Business banking: segment customers by service experiences?

One in five small business customers in the US has experienced an error in their primary banking relationship in the past 90 days, and one in three are not satisfied with the way their bank handled the problem, according to a new report from Barlow Research Associates...

Account errors affect small business customers' level of satisfaction with their primary bank. Satisfaction levels, in turn, affect the willingness of those businesses to recommend their bank to other small businesses, and also whether or not they will change their banking relationship.

Focus on quality management
Using data from 4,000 responses from small businesses during 2001, Small Business 2002: Service Zones details experience-based bank strategies which efficiently utilise resources for better customer contact. The report establishes that error resolution is one small but important part of a complete quality management plan, highlighting ways in which banks can better identify and address the service issues causing low levels of customer satisfaction among small businesses.

How to keep the customer satisfied
With strong error resolution practices and the right quality management strategies, the relationship between bank and customer don't need to be harmed, often making the difference between keeping or losing a small business customer when problems occur. Although banks throughout the US are already working on improving the quality of customer service, such initiatives sometimes miss the individual issues that lead to lower levels of customer satisfaction, lost cross-selling opportunities and client defections.

"The research shows conclusively that bank errors jeopardize customer loyalty and morale," says John Barlow, president of Barlow Research Associates. "However, 80% of bank errors occur with only 12% of the customers, so why have a quality management programme that treats every customer the same?". The report suggests segmenting customers by similar service experiences to establish the best course of action for each group.