In 1989, Midland Bank, a traditional British high street bank, with a history of low customer satisfaction scores, decided to launch a separately branded, phone-based operation. This was to be called “First Direct” and was the first phone banking operation of it’s kind in the UK.
Not only did this new venture look very different to it’s old bricks and mortar cousin, the new brand also behaved very differently. Significantly, one of the key criteria for frontline staff was that they had never worked in a bank before.
The launch was a great succes. By May 1991 the bank had 100,000 customers on its books. Not only that, these customers were also saying that they were much, much more satisfied with the service than they ever had been with their traditional banking experience.
By May 2001 First Direct, now with the highest customer satisfaction in the market, was gaining one third of all it’s new business through referrals, with customers recommending the service to friends, on average, once every 4 seconds.
This difference in satisfaction ratings was most evident in the use of ATMs.
Midland Bank customers continued to give low satisfaction scores for their ATMs – around 25% – while First Direct customers were giving satisfaction scores of up to 70%.
In other words, their attitudes to the two brands were having a significant, and measurable impact on their actual experience.
Even though the physical experience was exactly the same.