When efficiency reduces business

How can streamlining your operations actually cost you business?  Most companies are excited when they find ways to reduce waste and overhead when serving their customers. Just look at the general success stores arehavingwith self-checkout lines, where one cashier can now support 4-8 customers.   Unfortunately, lean processes are only part of the picture.   Unless you validate your operations holistically, you might be doing more harm than good.

Over the last couple years, I had the opportunity to observe a foreign bank evolve their branch operations. The first steps were generally positive.  After remodeling to create better service centers, they divided their customers into three levels based on their banking profile and net worth.  (Sorry, US banks do this too.)  Younger customers who had smaller portfolios were moved to a bulk service line where agents could I quickly resolve any needs that weren’t available using self-service channels.  The agent to customer ratio seemed to be about 4 to 1 with 4 to 8 service windows depending on the queue.  If you were the middle tier customer, the service line was 2 to 1, and hosted by more senior service agents.

So what would happen if you applied the same efficiencies to your prestige customer line? Before, the bank had a special service area for top customers.  They served coffee, had a private waiting area, and usually 2 to 3 available senior agents at desks.  (These agents may have processed other transactions and client needs between prestige customers, but it was hard to tell as an observer.)  Every customer was greeted by name, apologies made if their service agent was busy, and while only waiting a short time to be escorted to their personal agent.

To improve operations, they kept the private waiting area and coffee, but had customer take anumberandwait to be called.  The number would display on board with the service desk they should go to.  Premier customers no longer had a dedicated agent, but were still treated by a senior agent.  Only a small change which should allow customers to be served in about thesamewait time, but result in fewer agents needed.  No big deal right?

The difference was the perception to the customers.  This was the group that had the largest portfolios, and possibly the highest net assets in the bank. (Excluding fee revenue from the largest quantity, lowest net worth deposit customers.)  What was this group looking for?  To feel special, to feel wanted, to feel valued.

Think about your last airline flight.  Is there any reason in the world why first class and medallion have a separate line to board?  If called first, they could easily enter using the same line ahead of all those lowly coach flyers.  The reason?  The airline wants to show their appreciation for the extra business by “rolling the red carpet”.  It also motivates other passengers to give more business to the airline too my motivating them through envy.

So what was the end result for the bank and their new more efficient procedure?  They lost a customer who had been with that branch for 40 year.  The customer moved their assets to a new bank that gave the recognition he/she desired.  How many other customers may be making the same decision?