chapter 17 - case study

Chapter 17 – Quality planning and control Short case – Calling Sue The idea of having a Personal Banking Consultant (PBC) seemed a great one at the time it was suggested. For a modest annual fee we would get a differentiated range of ‘relationship’ financial services designed for busy business people like us. These were listed in an attractive glossy ‘membership’ brochure and included a larger overdraft facility with preferential interest rates, free annual travel insurance, a rewards point scheme, a ‘gold’ credit card with no credit limit and our own PBC (Sue) and her personal assistant (Richard), who would be there to help whenever we needed them. Every other aspect would be as before, but our accounts would have to be transferred from our old branch in the south (where we lived until six years ago, but never bothered to move our accounts) to the north, where we now work. Having a remote bank branch had not been a problem until recently. If we needed anything done with any account, we simply had to ring the Assistant Manager in the south and he arranged it. But recently, a Southern West Region Office was established, and all phone calls were handled remotely, so it had become more difficult to maintain this personal relationship. Moreover, separate people at different offices, using different telephone numbers, handled our business and private accounts. We were ready for a change. Despite the attractions of the package described, we were hesitant to accept this generous offer. Changing all the cheque books, credit cards, standing orders, direct debit instructions and anything else we had forgotten, including our personal and business accounts, seemed rather complex and time consuming. We raised these concerns with the advisor who had been sent to sell us the idea, one dark December Monday. ‘Oh, there will be absolutely no problem ... we can deal with all that. All you and your wife will have to do today is to sign a few forms authorizing us to transfer the accounts, and one to agree to the new arrangements. Then leave the rest to us. There will be no problems, it’s easy with all the technology we have today. You should get the new cheque books within seven days, and all balances will be transferred automatically by the computer’. We signed up immediately – it looked a good scheme, and even the value of the free insurance alone would more than compensate for the annual membership fee. The four cheque books for the two accounts arrived separately, over a three-day period, the last arriving on the Tuesday, nine days after the agreement. The business account cheques had an incorrectly spelt business name, and the current account cheques had my wife’s initials reversed. At the same time, we received (from Sue) a personalized welcoming pack and a professionally presented loose-leaf folder of information concerning the account and PBC services, which confirmed that the accounts were in operation. All this correspondence was correctly addressed and written in a friendly style, using our first names. I decided to call Sue about the spelling. ‘I’m awfully sorry, sir, I’ll order some new ones, and I will ask them to send them to you quickly. I know they’ve had a backlog due to computer problems at the card centre, but they can prioritize any PBC’s cards. In the meantime, you can use your existing accounts, since they are linked to your new ones. I’ll call you to confirm when this has been done. Again, may I apologize for any inconvenience you have experienced.’ One hour later she rang as promised, confirming her actions. On the tenth day our credit cards arrived, correctly embossed with our names. However, these could not be used for cash withdrawals without personal identification numbers (PINs) and the cheques could not be used in UK retail outlets without cheque guarantee cards. The cheque guarantee card doubled as a cash card, for use at ATMs with another PIN number. Neither PIN number had arrived by the second Friday after our signing-up (11 days). I decided to call Sue, to see what was happening.

‘Don’t worry,’ she said, confidently, ‘The PINs always come a day or two after the cards, for security reasons, and you should get the guarantee cards about the same time.’ By the following Friday lunchtime, returning from a week’s business trip, we were getting concerned. Although our new cheque guarantee cards had arrived and were correct, our names on the envelope were again incorrect, which seemed odd and slightly disconcerting. We still had not received the new PIN numbers. I decided to call Sue, who apologized again, politely expressing her amazement at our dilemma, and asked me to hold while she checked the system. ‘They have certainly been correctly issued on Monday’, she said confidently, ‘and have been sent ... perhaps they have been lost in the post. I’ll check with the card centre what we should do, and I’ll call you back.’ ‘You will have to be quick,’ I retorted, ‘We’re just about to leave for a long weekend vacation, but you could call me on the mobile ...’ Sue phoned two hours later and confirmed that because the PIN numbers had been mislaid, it would be necessary to re-issue the cards for security reasons. ‘You should receive the replacement cards and PIN numbers within three days,’ she stated confidently. ‘You should carry on using your original account’s cards until then.’ Her suggestion seemed okay at the time, but proved to be rather more of a problem than we had anticipated. On checking out of the hotel on Monday evening, we discovered that the existing credit card had expired, and the bill came to more than our existing cheque guarantee card limit. We settled the account with a combination of cheques and most of our remaining cash – an embarrassing end to a pleasant weekend. In the post on Tuesday morning, we were surprised to receive two sets of PIN numbers, along with further cheque guarantee cards and credit cards. We went to the ATM with our new cards to draw out much needed cash, but the PINs were not accepted. Careful examination of the packaging revealed that the PINs related to the original cards, not the replacements! We borrowed cash from a friend and called Sue! By Friday, everything was working and we had received a correctly addressed letter of apology from the card-issuing centre in Glasgow. An excellent bouquet of flowers was delivered that afternoon and Sue phoned to check we were now happy. She even called in to see us a week later, bringing some leather holders for cards and cheque books. We have had no more problems and generally the service is excellent. Sue has, however, confided that such problems are quite common (they apparently use a lot of agency staff in the processing centres, and mistakes are common). But we can always call Sue. Questions 1 What were the gaps between the customers’ expectations and perceptions in the process described? 2 How were the customers’ expectations influenced from the outset? 3 What aspects of the bank’s service quality specification have been revealed to the customer? Are these reasonable for such an account? 4 Evaluate Sue’s reaction to the problems at every stage. Was the bank’s service recovery successful? 5 What costs have been created by these problems, and how do they compare with the underlying costs at the root cause of the problem?