Case study Bendigo Bank

CASE STUDY

Bendigo-Bank:Improving Customer Service and Sales Effectiveness and Building a Culture That Promotes Diversity

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A truly values-driven organization, Bendigo Bank’s motto is: “Successful communities and successful customers create a successful bank”. The bank’s focus on communities and exceptional customer service has made it one of Australia’s most respected (and, though perhaps strange for a bank, well-loved) organizations.

The esteem in which Bendigo Bank is held has also translated into high customer satisfaction ratings and organic growth in deposits and accounts (two immediate measures that are impacted by customer service) that far surpass industry standards.

Objectives • To build competitive advantage through a strong focus on customers and

customer service.

• To reinforce a long-standing company culture that supports communities and creates a fulfilling workplace for employees through understanding and supporting diversity.

Desired Business Outcomes To drive organic growth in the bank (customer numbers, deposits, and ultimately profitability and EPS) by differentiating the bank from others in the industry on the basis of a uniquely satisfying customer service experience.

Key Customer Contact(s) Andrew Stagg, Manager - Learning and Development

Project duration To date: Five years.

Program continues to be rolled out to all employees (as of March, 2004) and is expected to continue indefinitely.

Bendigo Bank is a regional Australian bank, operating primarily in Victoria, Queensland, and New South Wales. With over 200 bank branches and approximately 2,200 employees, Bendigo Bank has differentiated itself in Australia’s financial services marketplace as an innovative service provider — both at the customer/bank branch level, and organizationally through its Community Bank program — which has provided local banking to remote Australian communities not serviced by Australia’s “Big Four” banks.

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Client History Bendigo Bank began as a permanent building society in Bendigo, a center of early and significant gold discovery during Australia’s “gold rush” era (circa 1850).

The rapid influx of thousands of people, from all over Australia and around the world, created a community in and around Bendigo that, largely, lived in tents and makeshift shanties. Before long, however, the town leaders of Bendigo saw a need to help people move into more permanent accommodation. It was this need that spawned the Bendigo Permanent Land and Building Society.

The concept was simple. The building society would collect contributions from everyone in the community. Once enough money was collected to erect a building, a drawing would be held, and whoever’s name was drawn would receive the money to erect a permanent building. Everyone continued to contribute, even those who already had a building, and this continued until everybody in the community had been moved into some sort of permanent building. Some of those buildings are still standing in the town of Bendigo today.

The building society always had the philosophy that it wasn’t just about making money, but about helping communities. That’s why all the society’s members continued to contribute, even after everyone in the community was living in a permanent building. All the left over money was invested in the community and soon, the building society also became a profitable supplier to its members.

Throughout the 1900s, the company remained a permanent building society, expanding from one or two small branches in Bendigo to additional locations in surrounding townships. It eventually became the largest permanent building society in Victoria.

Faced with mounting government regulations governing building societies, the Bendigo Permanent Land and Building Society became Bendigo Bank in 1995.

Existing Client Conditions In 1998, when it embarked on its first formal training programs, Bendigo Bank had about 70 branches and 900 employees. By the end of 2003, both those numbers had tripled.

The challenge was to create an operation that would change the paradigm of banking in Australia: that banking is controlled by big, multinational corporations. Bendigo Bank set out to prove that banking could also be controlled by local communities, and can further differentiate itself by delivering exceptional customer service.

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That is why Bendigo Bank began developing a training curriculum to help:

• reinforce its strong company culture and history;

• deliver exceptionally high levels of customer service;

• create a fulfilling workplace for its employees; and, ultimately

• drive improved financial results

Whole Brain® Approaches, Methods, Processes, and Strategies Under the direction of Andrew Stagg, Bendigo Bank’s Manager of Learning and Development since 1998, Whole Brain® Thinking has become an integral part of the bank’s culture and helped it achieve its customer service objectives.

