Chapter 17: Short case – Calling SueThe idea of having a Personal Banking Consultant (PBC) seemed a great one at the time it was suggested. For a modest annual fee we would get a differentiated range of ‘relationship’ financial services designed for busy business people like us. These were listed in an attractive glossy ‘membership’ brochure and included a larger overdraft facility with preferential interest rates, free annual travel insurance, a rewards point scheme, a ‘gold’ credit card with no credit limit and our own PBC (Sue) and her personal assistant (Richard), who would be there to help whenever we needed them. Every other aspect would be as before, but our accounts would have to be transferred from our old branch in the south (where we lived until six years ago, but never bothered to move our accounts) to the north, where we now work. Having a remote bank branch had not been a problem until recently. If we needed anything done with any account, we simply had to ring the Assistant Manager in the south and he arranged it. But recently, a Southern WestRegion Office was established, and all phone calls were handled remotely, so it had become more difficult to maintain this personal relationship. Moreover, separate people at different offices, using different telephone numbers, handled our business and private accounts. We were ready for a change.

Despite the attractions of the package described, we were hesitant to accept this generous offer. Changing all the cheque books, credit cards, standing orders, direct debit instructions and anything else we had forgotten, including our personal and business accounts, seemed rather complex and time consuming. We raised these concerns with the advisor who had been sent to sell us the idea, one dark December Monday.

‘Oh, there will be absolutely no problem ... we can deal with all that. All you and your wife will have to do today is to sign a few forms authorizing us to transfer the accounts, and one to agree to the new arrangements. Then leave the rest to us. There will be no problems, it’s easy with all the technology we have today. You should get the new cheque books within seven days, and all balances will be transferred automatically by the computer’.

We signed up immediately – it looked a good scheme, and even the value of the free insurance alone would more than compensate for the annual membership fee. The four cheque books for the two accounts arrived separately, over a three-day period, the last arriving on the Tuesday, nine days after the agreement. The business account cheques had an incorrectly spelt business name, and the current account cheques had my wife’s initials reversed. At the same time, we received (from Sue) a personalized welcoming pack and a professionally presented loose-leaf folder of information concerning the account and PBC services, which confirmed that the accounts were in operation. All this correspondence was correctly addressed and written in a friendly style, using our first names. I decided to call Sue about the spelling.

‘I’m awfully sorry, sir, I’ll order some new ones, and I will ask them to send them to you quickly. I know they’ve had a backlog due to computer problems at the card centre, but they can prioritize any PBC’s cards. In the meantime, you can use your existing accounts, since they are linked to your new ones. I’ll call you to confirm when this has been done. Again, may I apologize for any inconvenience you have experienced.’ One hour later she rang as promised, confirming her actions.

On the tenth day our credit cards arrived, correctly embossed with our names. However, these could not be used for cash withdrawals without personal identification numbers (PINs) and the cheques could not be used in UK retail outlets without cheque guarantee cards. The cheque guarantee card doubled as a cash card, for use at ATMs with another PIN number. Neither PIN number had arrived by the second Friday after our signing-up (11 days). I decided to call Sue, to see what was happening.

‘Don’t worry,’ she said, confidently, ‘The PINs always come a day or two after the cards, for security reasons, and you should get the guarantee cards about the same time.’

By the following Friday lunchtime, returning from a week’s business trip, we were getting concerned. Although our new cheque guarantee cards had arrived and were correct, our names on the envelope were again incorrect, which seemed odd and slightly disconcerting. We still had not received the new PIN numbers. I decided to call Sue, who apologized again, politely expressing her amazement at our dilemma, and asked me to hold while she checked the system.

‘They have certainly been correctly issued on Monday’, she said confidently, ‘and have been sent ... perhaps they have been lost in the post. I’ll check with the card centre what we should do, and I’ll call you back.’

‘You will have to be quick,’ I retorted, ‘We’re just about to leave for a long weekend vacation, but you could call me on the mobile ...’

Sue phoned two hours later and confirmed that because the PIN numbers had been mislaid, it would be necessary to re-issue the cards for security reasons. ‘You should receive the replacement cards and PIN numbers within three days,’ she stated confidently. ‘You should carry on using your original account’s cards until then.’

Her suggestion seemed okay at the time, but proved to be rather more of a problem than we had anticipated. On checking out of the hotel on Monday evening, we discovered that the existing credit card had expired, and the bill came to more than our existing cheque guarantee card limit. We settled the account with a combination of cheques and most of our remaining cash – an embarrassing end to a pleasant weekend.

In the post on Tuesday morning, we were surprised to receive two sets of PIN numbers, along with further cheque guarantee cards and credit cards. We went to the ATM with our new cards to draw out much needed cash, but the PINs were not accepted. Careful examination of the packaging revealed that the PINs related to the original cards, not the replacements! We borrowed cash from a friend and called Sue!By Friday, everything was working and we had received a correctly addressed letter of apology from the card-issuing centre in Glasgow. An excellent bouquet of flowers was delivered that afternoon and Sue phoned to check we were now happy. She even called in to see us a week later, bringing some leather holders for cards and cheque books. We have had no more problems and generally the service is excellent. Sue has, however, confided that such problems are quite common (they apparently use a lot of agency staff in the processing centres, and mistakes are common).But we can always call Sue.

