Is your bank growing through acquisitions?
If the answer yes, you know that mergers and acquisitions are never easy. Banks do their best to focus on systems, processes, employees and customers – ensuring alignment and smooth transition. But in our experience, customer experience typically takes a hit.
If you are going through a merger or acquisition and measuring NPS, it's not unusual to see a 10 to 40-point dip in your scores.
And it's not from lack of effort on the part of your bank – marketing and corporate communications have probably sent out several emails, direct mailers and announcements letting customers know of the transition and what to expect from it. But these communications are not always read or clearly understood, and customers typically note that they were not informed of the upcoming changes/these were lost in the fine print.
So … what’s the secret to a smooth transition? There’s not one secret, but three...
Secret #1: Identify new customer pain-points and equip staff with a Standard Operating Procedure (SOP)
One of our banking clients was acquiring a smaller bank. Our client recognized that a big difference that the new customers would feel is of out-of-network ATM fees – their old bank did not charge these fees.
Our client sent several proactive communications to new customers about this change and ensured that branch staff were aware and equipped to respond to customer concerns, but they underestimated the intensity of customer wrath.
While branch staff anticipated the questions, they did not have a clear Standard Operating Procedure (SOP) on how to respond to customer requests – for example – whether to waive ATM fees the 1st time.
Consequently, staff responses were ad-hoc and inconsistent, and customers were irate.
In the above example, the acquiring bank did spend the time to fully assess the differences between the products & services they offered, and the products & services new customers were used to receiving. But this assessment was conducted only as a features and functionality comparison.
Including a deeper understanding of customer journey & attitudes could have helped to get ahead of potential issues.
Legacy customers might see newer faces at bank branches, longer lines and slower response times, which could impact their NPS.
Acquiring banks should ensure that they are proactively communicating to legacy customers that even as the bank is growing and new employees, branches and customers are being brought into the fold, their loyalty to the bank is appreciated, and their experience matters.
In our experience working with banks going through mergers and acquisitions, customer experience scores always take a hit for 3 to 6 months after the transition.
As mentioned earlier, if you are measuring NPS, a 10 to 40 point reduction is not uncommon, but it needs to be managed.
We recommend two things:
- Communicate to senior executive in advance that temporary dips in NPS could be a possibility. This way everyone has a heads-up and no automatic assumptions are made about declining performance at branch locations.
Pause basing any staff bonus/compensation linked to NPS on NPS scores of legacy customers/branches for a period of 3 to 6 months post-acquisition.
While it is certainly important to measure and track Overall NPS (legacy + new customers/branches), it would be unfair to hold staff accountable for expected NPS dips related to migration factors outside of their control.
That said, it is important to measure staff performance during the transition, and we recommend adding specific metrics to your NPS program to measure this.
Identifying and acting on customer concerns as soon as possible is critical to reducing churn and driving operational improvements, particularly during times of transition like mergers and acquisitions.
○ ○ ○
About the Author
Reshma Bennur is the Vice President of Customer Experience at PeopleMetrics. She leads the organization's patient experience practice and serves as the strategic lead for the design and deployment of Patient Experience Measurement programs in the Pharma and Healthcare space.
Posted on 12-16-2019