Complacency doesn't exist at First Direct. Despite an enviable reputation for service excellence, a string of awards and some compelling customer satisfaction statistics, Britain's leading telephone banking operation decided last year that what it needed was a wholly new approach to customers.
'We decided that nothing short of a revolution would do,' says Guy Davis, customer director. 'We were determined not to let our success in the past blind us to the need for continued improvement in the future.'
This determination has resulted in the adoption of a new vision at First Direct. Says Davis: 'The introduction of First Direct's new mission to be Tomorrow's Bank Today is a landmark in our approach to customer service. Our new vision describes the way in which we aim to exceed the expectations of our three stakeholders: our customers, our people and our shareholders. For our customers, our mission is to ensure that they see First Direct as "my bank". Within the last 12 months we have revolutionised our approach to customer needs, placing the customer firmly at the heart of all our activities. For our people, our mission is that they see First Direct as "a great place for me to work" and for our shareholders, our mission is to "sustain profitable growth".'
Launched in October 1989 as an independent division of the Midland Bank, First Direct offers a full banking service by telephone, accessible 24 hours a day, seven days a week. The organisation currently employs 4,100 people on sites in Leeds, Edgbaston and, most recently, Hamilton. All banking representatives who answer telephone calls are trained to handle over 80% of calls without the need to transfer to a specialised department and are supported by a fully integrated IT system.
First Direct believes that the key to understanding the nature and quality of service required by its customers lies in developing a comprehensive profile of their past activities, needs, expectations and future intentions. In consequence, First Direct knows a great deal about who its customers are (for example, 70% are aged 25-44, 38% live in households with an income of more than £35,000 and 82% are classified ABC1) and even more about what they want.
'We understand a great deal about our customers' product and service needs through extensive dialogue with them,' Davis points out. Every new customer is surveyed three months after opening an account, 15,000 customers are surveyed quarterly, 1,000 customers take part in focus groups annually and independent research is carried out through MORI and NOP. 'But probably our most far-reaching and effective two-way dialogue occurs each time a customer calls to do his or her banking,' says Davis. Comment, suggestions and queries are logged following calls, and this direct customer input is used to improve the service offered. First Direct's recent introduction of PC banking follows directly from customer demand. The project was initially piloted among 2,000 customers and the final design is a direct result of their feedback. More than 50,000 customers are expected to use PC banking by the end of this year.
In its quest to meet and anticipate customer demands, First Direct employs a comprehensive framework for monitoring its performance. Customer service is measured according to the levels of complaints and compliments, service, recommendation and satisfaction; staff morale according to levels of satisfaction, recruitment, personal and career development and turnover. According to these measures and backed by independent research, First Direct continues to provide extraordinary levels of satisfaction and service to its 1.2 million customers.
In what is now a fiercely competitive market place, 90% of First Direct customers express themselves extremely or very satisfied with the service they receive (87% last year), a further 9% describe themselves as satisfied and only 1% are dissatisfied. First Direct lost only 3% of its customers last year. In addition, 81% of customers have recommended the organisation at least once in the past 12 months.
First Direct believes that the satisfaction of its people is key to the delivery of excellent service. 'Our mission is that staff should feel enabled, valued and respected,' says Davis, 'and that they see First Direct's success as their future.' In the company's most recent people survey, 88% of staff stated that they were proud to work for First Direct.
The company is now improving on simple measures of staff satisfaction by the introduction of a Culture Critique. 'As competition grows, it's essential that we understand more deeply what it is about our culture that will enable or constrain us from changing to meet those challenges,' says Davis. First Direct is therefore collecting information from a variety of sources including staff focus groups, interviews with ex-employees and current employees to discover how current culture works for and against the company.
Moira Clark of Cranfield School of Management explains why First Direct caught the judges' imagination: 'First Direct is a truly customer-centric organisation, which means exactly what it says. It means placing the customer at the centre of the organisation and revolving everything around the customer. First Direct not only has a unique understanding of what their customers need now but also of what their customers desire for tomorrow.
They are constantly striving to ensure that they recruit, train and develop the right kind of staff to be able to offer service excellence. Finally, a customer-centric organisation means having the vision, values and leadership which inspire customers, staff and stakeholders to want to be part of something very special. This is summed up by First Direct's new vision of Tomorrow's Bank Today.'
KEY BUSINESS LESSONS
- Customer service should not stand still: as customer expectations rise, organisations must adopt new initiatives to meet these increasing demands
- Involve customers in the design of new products and services: 2,000 First Direct customers helped pilot the 12-month project in PC banking
- Call handling: avoid repeated transferring between departments
- Track competitors: how well do you measure up against the competition?
- Develop sparkle: if your organisation lacks passion and energy, find out why
- Be wary of satisfaction levels: research suggests that only highly or very satisfied customers are likely to remain loyal.