Improving the effectiveness of banks’ service guarantees: Communicating with customers

Once management is truly committed to a guarantee programme, an effective communication campaign ought to be designed. The goals of the campaign are first to create an awareness and an understanding of the programme among all customers and prospective customers. The awareness goal aims to create a general familiarity with the programme and continuously to remind customers of its availability. The understanding goal focuses on ensuring that customers are clear about all aspects of the guarantee. These include terms and conditions, how to ask for compensation, and pertinent qualifications (if any). Conveying the factual information and attaining a level of awareness and understanding, however, are only the first steps. To be truly successful, the campaign ought to set the appropriate emotional tone for the programme. Customers should be convinced that the bank is truly committed to reducing delays and will gladly compensate them when deficiencies occur. Customers ought to be made comfortable when asking for the guarantee. In addition to its more tangible purposes, the campaign must also contribute to the creation of the right atmosphere at the branch.

To attain these communication goals, a comprehensive approach is needed. It should include personal and impersonal tools, deployed inside and outside the branch. Brochures, mailings, signs, billboards, promotional items, advertising and electronic communication, are some of the impersonal devices that could be used. Branch personnel ought to help spread the word and explain the programme to customers. Employees’ verbal and nonĀ­verbal communication will set the tone for the campaign. Unless the employees are completely supportive of this effort, many customers will not feel comfortable exercising their rights and the likely result is that they will choose to avoid further delay in the branch and a potential confrontation by declining to invoke the guarantee.

The communication efforts ought to be frequent, clear and consistent. This ongoing campaign is of critical importance: to ensure that all customers are aware of the programme, fully understand the details, and feel comfortable asking for compensation when appropriate. Management ought to measure the attainment of these communication goals on a regular basis. Simply assuming that customers are aware of the programme and understand its details is insufficient.

 

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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