The first training program run by Stagg, under the title “Building the Future”, was designed primarily for managers and executives to help identify and develop ways to build the business while, at the same time, reinforcing the business’s unique culture of understanding and supporting communities and supporting organizational diversity.

“Building the Future” was based on the Whole Brain® Model and incorporated the use of the Herrmann Brain Dominance Instrument® (HBDI®).

According to Mr. Stagg, management was “so impressed with it and what we were trying to do, they decided to roll the program out to everyone in the organization.”

Today, every employee is required to participate in the “Building the Future” program.

As an integral part of the program, Whole Brain® Thinking and HBDI® profiles have not only provided a conceptual model for individuals to discuss and understand diversity but, more importantly, have become core components of the bank’s working culture.

According to Andrew Stagg, staff throughout the bank and its networks are, “literally, talking Whole Brain® speak” and using their own and their colleagues’ profiles to understand themselves, their work mates, and to find better ways to work together and with their customers.

“The model has moved beyond helping people manage diversity, and has become a tool to help manage interpersonal relationships: to help individuals understand why they get along with certain people, and at times, understand

“Building the Future” was based on the Whole Brain® Model and incorporated the use of the Herrmann Brain Dominance Instrument® (HBDI®).

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the person next to them isn’t an idiot or isn’t being impossible, but just thinks differently,” he said.

During the roll out of “Building the Future”, Andrew and his team also built various targeted curricula to train staff in core skills involved in lending, compliance management and customer service. Each was built around Whole Brain® Thinking and the HBDI® profile.

Mr. Stagg said the HBDI® Profile builds awareness of self; self-awareness builds self-esteem; and self-esteem creates performance. The link between understanding one’s self, through the HBDI® Profile, was therefore seen as an important link in creating higher levels of performance.”

As staff became more aware of brain dominance and started to understand themselves better, they also became more aware of and open about their attributes and ares of lesser preference.

The bank won’t force people to improve skills in their less preferred quadrant unless they say they want to, in which case, the bank builds special curricula for them to get that learning experience.

The Whole Brain®/HBDI®-based training program has now been introduced throughout the entire Bendigo Bank network.

When the training team first introduced the Whole brain® Model, rather than employ generic Whole Brain® terminology, they used specific terms to describe the four quadrants thinking preference to their industry.

For instance, to describe the “blue/upper left/A quadrant” segment, they used terms such as: “lending fundamentals”; “financial analysis”; “understanding securities” and other “facts and figures” words.

For the “green/lower left/B quadrant”, they talked about things like time management, procedures, administrative processes and foreign exchange.

“Red/lower right/C quadrant” concepts were discussed in terms of dealing with customers, customer service, understanding people and managing poor performance.

And, for “yellow/upper right/D quadrant” issues, they talked about the future and forward planning, as well as management issues such as staff selection.

As an example of adopting a more “yellow” approach to management, trainers instanced the issue of filling staff vacancies. “Yellow” management would tend to

“The link between understanding one’s self, through the HBDI®, was therefore seen as an important link in creating higher levels of performance.”

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look more at the future, talk to everybody on their team, and build case scenarios for the ideal person for the future, rather than just rushing out and putting an ad in the paper.

The Whole Brain® Model is now fundamental to all the bank’s training workshops, whatever the subject or issue, and has become the framework for learning within the entire bank.

Customer Service: The Key to Success At Bendigo Bank, Whole Brain® Thinking is having its greatest impact on customer service. Indeed, its entire customer service approach utilizes Whole Brain® Thinking.

By way of example, trainers have introduced a group activity that challenges individuals to look at how their thinking preferences may fit with a customer’s thinking preferences.

“We start out by developing an understanding of ourselves and how relationships work before we get them to think about dealing with different types of people” Mr. Stagg said.

Each group is then divided into sub-groups, each of which is required to consider dealing with customers with dominant “blue”, “green”, “red”, or “yellow” thinking preferences. The groups are asked to work out what each type of customer needs, wants, demands, or expects. They are also asked how bank team members can and should best meet those needs, wants, demands and expectations.

