Banks that deploy mystery shopping to evaluate their customer service can get more useful results if they prepare their staff ahead of time, rather than make it a game of gotcha, retail bank specialists said in ABA Bank Marketing.
"You may think you get better results if you’re catching them unawares," but that approach can backfire if it makes employees feel tricked and vulnerable to punishment, says Shelly Loftin, senior vice president of retail banking, lending and payments at the American Bankers Association (ABA).
It’s better to bring staff in on what you’re doing to make it clear the practice is about helping them build on their strengths. "They need to know that this is about learning what the customer is experiencing," she said.
Many banks employ mystery shoppers to get a frank look at how well they’re measuring up on everything from the tidiness of their parking lot to the knowledge of their staff to the speed of their online interface, the ABA Bank Marketing report said.
The idea is to ensure retail operations and product lines are compliant as well as consistent with brand promise. By vesting staff with a sense of ownership in the process by modeling for them what they should be doing, when the secret excursions begin, they will feel they’re a part of the effort.
"If they receive a less-than-stellar shop, there is no excuse," says Jackie Hester, vice president and marketing officer at Citizens Bank in Philadelphia, Mississippi.
Prior to launching its shopping program, which it conducts quarterly, Citizens Bank adopted customer service standards, made sure staff had a copy, and brought in a trainer. "We want our employees to strive for exceptional customer service every day," Hester said.
Erin McCormick, senior vice president at mBank in Manistique, Michigan, said the desire of bank employees to provide great customer service is "innate," but it’s up to executives to show staff what that looks like. The value of mystery shops, she said, is that it can provide that picture for them "in a more natural customer interaction."
Weak on compliance?
Mystery shopping can also expose weaknesses in a bank’s regulatory compliance. A branch manger might not have quoted interest rates in terms of APY or a lending officer might not have provided proper disclosure information.
When these types of weaknesses are uncovered, it's up to bank executives to have in place a process for correcting them and to double down on training so they don’t continue to happen. Banks are also required to report the lapses to regulators.
One area bank examiners are closely scrutinizing is fee-based add-ons, such as life insurance and prescription drug benefits, that many banks offer with their deposit accounts, said Heather Vaughan, senior managing director at Bankers Assurance, a compliance consulting company.
How regulators deal with these lapses vary, but as a general matter, examiners are pushing for banks to self-identify lapses and then correct them. "If they can do that, showing the steps they went through, and what they did to fix it, it should be okay," she said.
For that reason, when setting up a mystery shopping program, bank executives should not only bring frontline staff in early to get their buy-in; they should also have marketing and compliance work together so addressing compliance issues is built in from the start.