Questions1 What were the gaps between the customers’ expectations and perceptions in the process described?2 How were the customers’ expectations influenced from the outset?3 What aspects of the bank’s service quality specification have been revealed to the customer? Are these reasonable for such an account?4 Evaluate Sue’s reaction to the problems at every stage. Was the bank’s service recovery successful?5 What costs have been created by these problems, and how do they compare with the underlying costs at the root cause of the problem?

Calling Sue1. What were the gaps between the customers’ expectations and perceptions in theprocess described?There was a significant mismatch between customers’ expectations and perceptions that is poor perceived quality. Although the problems were eventually sorted out the events may have left a sour taste in the mouth of the customer, making them even more wary of the bank and any future offers.Looking at each of the gaps in turn:

Gap 1: The customer’s specification-operation’s specification gapThere does not appear to have been a mismatch between what we can assume to be the operational specification (new cheque books within seven days, automatic transfer of balances, overdraft facility, annual travel insurance, gold card and the use of a PBC), as promised by Sue, and the customers’ requirements. We do not, however, know what the internal specification was for these activities. It is possible that the standards were not as needed, which would lead to such a gap.

Gap 2: The concept-specification gapIt is difficult to know if there was a mismatch between the service concepts developed by the bank and the detailed specification of the products and services. One assumes not. The problem of which we are acutely aware pertains to gap three.

Gap 3: The quality specification-actual quality gapThis is an important gap in this case. It appears that Sue was well aware of the problems that were often incurred in these transfers; she referred to these ‘computer problems’ but later admitted to problems with agency staff. Rather than warn the customers of the problems and setting appropriate expectations, she had promised something that she knew would be difficult to deliver. Was this a good idea? Yes, in so far as the transfer was undertaken and she kept the business, but ‘no’ in that she has created somewhat dissatisfied customers who are now even more wary of their relationship with the bank and who may, if they should experience another problem, terminate their valuable accounts.

It is important to remember that all the other parts of the promise (we assume) were kept – annual travel insurance, gold card and so on. The problems that were experiences were only in the transfer process. However, particular promises had been made about this, which were not delivered.

Gap 4: The actual quality-communicated image gapOne might argue that there was no mismatch here. The customers were extremely wary about transferring their account because they had experienced problems with the bank in the recent past. However, the communication they received from Sue provided them with the reassurance they needed to make the decision, which as we know were rather hollow promises.

2. How were the customers’ expectations influenced from the outset?The customers were wary of making the changes to their accounts. They had experienced several other problems with the bank – remote and impersonal handling of their calls at a regional call centre, lack of access to their ‘trusted’ assistant bank manager and different telephone numbers for the two types of accounts. Their expectations were not high though they needed a solution to the problem that the bank had created for them. Sue, however, had a significant influence on their expectations by explaining that ‘there will be absolutely no problem’ and that they ‘should get the new cheque books within seven days’. They went ahead on the basis of trust.

3. What aspects of the bank’s service quality specification have been revealed to the customer? Are these reasonable for such an account?We can assume that the bank delivered on its promises to provide annual travel insurance, gold credit card and a larger overdraft facility, and such specifications should appear to be quite reasonable for such an account. The fact that errors are common at the processing centres due to the use of agency staff is not appropriate for any type of account. The prime concern of the bank's customers is an error-free service and this underpins customers’ relationship with the bank. The use of agency staff implies that the bank is having problems dealing with demand yet consultants such as Sue are pressing clients to make the changes, presumably trying to meet their own targets. This would suggest serious managerial problems in terms of coordination, target setting and capacity management.

4. Evaluate Sue’s reaction to the problems at every stage. Was the bank’s service recovery successful?Problem Sue’s response

One cheque book arrived after 9 daysSue was not told of this problem.

Business accounts had incorrect spellings and current account had wife’s initials reversedSue apologized and ordered speedy dispatch of new ones assuring customers that they could use the old ones in the interim. She promised to confirm her actions which she did.

The credit/cash cards arrived without the PINsSue explained they would take a day or two.

One week later they still had not arrived.Sue apologized, checked her records and suggested they had been lost in the post. Agreed to re-issue the cards.

Names on envelope still incorrect, but correct names on cheque guarantee cards.Next letter was correctly addressed.

Credit cards had expired and ATM would not accept PINs for the original cardsSue apologized and sent a bouquet of flowers. She also personally provided leather holders and cards and cheque books.

Sue reacted as well as she could to each stage. The problems were systemic rather than personal, which these customers seem to have accepted. Although they were dissatisfied during the process, Sue appears to have done enough to appease them. Given that they have had no problems since, customer satisfaction appears to have been restored; however, any further problems, small or large, might well have led to a less measured response from the customers.

5. What costs have been created by these problems, and how do they compare with the underlying costs and root cause of the problem?

The costs created by these problems include Sue’s time, though this is what she is paid for, the costs of rework (reproducing and reissuing the cards and cheque books), the costs of compensation (flowers, leather holders and delivery) and the costs to the customers (goodwill, inconvenience and embarrassment). The root causes of the problems are poor capacity management, lack of communication between departments and inappropriate target setting. Some of these, in particular capacity changes, could be expensive to deal with and the recovery procedures seemed to be being used to alleviate the problems in the short term. The critical issue is whether the bank dealt with these problems in the long term.