First Direct sees customer service rather than telephone banking as such as its USP, says market planning manager Matthew Higgins, and takes the monitoring of customer satisfaction very seriously. Aside from the constant contact with customers on the telephone, the company conducts more formal surveys on a quarterly basis. In the first three quarters, it sends out a postal survey to 2,000 established customers (of one year's standing and more). In the last quarter, NOP carries out telephone interviews with 500 First Direct customers and 500 from the competition, institutions offering current accounts, weighted according to market share. The company also surveys all new customers at the end of their first three months to find out what prompted their transfer to First Direct, and how likely they would be to recommend their new bank. First Direct now holds about 2% of the British retail banking market, with a 25% share of 'switchers', that is, customers who move from one bank to another.
Surveys in the financial services sector should be jargon-free and concise, Higgins stresses, 'not because our customers aren't intelligent but because, basically, banking is boring'. Equally important, surveys should be underpinned by a 'substantial amount' of qualitative research, conducted 'upfront and all the time. Otherwise how do you know what the key issues are?' First Direct holds regular discussions with its customer panels, who represent a cross-section of customers, putting new ideas to them, modifying proposals and then going back to the panels for further comment.
The constant dialogue with customers evidently pays off. Defection rates are very low; and around a third (50,000 this year) of new customers join because of personal recommendation. Company targets for levels of satisfaction and recommendation are 'very stretching, but achievable', says Higgins. Currently, nearly nine out of 10 First Direct customers describe themselves as 'extremely or very satisfied' (5 points) with the service, compared with just five out of 10 customers from the Big Five. 'But we're looking at new ways of conducting research: we can't afford to rest on our laurels.'.