strong sense of teamwork; increase profitability; and provide cash compensation that corresponds with the performance of each branch.

"This system has brought the most change," in the employees' attitudes about service, says Callahan. The team-based incentive system works by using "mystery shoppers" who go into branches and evaluate how they are treated. They mystery shoppers assign ratings to each branch according to very detailed criteria that is based on the standards that employees have learned in People's training program. Branches are rated according to three performance areas, with ratings weighted as follows: 55 percent for sales; 30 percent for service; 15 percent for profitability. If the branch, or "team," is awarded an incentive, all employees of that branch share in the reward, with the amount prorated according to position.

After six months of implementing the pilot incentive program in 1990, pilot branches outperformed control branches by 15 percent in sales; by 22 percent in telephone customer service; and by 41 percent in in-branch customer service. This year, after the first quarter, 98 percent of the branches got an incentive, and after the second quarter, 100 percent of the branches were awarded the incentive, according to Callahan. John A. Klein, senior vice president of consumer banking, attributes this success to the cohesive attitude among the employees in People's branches. "Branch banking is a multiproduct, interdependent environment requiring a team effort," he says.

And the bottom-line results? In the first quarter of 1991, profitability improvements saved the bank $150,000, according to Callahan. Much of that savings was due to a reduction in operating expenses and reduction in overtime, as well as from the generation of income from fee-based services such as safe deposit boxes.

The training game plan

Angelo R. Peluso, senior vice president of human resources at People's Bank, says, "What we call our |value-added project' has several components critical to its success. Among them [are] senior management involvement; research and measurement; and identifying and removing barriers to service. The most basic component, however, is training."

Carole Callahan agrees. "Training is key to developing the right capabilities and values in both employees and managers," she says. "Without the ability to follow through, our people can't act on their good intentions and desire [to provide] service."

People's Bank began its pilot training program for value-added service in 1989 in New Haven. Since then, the training has been rolled out gradually throughout the bank's branches, offices and departments in its four regions, as well as at the bank's corporate headquarters in Bridgeport. Callahan estimates that almost 2,000 employees and managers have been trained under the new customer service program within the last two-and-a-half years. In addition, the program is ongoing, and all new hires go through the same program.

Employees who undergo the training do so in a series of steps. Before the formal course begins, employees and managers participate in focus groups to share their comments and viewpoints. This helps "pave the way" for employees to accept and understand what the value-added project is all about, says Callahan. In addition, she says, sometimes these comments include viewpoints about operational procedures, such as computer functions. Thus, managers receive input from a variety of areas on how customers could be better served. Callahan says one method used to elicit ideas and opinions about service is to ask employees: "If you were the head of the bank for one day, and had the power, what would you do to improve customer service?" Callahan says they also strive to find out "what employees see as obstacles to customer service." Thus, on many levels, these group discussions serve to align front-line employees with the value-added program's objectives, even before the formal training has begun.

Managers also attend a half-day program that teaches them about the manager's role in creating a value-added service culture. The comments from the focus groups are compiled and then are provided to the participants of manager training sessions as the basis for their discussions, according to Callahan.

The first formal training begins when managers and employees attend a two-day course on value-added service. The course, developed internally by the bank, sets out as its premise: You must first manage yourself before you can begin to influence others. Participants learn to examine their beliefs about themselves, the business they are in and their customers. They learn to also assess their own strenghts and their customer's strengths, and they develop skills to communicate effectively with customers and to learn how to manage tense situations.

Managers carry the ball

A key strategy of the value-added project has been to involve managers in this introductory training, not only as participants, but also as facilitators who are able to guide and stimulate discussions in subsequent sessions of the value-added course. In this way, they champion the project and, simultaneously, enhance their own coaching and customer relations skills.

"Managers are our standard-bearers and support for sales and service," says James P. Biggs, executive vice president of marketing and regional banking for People's Bank. "Their development is key to achieving our mission of creating a service culture here at People's."

After attending People's introductory training programs, managers participate in a two-day program called "Interpersonal Managing Skills." This program, based on management data from approximately 900 companies, was developed by the Stamford, Connecticut-based consulting firm, Learning International, Inc., and the package was customized for People's Bank. This course focuses on developing managers' leadership and coaching skills to sustain customer service over the long term. These skills enable managers and supervisors to demonstrate how they value their employees and to set standards for employees behavior with customers. Some of the skills taught in this management program include: giving positive feedback and recognition; criticizing constructively; leading productive discussions; listening for understanding; and learning to manage priorities when several different situations crop up at the same time.

Callahan emphasizes that this kind of management development is crucial to changing corporate culture, and, even more important, it is necessary to maintain new cultural values over time.

"Coaching skills are fundamental to our success," she observes. "Managers who know how to coach help employees incorporate new skills into their behavior. They also direct [employees'] performance so it stays on strategy and high quality," she says.

Problem-solving

Another program that is used as a follow-up for the basic value-added training is designed for the bank's managers who deal with problem-solving. This training program, "Team Leadership and Problem-Solving," was a collaborative effort between People's Bank and Learning International.