Sub-groups discussing “blue” quadrant customers usually come back saying things like:

• They want facts and figures.

• They’re demanding.

• They’ll have done their research.

• They’ll want proof of safety.

• They’ll want to know how all these interest rates work.

• They’ll build their impression of you based on the length of your queue, because, if you’ve got 10 people in your queue it probably means you’re not efficient.

• They can be quite in your face and challenging because they’ll bring in comparisons from other banks.

• They’ll ask you to convince them why your bank is better.

“We start out by developing an understanding of ourselves and how relationships work before we get them to think about dealing with different types of people

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Sub-groups asked to look at “green” quadrant people tend to say:

• They want a bank that will help them manage their life and finances.

• They want reasonably conservative products because they don’t take risks.

• They like accounts where you can have statements.

• They can be reasonably high maintenance customers because they’ll come in and say things like, “Hey, has this check been paid?”, or “I’ve calculated this interest as $9.60 and you’ve got $10.40. What’s the difference?.”

Staff also point out:

• “Greens” will make appointments.

• They’ll pick out their favorite teller and go to that person because he or she knows them and their accounts and will already have their balance ready.

People taking part in Bendigo Bank’s training courses often say “red” quadrant people want, “a smile and good customer service”.

Mr. Stagg said, “A lot of customers come to Bendigo Bank because of our culture, which is very “red”. “Red” people need support and trust and honesty and everything that goes with that: integrity; their safety; and their comfort.” The bank’s staff say “red” customers are likely to come into a branch and bring a birthday cake, because they’ll remember a staff member’s birthday. They also point out that “red” customers are, “great advocates of the bank, because they tell everybody about our service and the great relationship we have with them.”

Course participants often comment that “yellow” quadrant customers sometimes need more help because:

• They can get a little out of control.

• They are generally not good record keepers.

• They want to talk more about the future and possibilities.

• They’re very innovative.

• They can be frustrating at times because they take risks and are not necessarily bothered with details.

• They can also be extremely wealthy.

In the bank’s experience, “yellow” people sometimes need help in the “blue” and “green” quadrants. “However, if you treat them like an idiot, or raise your eyebrows at them, they’ll walk away. That’s why we teach our employees to never underestimate the value of a “yellow” customer, or any of our customers, for that matter,” Mr. Stagg said.

One of the most important applications for the Whole Brain® Model within Bendigo Bank is teaching effective communication.

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One of the most important applications for the Whole Brain® Model within Bendigo Bank is teaching effective communication. The training team provides employees with tools to enable them to “get through to” and link up with customers and colleagues who are both similar to and different from them in terms of thinking preferences.

The team also trains staff to keep in mind that most people don’t have a single dominance but, often, a double dominance or a triple dominance and, therefore, listening skills are very important.

As part of its training, Bendigo Bank builds questions into its sales and service processes that provide clues about people’s thinking preferences. In one training scenario, staff are asked to consider a customer sitting down to talk about a new home loan. Staff are trained to ask questions about the person’s home to ascertain his or her thinking preferences.

They are shown, for instance, how “blue” people talk about their homes in terms of the deal, about bargaining down the value of the house, the settlement time, and the appreciation in value.

They are then taken through how a “green” person talks about a house in terms of how many bedrooms it has and how convenient it is and the built in cupboards and how, “I won’t have to do anything because it’s just been painted and how that house will help me manage my life.”

“Red” people, on the other hand, will talk about “feeling wonderful” about their homes and say things like, “I just walked in and the garden was gorgeous!”. “Reds” won’t know a lot of detail about their homes. They’ll just have a warm or friendly feeling about it.

“Yellows” tend to talk about the potential of the house, what they’ll be able to do with it and how fantastic it will be.

