Rules of engagement

by 13 May 2008

ASB Bank went from well-respected to world class in just a few years. This was due to a dedication to customer engagement coupled with employee engagement. Sarah OCarroll speaks to Murray Beckman, chief manager corporate development, and John Barclay, head of HR, to find out how they did it

New Zealand’s ASB bank has won the title of New Zealand’s number one large bank in terms of customer satisfaction for six years running, but back in 2002, when Murray Beckman and his team did general customer satisfaction surveys they were already happy with their lot.

Their customers seemed happy and the bank didn’t believe it had a whole lot to improve on. But when the team asked a separate set of questions, which measured how ‘emotionally’ attached to the bank their customers were, they realised what a fragile situation they were in.

It was revealed they could lose most of their customers to competitors at the drop of a hat. While their customers were satisfied they were also highly poachable.

The bank was a far cry from realising their vision of leading NZ in financial services and customer service.

“When we measured ourselves against the world we weren’t nearly as good as we thought we were,”says Beckman, chief manager corporate development.

“But just doing more of the same wasn’t the answer,” adds John Barclay, head of human resources, “because our competitors also continued to lift their game.”

So they mulled over a principle from Gallup, namely: ‘Profitability comes from having emotionally engaged customers and emotionally engaged customers come from fully engaged staff.’And devised a plan.

The car-park test

ASB thus embarked on a mission to achieve their vision: to emotionally engage customers it was essential to first engage employees because only they could change customer perception.

Vision statements were printed on cards for employees to carry in their wallets, they were on every email sent and hung on plaques in every bank. And the statement was simple: to be New Zealand’s best bank and financial services provider, excelling in customer service.

“When we designed our vision we wanted to pass the car-park test,” says Beckman. “In other words, if I saw Billy Smith from one of our branches in the car park and said, ‘Hi Billy, what’s our vision?’ he’d be able to tell me word for word,”he says.

This was one method employed in achieving a highly engaged workforce and in just three years ASB bank was outperforming 90 per cent of all companies in Gallup’s worldwide database of employee engagement.

They continued to undertake this focus on engagement because it soon became apparent that engagement translates into profits. For four consecutive years, ASB Bank saw a 20 per cent increase in its operating surplus, and saw an increase in its assets of more than $7 billion over three years through the focus on customer and employee engagement

With their employee engagement levels safely tucked up in the 90th percentile of worldwide companies they decided to then examine the juncture where the employee meets the customer.

Linking employee to customer engagement

Starting in 2004 ASB began to focus on the point where employees meet customers.

Before this point, the method they used for assessment was in the form of a mystery shopper who would call to branches and measure customer service. However this only measured customer satisfaction prima facie and did not delve into the emotional engagement side of things.

“If you’ve got them at the highly engaged level, or at the emotional level, you’re in a different ballpark altogether and they are far more resilient to resisting the wooing by other providers,” says Beckman.

“Customers coming in and out of our business are expensive to us and hard to service. We want customers that are loyal and give their business to us for their lifetime. So we had to go one step further in measuring this,” he says.

The new method employed involved calling customers who had a transaction with the bank in the previous three days and asking them a list of questions around their experience, based on Gallup’s 11 engagement questions.

This involved finding out things such as: whether the customer has a relationship with a personal account manager, what they think about that relationship, how confident they were in the person serving them, the level of integrity they feel the bank has etc.

These are the basic satisfaction questions. However, to assess the emotional side of their engagement the questions moved to a new level, around things such as pride. One statement gauged with customers was: ‘ASB bank always treats me with respect. I feel proud to be an ASB bank customer.’

“You’re definitely getting a lot more feeling towards the organisation with this question and the truth about the relationship you have with your customer” says Barclay.

The final level of engagement assessment related to passion, with statements such as: ‘ASB bank is the perfect bank for people like me’ and ‘I can’t imagine a world without ASB bank.’

“If you’ve got your customers saying ‘absolutely’ to those, then they are truly emotionally engaged with your organisation,” says Barclay. “That has to be your goal if you’re looking to have lifetime relationships.”

And the key to achieving that, say Beckman and Barclay, is employees.

“Firstly a highly engaged employee is a far better quality employee because they are more committed and more productive and more likely to stay,” says Barclay. “And it was proved to us that highly engaged employees gave the customer a better experience and a more valuable one,” he says.

“Customer engagement is far bigger a beast to get right than staff engagement. But engaged staff is [winning] half the battle,” adds Beckman.

ASB accredits its outstanding success to three things. Barclay believes customer focus, engagement and accountability are where ASB stands out from their competitors.

“I would put customer focus as something we stand head and shoulders above our competitors on,” Barclay says.

“We have a more engaged workforce than our competitors and I don’t think we could deliver the customer promise if we didn’t. And our approach internally is one of a high degree of accountability. We keep our goals very simple, very specific and very measurable,” he says.

While things are going strong for ASB, they say they still have a way to go in achieving full customer emotional engagement.

“Our whole growth is to ensure that we have no one actively disengaged, that we have a smaller number who are, if you like, satisfied and the largest number of passionate advocates in our customer base,” Barclay says. “There’s our challenge. Come back in two years and see if we’ve achieved it.”