The holiday rant

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I'm sorry there is just no call for it!

As I am in a holiday mood I thought you might like to hear another sad personal story of how to get the customer experience wrong. Or, is it a not-so-subtle ploy to make me take part of my banking-business elsewhere? The problems I encountered have led me to ask questions about the actual services offered, and whether they are really geared towards my needs.

Many people tend to go on holiday at this time of year as school term ends and families can be together. I needed to get some currency and travellers' cheques for my family’s latest adventure. At LTSB (better known as Lloyds TSB, one of the largest UK banks) if you need currency and/or travellers' cheques you have to order them. Now in my town nearly every travel agent, bank, post office and even a retailer - Marks and Spencer - offers currency and travellers' cheques across the counter. Not so LTSB!

I ordered my currency and travellers' cheques on a Thursday and went to pick them up on the Monday. However, someone had failed to process my order for travellers' cheques, and I was asked to return for them on Wednesday. You can imagine my feelings. The only place in town that does not let me have instant access, fails even to process my order correctly. What if I had been going on holiday the next day? Well, of course I would have had to go to a competitor - I would have had no choice. I am a gold service customer and I get my currency free of commission, but other outlets offer just as good a rate plus a small commission and, I now believe, a better service for that small fee!

I could have ordered my currency by phone and the bank would have immediately drawn funds from my account. But that would have been worse. The bank would have had use of my funds whilst I waited for my cheques, probably with no recompense. So I had to go into town again – the cost of dealing with a competitor now becomes a saving. I could have reduced my travel and parking costs by dealing directly with a competitor in the first place, and in future I might do just that. Another enjoyable experience, given that I have travel insurance with LTSB as well (I think of myself as good customer - maybe I am delusional!) was having to ask three times for a copy of my travel insurance policy to be sent to me!

I have banked at Lloyds ever since I became a senior manager in their corporate banking division, and continued my 'relationship' with them after I finally left as chief manager in 1992. I see myself as a loyal customer not an apathetic customer. LTSB provide overall a reasonable service that meets most of my personal and business needs. Yet I feel they are now forcing me to take some of my banking needs to a competitor; could it be that that is just what they want?

LTSB have a large investment in terabytes of customer information, a large-scale customer information infrastructure, a history of customer first programmes, CRM initiatives and an attention to making money. With this in mind, they may have worked out that there is no future in offering easy access to foreign currency and travellers' cheques in their current branch structure. This action reminds me of an old television advertisement where on a hot sunny day a man goes in to a public house (or for my US readers a "bar") and asks for an ice cold Guinness. He is told that there is just no call for ice cold Guinness. Yet in fact he was the tenth person that day to ask for it. You can see that there is 'just no call for ice cold Guinness' as there is 'just no call for on the spot access to currency and travellers' cheques'! So all the others offering foreign currency and cheques on the spot must have it wrong or they are working to different metrics!

LTSB has made no secret of where it expects to get profits in the future, since the government has put an end to its thoughts of buying Abbey National (a major UK personal financial services provider). LTSB's message clearly spoke of domestic growth fuelled by their investment in getting closer to the customer to sell them more. LTSB has had a customer first programme for a number of years and has spent many millions of pounds on getting one view of the customer, as well as on other CRM activities. They have steadily purchased organisations to enable Lloyds TSB to become a one-stop shop for all our financial needs. From the purchase of Abbey Life (insurance products), Cheltenham & Gloucester (Mortgages), Scottish Widows (investment and assurance) and not to mention an ill fated foray into estate agency, they have moved to the one stop financial shop for all your banking, borrowing, insurance and investment needs - or nearly all of them.

In the LTSB annual statement for 2000 they say: "Going forward, the thrust of our strategy is about organic revenue growth through customer relationship management, leveraging the strength of our brand and our multi-channel distribution capability, reducing our day-to-day unit costs and driving forward our e-commerce strategy". You can read the chairman's statement for yourself:

http://www.investorrelations.lloydstsb.com/results2000/int2000.cfm?option=2

LTSB has spoken openly about its investments in CRM and how it wants to treat different customers differently. It certainly is treating customers going abroad differently from its competitors, with regard to foreign currency and travellers' cheques. I wonder what LTSB's systems are telling them about the true customer experience and what it is doing for relationship building? I am also pondering the savings made by not offering what the customers actually wants (ie instant access, a good rate and a consistent reliable level of service)? CRM is about building long term relationships founded on a value exchange between two parties. So my question is not about the mistakes made but about the overall service offered: is there something LTSB know that the other organisations don’t? I have done my part - now it's over to you LTSB!

To review some of Lloyds TSB's moves to CRM please review the following sites.

Group Customer Management:
http://www.unigraph-design.com/gcm/default.html

And 2000 Interim Results presentation:
http://www.emincote.com/lloydstsb002/sld_pres02.htm

Your comments are welcome and I will get back on track for my next customer knowledge infrastructure article after my holidays...and once I get my travellers' cheques.

