Most people know that First Direct are the kings of service in retail banking. They’ve topped polls from CoolBrands to thisismoney.co.uk, from Moneywise to MoneySavingExpert.com. Even more impressive is that they beat the likes of John Lewis to win the Which? 2011 best customer service in Britain award. No mean feat for a bank. Contrast that with Santander who are consistently rated as one of the worst on the high street. More complaints than anyone else and horror stories over lost funds and ISA transfers. So how comes they gained a million customers last year? How comes we don’t all just up sticks and move to First Direct? Someone once told me that it’s easier to get divorced than change your bank account. I’m not sure if they were joking. I can’t vouch for the divorce but I do know I’ve been on the verge of changing the bank account I’ve had since leaving school but just couldn’t face the hassle of ensuring that all my direct debits transferred correctly. Years of poor service had conditioned me to expect something to go wrong. So I backed out.
Similarly, I’m pretty sure I could get a better deal on my gas and electricity but the effort to churn is just too great. This is such a big problem in the utility industry that the regulator even has a name for it – “sticky customers”. Sticky customers is one reason that the big 6 utilities serve 99% of the domestic gas and electricity market, making it very difficult for the newer entrants to get any market penetration despite their service being the best in the industry. Why would the utilities want to spend money improving the customer experience when they have a near captive audience? Why would they simplify their tariffs when it’s in their interest to make them as confusing as possible to prevent direct comparison? Why when one reduces their prices do the others follow? Not surprising that most of us don’t trust them.
Of course there are number of considerations to take into account at the time of purchase or churn. Price, choice, performance, brand, aspiration and barriers to churn for example. What about service? Is it really a consideration? Have we become so immune to poor service that it’s no longer a consideration in the buying process? I can’t believe that. Is it really that difficult to move or is the perceived difficulty creating this inertia. I can remember when it was impossible to switch mobile networks and retain the same number. Number portability regulations from Ofcom resolved that and now people move freely from one network to the other chasing the best deal. But do they chase the best service?
What do you think?