This three-day program trains key middle managers and gives them the tools they need to improve and innovate customer service. "Team Leadership and Problem-Solving" is designed to train managers across functions - that is, it brings managers who work in different areas of the bank together to participate in this training. For example, People's has brought together employees from the mortgage area to participate in this program along with marketing managers and branch managers. This method improves cross-functional problem-solving and enhances teamwork throughout the entire bank, according to Callahan. Another benefit of the program is that it establishes standards for consistent quality and team dynamics for the institution as a whole.

Training in team leadership and problem-solving is offered not only within the context of the value-added project, but is also part of People's quality improvement project, a parallel effort involving quality improvement teams that exist in each department or regional office. All 200 members of the local quality improvement teams are required to participate in the team leadership and problem-solving program.

The cross-functional training at People's has realized significant results in resolving customer service issues. For example, three managers who underwent the training through the full program solved a branch and operations problem regarding automatic teller machines (ATMs). The three program alumni led a local quality-improvement team investigation into the delays that customers in the New Haven area were experiencing in receiving their ATM cards. These delays were sometimes as much as six to eight weeks. As a result of the methods and procedures learned in the training, the group took a step-by step approach. They first focused on defining the problem. Then, they brought the right people together in one room and "brainstormed" to come up with a means to solve the problem. As a result of the solution determined by the group, New Haven customers now receive their cards in seven to ten days.

Measuring results

People's reinforces its training through many avenues. Some of the methods used are through sales and service support programs, measurement of sales and service, including the use of mystery shoppers who score service levels, and the branch team incentive program based on profitability measures, service measures and sales results.

The ongoing research and measurement that supports the value-added service project takes different forms. For example, People's market research department queries customers on a regular basis by sending questionnaires directly to customers' homes. And internally, the bank's human resource development department has also designed self-evaluations and management evaluations that are conducted at every step during the training and sales process. The data from these measurement and evaluation systems have guided the bank's continuous improvement efforts and provide the performance criteria for its expanded incentive programs. To improve branch performance, for example, People's revised and broadened its incentive program to include front-line service employees. The results have been significant, with nearly all branches receiving incentives last year.

People's is also introducing a new standards-based performance management system that will align individual performance with the bank's strategic objectives in the area of service. In the regional banking division, a task force comprised of the executive vice president regional managers, area managers, the corporate sales manager and the corporate service manager, identified six areas of accountability for measurement and annual reviews. These areas are service, sales, expense control, operations, community relations and human resources. Then the task force assessed each management position within the bank's regional banking division and devised a performance plan for each position. Each plan defines superior performance in the six areas. Yearly appraisals hold these people accountable for the superior performance goals.

Senior management leadership

People's all-out approach to creating a service culture mirrors the results of a recent study by Learning International. In research conducted among 150 employees of 14 companies that are known for, or are striving to achieve, superior customer service, the consulting firm found that service-minded organizations take a "multidimensional" approach, much like the approach at People's Bank, to ensure that customer service is top rate. "By multidimensional, we mean [using] training, performance management, research, a senior management support system, a team incentive system and the use of shoppers [to support customer service]. This is, of course, simultaneous with [implementing] improvements in operations," says Callahan. Further, People's not only hires the best employees' skills and talents and motivates them to sustain high performance.

Learning International's research also revealed the critical role of senior management's commitment to customer service. At People's, senior management not only established the team-based incentive program and the performance management system, but they created two new positions to champion the customer's cause: corporate sales manager and corporate service manager.

Another method People's senior executives use to get involved in customer service is through "hands-on" participation with a teller or customer service representative during what the bank calls an "In-Touch Day."

This senior management involvement is typical of organizations that excel at service, according to Learning International research. "Senior managers play a key role by advancing the organizational service culture and motivating employees to perform at peak effectiveness," says Dr. Edward R. Del Gaizo, director of research for Learning International. "The [Learning International] study results show that managers need to place greater emphasis on tactics and implementation to support and guide their people to accomplish their organization's goals," says Del Gaizo.

Thus, the top-down commitment of People's Bank, along with middle management accountability, have resulted in a dramatic change in the level of satisfaction from the bank's customers. Implementing this type of strategy is of vital importance in order to win over the slice of the customer base that is currently "neutral" in today's competitive environment.

As Callahan of People's attests, "At People's, we've learned that developing a service culture is a complex process. We've learned that management development is a key element of that process. Good management skills enable managers and supervisors to demonstrate that they value their employees," she says. "This management behavior is reflected, in turn, in the employees' value-added treatment of our customers."

Sandra Edwards is an account executive with Learning International, Inc., Stamford, Connecticut, a research and consulting firm specializing in service management and supervisory training.
COPYRIGHT 1991 Mortgage Bankers Association of America
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:customer service programs
Author:Edwards, Sandra L.
Publication:Mortgage Banking
Date:Nov 1, 1991
Words:2762
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