Services Design - 11/20/17

ASSIGNMENT 2

Service location: A Long Island Credit Union – Headquarter branch location.
Research question: What motivates new customers to open an account with a new financial institution?
Methodology: Due to the sensitive nature of banking and to protect customer privacy, I chose to do participant observations for 1 hour in the main lobby of the headquarter branch, without interviewing customers. The observations aimed to see how new customers that did not have a prior relationship with the financial institution were provided banking services by branch representatives. I also briefly interviewed the branch representatives after their conversations to ask follow up questions regarding:
- How did the new customer hear about the credit union?
- How did the representative explain what a credit union is and eligibility, or was that even necessary?
- Did the representative think the customer was switching their primary financial institution relationship to the credit union? If so, why did they believe that?
Observations: I observed about 8 customer interactions, varying in length. Some observations I wrote down were:
- New customers came in with an intention of getting a specific product.
- Most had heard about the credit union because a friend or family member already banked there. One person had seen an advertisement in the local paper and wanted that rate and product.
- All branch representatives were friendly but the ones that built a repertoire with the customer to figure our their needs delved deeper into a conversation. Those customers seemed more open about describing their financial situation and discussing other options with the representative.
- One customer had closed their accounts with a bank because the bank had unfairly charged them fees, and had heard about the service at the credit union. Through conversation, the branch representative gave them material to switch their direct deposit and equipped them with a debit card and checks.
Conclusions/Insights: Some general observations that I concluded about the service design is that it primarily focused on how personable the branch representative was willing to be with new customers. The branch representatives that were friendly and seemed genuinely interested in getting to know customers and their needs had more success that those that were simply fulfilling requests. The measure of success was the branch representative selling the customer an additional product or service that they needed, but had not originally come in for. There was also a checking promotion going on during the field observation that automatically entered customers who opened a checking account to win up to $5,000 in a digital scratch off. There were two branch representatives that mentioned this promotion along with the features and benefits of the checking account. During one interaction, a customer asked to open the checking account, and while the branch representative did open the account, they did not mention the promotional offer or details. Whether it was a marketing advertising piece that brought a new customer in, or being angry about the customer experience at their previous bank, the branch representative's conversation was really the differentiator on how the customer engaged with their new financial institution.
Recommendations: It seems like new customers go to the credit union with very specific intentions to open an account or apply for a loan. The branch representatives have a larger degree of control of the conversation than I originally thought. While there were a few representatives that handled the transaction efficiently, the members that seemed to walk away happier were the ones that had been asked about their needs. Those members walked away from the representatives smiling and warmly saying good bye. A possible improvement to providing financial services to new customers for this financial institution would be to train their branch personnel to be friendly and personable, with a focus on the customer needs rather than meeting a quota for opening an account.