Small business can also use the bank's success formula

Asked what the best business strategy is, management expert Michael LeBoef answered: satisfied customers. However, the practical application of business theory rules is not always easy. Daiva Šorienė, Head of Sales and Marketing Division at Šiaulių bankas, explains how the bank has succeeded in earning customer loyalty and how small and medium-sized businesses could benefit from this experience.

According to Ms Šorienė, the Bank regularly conducts research to assess the quality of customer service. Net Promoter Score is used for customer loyalty survey, which shows how many customers would recommend the bank to others.

“Every year, we participate in the secret buyer survey, which evaluates communication with the client, the ability to find out the needs of the client, the offer that meets the expectations of the client, as well as the appearance of the employees, the workplace environment and other customer-relevant service criteria. This year, the results of the secret buyer survey conducted by Dive Lietuva showed that Šiaulių bankas is the best customer servicing bank in Lithuania. The overall average service quality of the banking sector was 89.1%, Šiaulių bankas was rated 98.6% and ranked first among all banks operating in Lithuania according to the quality of customer service. To achieve this, we have put a lot of effort into it and have come a long way. 5 years ago the results of a similar survey carried out were much worse, then the quality indicator of Šiaulių bankas was as low as 63%. That is why we have made a strategic decision to focus our efforts on customer service quality”.

In times of rapid digitalisation of services by innovative companies in all sectors, the decision to prioritize customer relationships may seem risky, however, Ms Šorienė asserts that these performance improvement models do not interfere with each other and even complement each other, ensuring high quality customer experience at all customer contact points with the bank.

"Digitization in the financial sector is inevitable, but it is too cumbersome to concentrate on it, because the customer always wants to be able to choose which service channel is more convenient and attractive to him, according to his habits. A large number of clients expect human communication from the bank, especially when it comes to consulting on financing services. This is particularly relevant for business finance, where projects are more complex and require more financial literacy to find the best solution for a particular business model. It is convenient to transfer standard daily banking services to electronic space for which live customer service is not necessary and solutions are typical. However, banks provide a wide range of sophisticated and non-standard services: to understand them, to explore the conditions, to choose the most appropriate solution that meets customer expectations, both time and financial knowledge are necessary. Only direct counseling can provide a detailed analysis of the situation and answer all the questions”, says the interviewer.

Ms Šorienė identifies one of the services that would be difficult to digitize: the personalized financing proposals.

“Experience shows that customers are not always able to grasp the peculiarities of bank services independently, and therefore specialist consultation is a valuable help. When a client communicates directly with a specialist, he can explain his needs, feel heard and understood. And the bank, knowing the specific, individual situation, can also be more accurate and more flexible. In order for a financial professional to be as close to the client as possible, the bank needs to invest in his competencies and it is not enough to know financial services; he must be able to communicate, deepen into the client's situation. For this reason, we maintain a strategy to retain a wide network of bank branches, although the largest banks in the country are clearly drawing a trend and gradually closing down some of their units, especially in smaller cities. But then, customers who do not want to use electronic channels are experiencing inconvenience, spending a lot of time travelling to the nearest bank unit. And with a unit in a particular city, we can not only serve the residents and businesses of that city, but also establish a closer relationship with the community, better understand the specifics of local businesses”, says the specialist.

According to her, such a strategy allows for a better understanding of the needs of small and medium-sized businesses (SMEs) in the region, and to establish a long-term contact between the entrepreneur and the bank specialist.

“SME representatives often lack practical knowledge about business development and financing opportunities. Young entrepreneurs are particularly distinguished by the lack of knowledge and experience, who look at the start of business with "big eyes". Often, entrepreneurs turn to the bank for funding with only a good idea, but do not analyze in detail its feasibility in real business conditions. If you do not meet face to face with such a client, you can hardly help him to evaluate the business model, goals, competitive environment, anticipate cash flow and understand many more important criteria for business success, - the importance of communication is emphasized by the interlocutor. - There are occasions when the entrepreneur after the consultation substantially changes the approach to the development of the company or even decides not to engage in business yet and to improve the possible business model, to evaluate all possibilities and possible outcome more closely. Assessing the business plan in a timely and comprehensive manner avoids problems in the future, when, for example, an overly optimistic company representative wrongly predicts its business development potential, re-invests and faces financial difficulties after a certain period of time; this makes it difficult for the company to operate, to settle in time with the bank that financed the activity.

The proven formula of maintaining customers by preference for customer service quality of Šiaulių bankas could also bring benefit for small businesses.

“When price differences are significant, consumers usually opt for a cheaper service. But if the price offered by the competitors differs slightly, the quality of service and the relationship with the customer become a key factor. Customers in the financial services sector are particularly demanding in terms of service quality. If the bank provides services that meet expectations quickly and comfortably, provides quality experience, there is no pretext for the customer to change the bank, it is likely that he will come back again and perhaps share his experience with the others, thus increasing the number of bank customers. Therefore, it is advisable to think about whether to spend a huge amount of money on advertising, giving it a one-time service, or more efficiently, to establish and maintain a relationship with the customer, by the first service, showing that you hear what he says, understand his expectations, and that you are looking for the most appropriate solution, service or product for him”, advises Ms Šorienė.

She emphasizes the importance of not only the first impression when the customer comes to the bank, but also all channels of communication with the client.

“For example, customers today can communicate with the bank through 7-8 channels. If at any one of these points the quality of customer service is disappointing, other experience with the bank will also be reduced. Therefore, all channels offering services to customers must be given the same high priority: live communication in the bank subdivision, online bank, and Facebook account, or mobile app”, emphasizes the interlocutor.

According to research, the key aspects that customers value in banking services are reliability (35%), professionalism of employees (33%), high quality of service (33%). To these criteria important for both banks and SMEs, Ms Šorienė adds speed.

“Customers are now accustomed to getting the service of the bank very quickly. The speed of decision-making when financing a business - in this dynamic business world, where competition is calculated in just days, the speed of response to funding - can be the key to business success. Therefore, even a negative answer to the credit will be valuable to the entrepreneur, it is important that it is provided within the shortest possible time”, the specialist explains.

Customers value:

Quality work.
Not surprisingly, in the client relationship building, it is important to perform the work exceptionally good. You can hardly expect for long-term relationship if you don’t try to meet and surpass all expectations. Try to become a value added creating partner.

Regular communication.
Nothing is more important in the client relationship than permanent and efficient communication. Immediately answer e-mails and missed calls, call to ask “how are you” on a regular basis, share your corporate news, also communicate with the customers via social networks if your business model allows it.

Questions.
Ask the clients how they value your efforts and work. Client opinion can be obtained formally by suggesting to fill in a questionnaire, or informally, simply during the conversation. However, the most important is not only to ask the question, but also to listen to the opinion and to take it into account.

Advices.
Most often, clients are thankful for the insights and advices helping them to work better and more efficiently. Advices add value for the clients. These can be extra, free consultations or just insights from own experience.

Partnership.
See customer relations like partnership, where the both parties try to collaborate. In this way, instead of doing what is needed, the both parties get extra benefit.

Source: Small Business