“You really do get an indication of the type of person you have sitting in front of you. Without having that understanding, you’ll naturally stick with the communication style that you’re comfortable with. But if you’re a “blue” person with a “red” person across from you, you’re not necessarily going to have effective communication,” Andrew Stagg said.

Mr. Stagg said he has lost count of the times staff members have said in training sessions, “Oh, I had a customer like that!”

Recently, a staff member told him: “I had a “blue” customer — a lady who came in with a double sided questionnaire. She said she’d just moved into the area

But if you’re a “blue” person with a “red” person across from you, you’re not necessarily going to have effective communication,” Andrew Stagg said.

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and was dropping off the questionnaire to all the neighborhood banks and was going to pick it up, hopefully completed, in two days.”

“She had questions about opening hours and rates and all sorts of interesting factual information,” the staff said.

When the group analyzed this case, participants agreed this lady was “very blue” and suggested the questionnaire was her way of both assessing the bank’s efficiency and collecting data to compare Bendigo Bank with other banks, “which is a very blue requirement”.

Integral to Bendigo Bank’s delivery of its brand of service are:

• The recognition that customers (and staff ) have feelings;

• The need to develop ways to engender warmth and understanding; and

• Talking to people to find out how they’re thinking and what they need.

This contrasts with some of the larger banks which like to have a matrix of accounts that customers have to fit into.

Bendigo Bank shies away from using the word, “sales”, within the organization. Instead, team members talk about developing “great buying experiences” . Also, rather than talking about “selling product”, they tend to see themselves as being part of a service industry that helps customers “get what they need”. A key point of differentiation is that Bendigo Bank works at helping its customers choose what to buy by understanding them, building relationships, and helping them choose products that suit their lifestyle.

“That’s why we put so much effort into our training courses, so staff can develop an understanding of other people and themselves, because you can’t succeed if you don’t understand yourself.” Mr. Stagg said.

“Understanding yourself is the first step. And it’s all done using the Whole Brain® Model,” he said.

Bendigo Bank strongly believes its innovative, Whole Brain® based training program has helped drive its success.

Rather than attempting to position itself as the fifth huge national bank in Australia, which is something of an anathema to its culture and business goals, Bendigo Bank is more focussed on being seen as be the most successful bank in Australia.

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“That doesn’t necessarily mean the largest or the most profitable. It means staying true to a willingness to work with communities to create a better, stronger, future, and a continued focus on our customers and providing exceptional customer service,” Mr. Stagg said.

Postscript and Summary of Outcomes In an Australian Financial Review survey conducted late last year, Bendigo Bank was rated number one in a customer satisfaction poll of over 57,000 bank customers throughout Australia.

In that survey, Bendigo Bank’s customer satisfaction rating of 86% exceeded that of its nearest rival, the regional Bank of Queensland, which came in at 79%, and far surpassed the average for Australia’s big four banks, which garnered 59% customer satisfaction.

A more recent AFR survey (February 19, 2004) again showed Bendigo Bank well in front of its rivals by an even greater margin than last year. Moreover, key financial metrics for the bank, all of which are directly related to customer satisfaction, continued to show dramatic growth throughout the current financial year:

Net growth in customers for the 2003 financial year was 13%.

Net growth in retail deposits for the same period was 20%.

Growth in customers and deposits, along with lending approvals, translated into a 21% increase in after tax profits for the 2003 financial year and a 36% increase for the half year to December 2003.

Just announced, is Bendigo Bank’s position at number four in Harris Interactive’s corporate reputation quotient consumer survey. The Sydney Morning Herald (February 20, 2004) commented, “Growing regional Bendigo Bank bucked the trend of banks lurking at the bottom of the top 20 to come in at number four, enjoying a period of goodwill among consumers as it opens yet more community banks in bank free towns and suburbs.”

A growing number of analysts are also calling Bendigo a “hot stock”.

These days, it seems, Bendigo Bank is coloring a lot of people’s worlds.

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Case study Bendigo Bank

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