Co-ops Plans To Remove Service Level Guarantees
The Co-Operative Bank announced over the weekend, that as of 16th September, they will be removing their service level guarantees, according to The Guardian. This seems an odd move in today’s culture, which is so focused on providing the highest possible level of customer experience.
Previously, its customers were guaranteed £15 compensation if the bank failed to meet its own self-imposed standards of customer service.
In light of the news that the Co-Op Bank is being asked by the financial authorities to cover losses of £1.5bn, a spokesperson for the bank has emphasised that the removal of these measures was not a money-saving objective. “This change brings us into line with the industry,” she explains, “it is purely to speed up the resolution of complaints, improving experience for the customers.”
Customers are reassured that the quality of service provided by the bank will not suffer as a result of the technical change.
But customers are not convinced. “Alarmed,” the measure seems to reflect the difficulties being faced by the Co-Op. If the Co-Op has removed any former sanctions for the failure to provide excellent customer service, and is suffering from substantial debt, where is the motivation to remain loyal?
One of the biggest challenges facing businesses today is the need to attract, and ultimately retain customers. In order to build brand loyalty and guarantee returning business, brand strategist Mark Di Somma argues that existing customers need to feel rewarded.
The response elicited from the Co-Op’s alteration to their customer service levels supports Di Somma’s observation. Reward and appreciation are key to customer satisfaction, and return business.
Research conducted by the BBC into customers’ experience with large car insurance companies adds to this point. Many of these large companies actually penalise loyal customers with increased premiums year on year. in many cases, it often proves more rewarding for customers to take their business elsewhere.
As a business specialising in the provision of customer service, we have noticed an increase in companies choosing to outsource their customer service handling. We know that companies providing consistently high levels of care for customers are more likely to retain their existing clients and establish brand loyalty.
It remains to be seen how the Co-Op’s bid to improve “experience for [their] customers” through removing their own service level guarantees, and bring themselves “into line with the industry,” may or may not impact consumer loyalty to their brand.