I studied the behavior of bank customers for over seven years. COVID-19 crisis created an unexpected future for all of us. The customers of financial institutes are facing economic challenges, and they will need help with recovery planning. Good customer service is more important than ever. There is much uncertainty, which is adding to the anxiety and vulnerability customers are experiencing. I explain the causes of customer anxiety and vulnerability using my studies and data from other sources of consumer behavior.
The economic ambiguity created by COVID-19 led to many misunderstandings about consumer behavior. Think about the negative opinions bestowed upon families that were trying to plan household needs while experiencing social distancing. There is a misunderstanding around the act of toilet paper hoarding, which reveals circumstances not considered. Think about the Pre-COVID-19:
Social distancing created the need to plan out toilet paper usage. Mayonnaise is another sought after product that consumers could not get enough. Pre-COVID-19 lunches were purchased by people working out of home and students attending school. COVID-19 caught consumers off guard with no crisis planning.
Your customer service needs to take these realities into account.
In a COVID-19 world, there are continually changing circumstances. Most customers are not prepared for change. Adding to change of circumstances and vulnerability is unemployment. As of May 29, 2020, there are more than forty million people in the U.S. that are unemployed. (N.Y. Times, 2020). Many people were unprepared for this tremendous financial upheaval.
I wanted to understand coping during the COVID-19 crisis. I launched my survey from April 17-April 23, 2020, and gathered 383 responses from U.S. consumers. Respondents were asked about their financial outlook for the next six months. An 11-point scale was used so that they can indicate their feelings between poor and good. Fifty-one percent of the respondents felt their outlook is weak, and forty-nine percent felt good. They were asked to indicate their feeling about the overall economy six months from now, 70% felt less hopeful about the general economy.
In the PreCovid-19 world, consumers were ready to embark on higher purchases. In early 2019, the U.S. unemployment rate was 3.9%. At that time, I asked thousand U.S. consumers to identify their next big financial event, of which forty-three percent said they would buy a house or vehicle requiring a mortgage or auto loan. Consumers were beginning to feel secure about the economy. Even in these good times, customer service was something companies needed to improve.
The COVID-19 circumstances made life dire for everyone in the U.S. and the world. Social distancing and self-isolation measures put in place to protect each other from getting or giving the coronavirus.
In the COVID-19 coping study, there are many reasons that impacted 383 respondents’ ability to cope. The change to living circumstances had the most significant effect, such as adjusting to social distancing (66%) and modifying behaviors and habits (54%). There are many challenges respondents experienced in coping during the COVID-19 crisis. Forty-one percent of the respondents identified with having to accept the loss of physical connection, while twenty-nine percent acclimated to working from home, and twenty-eight percent transitioned to shopping online.
These impacts changed not only the number of interactions with customer service staff, but the critical nature of those connections. How does a company provide customer service when the customer is stressed?
Correlating findings from a recent poll conducted from May 12-17, 2020, two-thirds of Americans do not expect their daily lives to return to normal for at least six months. Three-quarters of those polled are concerned about the second wave of coronavirus cases. (Poll. 2020).
Vulnerability is a challenge to the recovery for the U.S. economy, which will take longer because of ambiguity about the future. Consumer Reports is tracking how consumers are faring during the pandemic. Survey results show that many Americans are delaying planned purchases or abandoning those plans altogether. Fifty-seven percent have delayed a large home improvement project, 18% have canceled it outright. Elective medical procedures — are being delayed by 70% for concerns of COVID-19. (Brancaccio. 2020).
The customer service functions of travel, hospitality, and even health care companies have been the “make or break” touch point for these consumers.
Banks should prepare for the shifts in behavior of Pre-COVID-19 customers who preferred location, convenience, availability of branches, low to no fees, and a safe place to keep their money. These needs were essential to delivering excellent customer service. Most importantly, banks will need to shift as a source of trust to help customers through these difficult times. Banks need to be the solutions instead of creating more anxiety for already overwhelmed and frightened customers.
I am pleased to be working with Frank Bria on a new study examining the behavior, attitudes, and sentiment of bank customers who are experiencing the challenges from the COVID-19 crisis. We’re studying how banks should react to changing customer sentiment to provide on-boarding, customer service, retention and loss mitigation strategies. In the coming weeks, Frank and I will share our findings.
Poll, Marist. (May 20, 2020). Americans Concerned about Second Coronavirus Wave… Nearly Two in Three Don’t Expect “Normalcy” Before, At Least, Six Months. NPR/PBS NewsHour/Marist Poll Results & Analysis.