Little love for MicroBusiness

Why did mystery shoppers seeking to establish a new banking relationship find the banks so painfully inconsistent and indifferent?

BY ANDREW INWOOD

February 5, 2010

Australia's largest banks are struggling to deliver a consistent experience to small business customers, reveals the latest findings from research group CoreData.

The research was conducted over a period of three months, with mystery shoppers recruited that were either in the process of starting a small business or seeking to change their business banking relationship.

This is the second year the survey has been conducted and for the second year, the results have revealed that service understanding and intention haven't really improved across the country and that in some cases - notably BankWest, service appears to have completely collapsed.

The research, which covers the process of beginning a new bank relationship from first call to final execution, highlights the fact that the quality or process in most Australian banks is effectively random and that a number of banks appear disinterested in the business altogether.

The potential new customers were looking for a deposit account, trading account, line of credit facility and a credit card and had a turn over of up to A$1 million per annum.

Their experience was characterised by:

Real difficulty in getting and making appointments:  The process of making appointments for many of the banks appears completely inconsistent.

A failure to explain the benefits of their offer: Few banking staff members were able to explain what they did that was different to other banks - or talk about the cost to the consumer.

A distinct inability to bundle: Despite the fact they knew the shopper wanted a range of services, very few providers talked about the benefits of bundling services.

Very poor follow up rate:  Less than half of the shoppers were followed up after their first meeting. It's worth noting that every business that changed their banking relationship was followed up by the banker they saw within 48 hours.

A distinct inability to look into a consumer's total picture:  Few of the bankers actually took the time to get to know the client. One of the mystery shoppers was refused a line of credit at four of the five banks she saw because she did not own a property. The one that secured her business also got the $3 million cash she was holding after the sale of her last property.

What's really important?

One of the important things to consider about the sales process is that not all elements are considered equal.

For example ANZ, which did well on almost all elements of the process, was comparatively weak on expertise and professionalism - a core driver of decision-making for small businesses. This meant that in this research at least, it was effectively out competed by CBA and Westpac, which got the lion's share of the new business.

Andrew Inwood is principal of financial services research company brandmanagement.