SunTrust executive Jeffrey VanDeVelde says improving customer loyalty requires focusing on customer happiness rather than satisfaction.
To the banking institutions that spend millions of dollars every year in the pursuit of satisfying customers, Jeffrey VanDeVelde has a bold statement to make – you’ve got it all wrong. VanDeVelde, director of client experience and loyalty at Atlanta-based SunTrust Banks Inc., says banks are asking the wrong question from the very beginning. “Consumers don’t want to be satisfied,” he says. “They want to be happy.”
Not that the pursuit of happiness is any easier to understand than trying to make customers feel satisfied. But it does require a different way of thinking. VanDeVelde says banks need to focus on helping customers feel better about themselves in a financial sense rather than feel positive about the bank itself. “Prosperous clients, if they feel confident about the economy and their future, tend to buy more, talk to others about us and have higher balances,” he says.
We recently interviewed VanDeVelde about how banks can operationalize this concept on the front lines to improve customer loyalty and, therefore, bank profits.
Q: In the article about customer happiness that you co-wrote with David Norton and Jeffrey Durgee, you stated that “consumers are no happier today than they were 50 years ago.” In your opinion, aside from the obvious current economic conditions, why are consumers stuck in this rut?
VanDeVelde: I think it is deeper than just a matter of current economic conditions. In fact the factors that create barriers to true happiness are ever-present. David (Norton) refers to this as the “hedonic treadmill,” the constant need to keep up with whatever’s current and new and anticipates the pace of society. But as you continue to run faster and faster and faster, you never actually catch anything and never feel as if you’ve arrived. Therefore happiness is not achieved.
And you can see it in every segment of society, everywhere. Generationally, everyone has their own treadmill. Every generation is always chasing something they never actually get. This perception is fed by the media and often advertising. One recent example is Coke and their “Open Happiness” campaign, which suggests that you can be happier when you open a can of Coke. But that just puts out another belief that happiness is achievable through consumption. It perpetuates the issue.
Q: Another interesting point you raised was that customers want to be “happy” rather than merely “satisfied.” What’s the difference between the two?
VanDeVelde: The easiest way, when you think about satisfaction, is by looking at the definition – the degree to which you’re meeting the expectations of a customer. That tends to be a functional need. In banking, are we doing what is expected of us? In reality, just “doing what is expected of us” doesn’t necessarily result in triggering some of the more valuable behaviors that banks, or any business for that matter, desire from their customer base. For example, just because I don’t make you wait in line for a long time doesn’t mean you’re any happier – you’re just less dissatisfied.
Unfortunately, as an industry, we often mistake client satisfaction with client loyalty or happiness. Banks have done a ton of work on drivers of dissatisfaction. Then, we implement these strategies to reduce dissatisfaction and wonder why clients are not any happier.
For years, we have designed ways to drive down wait time in a branch, for example. You think that if customers don’t have to wait in line a long time they will be satisfied. But that doesn’t make them happy. What makes them happy are emotional things they want to feel. What if I could take the two minutes spent waiting in line and help reduce the stress a client might feel about money? What if that was a good two minutes you could spend? What if a client was willing to spend five minutes in line as long as the outcome was to reduce stress? I need to design something to reduce the customer’s stress about money.
Some banks have done this. One bank I know uses a chip in your account so that they already know who you are when you walk into the branch and sign on to a pad that asks, “what is the reason for your visit today?” Now, the client has time to walk around the branch, read up on something about finance or talk with someone about budgets. Reducing stress is not just about reducing wait time. There’s a different way to design what an in-branch experience is like.
Q: One assumes that this is a difficult time to improve customer happiness or satisfaction, given the current economic conditions and residual anger at banks related to the financial crisis. How do you overcome that hurdle?
VanDeVelde: As I said before, creating happiness is always a difficult design challenge. To be honest, I don’t think banks should be promising happiness right now. You can’t make a promise like that – it would be considered disingenuous. I say start with a less emotionally-charged pursuit. Ensure trust first. Start with confidence and move up the ladder. The industry is in a state of lack of trust. In these times, promising happiness might be too lofty. Working to ensure trust is the emotion we should be pursuing now.
Q: Assuming that you can improve customer happiness or satisfaction, how does that then translate into improved profitability for the bank?
VanDeVelde: Let me be clear: my point of view is that the whole happiness movement is not about how we feel about a company, but instead how we feel about ourselves. Our role is to help clients feel happy about themselves. At SunTrust, we do that through focusing on our mission, which is to help people and institute prosperity. If we can help a client feel more prosperous, we believe that will be reflected in emotions and behaviors they then exhibit toward us. Prosperous clients, if they feel confident about the economy and their future, tend to buy more, talk to others about us, have higher balances, etc. We really are focusing on how clients feel about themselves.
Q: How do you measure your return on investment?
VanDeVelde: Again, we can look at whether customers tend to buy more, recommend us more and are less price-sensitive. In addition, with the advent of social media, they talk more positively about us in blogs and tweets. The days of “formal” referral are over. You really have to pay attention to what people are saying about you in these emerging social media forums. You hope by creating happy clients they will talk favorably about us in the social media. We are constantly monitoring how our clients are feeling about us and what they are saying. We use Co-Tweet, for example, and have a very strong social media arm to monitor traffic and dialogue.
Q: As you said earlier, making customers happy is a difficult concept. If we are, indeed, no happier than we were 50 years ago, is the pursuit of happiness a futile concept?
VanDeVelde: I don’t think it is. I think what we have lacked is a focus on happiness in our design of products, channels and experiences we are crafting for our clients. We talk about it, we’re intrigued by it. What are the drivers of happiness in a client’s life and what role does a bank have in this?
As an industry that’s been around forever, there’s still a lot of white space to pursue. At SunTrust we have a continuum we think through during our design efforts. First, we need to make sure we are reducing dissatisfaction where it exists. Next, we look at what the client expects from us so we can deliver satisfaction on their experiences. We then look at what drives loyalty and make sure we design those things into experiences we have with our clients.
Happiness is an even higher order of loyalty. It’s not a reflection of loyalty toward me, but how a client feels toward himself. We are just scratching the surface here.
Mr. English is a freelance writer based in Chicago.