Comment can be added directly to this article - or simply email me at: [email protected]

Best regards,

Michael Meltzer

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avatar
25th Oct 2001 15:30

Michael,

Sorry it has taken me so long to respond to your article. Not only holidays, but also illness of key players has caused the delay.

The below sets out the relevant facts. Obviously, if we had had time to comment, we could have built our response into your article.

Clearly in your own case, an error occurred which meant that the funds were not ready for collection on the following day; I am sorry that you were inconvenienced and am sure that the local manager will investigate if you want to take it further.

CRM: Lloyds TSB Travel Services
-------------------------------
Prior to the merger, both Lloyds Bank and TSB reviewed their networks of bureau branches in the 1990's. As a result we maintain a network of 80 bureaux across the country offering:

- the immediate sale of foreign bank notes and American Express Travellers Cheques
- the facility to purchase bank notes and Travellers Cheques

Of course, we keep the size of our network under constant review, both in the context of what our customers tell us what they want, and our competitors' offers.

The following facts are relevant:

- only 5% of our customers buy their travel money on the day of travel
- customers can request that funds be available for collection the next day
- we offer next day home delivery for customers ordering by telephone
- customers can exchange foreign money for sterling at any branch immediately
- we do not subsidise commission free offers with fixed price "handling fees"

And our customers like what we offer:

- 78% rate the travel money service as very good / excellent.
- the quality of our service is first class. We received a 5 Sigma rating (233 errors per million) during a review earlier this year. This is supported by the fact that this year we were asked to fulfil travel money orders for the Post Office.
- we have a 9% share of the UK market, and this is increasing (source: Lloyds TSB and American Express market analysis).

Thanks (0)
avatar
09th Nov 2001 13:16

Increasingly, companies are selective about which market segments they choose to operate in, and use CRM to make real decisions at specific "moments of truth" -- encounters with actual or potential customers. I believe that, whether or not the company decides to do business with the potential customer, it matters very much how these encounters are handled. A personal example illustrates one way not to do it.

I was shopping around for a high interest, instant access account. The Cahoot offering from Abbey National was widely recommended as one of the best, so I got onto their website, filled in the application form and clicked the submit button. After a few seconds, my application was rejected, presumably by some automated scoring system. I didn't save the message, but the gist of it was "thanks for your interest but we don't want to offer you an account".

It felt like a slap in the face. I wondered if I'd made a mistake completing the form, so I tried to go back and review/revise it, but the site wouldn't let me. There was no explanation of why my application had been rejected. I called their helpdesk who said I could write a letter asking for a review of the decision - an email was not acceptable to this "Internet bank". At that point my patience was exhausted and I turned instead to Egg, and was welcomed with open arms.

With hindsight, it seems likely that Cahoot turned me away because their system deduced that all I wanted was their higher-than-average interest rate; and I was probably not going to use any other of their services from which they could earn enough to justify paying me that level of interest. In itself, the "loss" of my business may well be a "win" to Cahoot. But will I return to them for future needs, or will I spread word of my dissatisfaction with their treatment of me? I hope for their sake that their behaviour is well thought through.

Thanks (0)
avatar
25th Oct 2001 15:30

Michael,

Sorry it has taken me so long to respond to your article. Not only holidays, but also illness of key players has caused the delay.

The below sets out the relevant facts. Obviously, if we had had time to comment, we could have built our response into your article.

Clearly in your own case, an error occurred which meant that the funds were not ready for collection on the following day; I am sorry that you were inconvenienced and am sure that the local manager will investigate if you want to take it further.

CRM: Lloyds TSB Travel Services
-------------------------------
Prior to the merger, both Lloyds Bank and TSB reviewed their networks of bureau branches in the 1990's. As a result we maintain a network of 80 bureaux across the country offering:

- the immediate sale of foreign bank notes and American Express Travellers Cheques
- the facility to purchase bank notes and Travellers Cheques

Of course, we keep the size of our network under constant review, both in the context of what our customers tell us what they want, and our competitors' offers.

The following facts are relevant:

- only 5% of our customers buy their travel money on the day of travel
- customers can request that funds be available for collection the next day
- we offer next day home delivery for customers ordering by telephone
- customers can exchange foreign money for sterling at any branch immediately
- we do not subsidise commission free offers with fixed price "handling fees"

And our customers like what we offer:

- 78% rate the travel money service as very good / excellent.
- the quality of our service is first class. We received a 5 Sigma rating (233 errors per million) during a review earlier this year. This is supported by the fact that this year we were asked to fulfil travel money orders for the Post Office.
- we have a 9% share of the UK market, and this is increasing (source: Lloyds TSB and American Express market analysis).

Thanks (0)