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Good old fashioned Customer Service - the mutual way

May 23, 2013

Claims of large lenders made real by mutuals

Everyone likes to claim they offer great customer service. Rare is the company that owns up to shoddy customer care.

This is just as true in the financial sector as anywhere else. Large lenders somehow muster a straight face as they promote their customer focus, ignoring freshly minted Libor-fixing fines in the process. 

Building societies and other mutuals are sometimes portrayed as rather old-fashioned organisations. And while it’s true that many cannot compete with the big banks in terms of TV, radio and newspaper advertising, they are coming up trumps when it comes to lending to first-time buyers, offering best buy savings accounts and, perhaps most importantly, providing good old-fashioned customer service.

Unlike their larger banking cousins though, building societies can actually substantiate these claims and are happily free from the embarrassing series of regulatory calamities plaguing their PLC brethren. 

According to the latest independent research (by GfK NOP*), they comprehensively beat their listed rivals across 11 different aspects of service. The research shows that more customers of mutuals agree that their provider delivers on service factors compared to bank customers, in particular on their provider being open and honest and also for feeling valued as a customer.

Teachers Building Society has built its business on providing an excellent level of service. It has been at the heart of what they do for many years. It’s no empty mouthed marketing speak though. They conduct their own customer surveys, asking every new customer to rate the service they received while opening a savings account or applying for a mortgage. In 2012, 96% of customers who responded rated their service as ‘good’ or ‘excellent’ and this has been a consistent achievement sustained across recent years, something the whole team at Teachers is very proud of.

Mutuals up and down the UK could easily report similar stories. A passion for delivering a truly personal service is what sets Teachers Building Society, and many other mutual organisations, apart. With no shareholders to satisfy, a building society is owned by its customers and tends to seek to narrow its margins in order to give customers a better deal. Mutuals also tend to be less keen on taking risks in order to achieve rapid growth. Perhaps if such an approach were adopted across the whole industry, we might have averted the financial crisis.

 

* Sources:       

1. ‘Mutuals:  better customer service’ research published by BSA August 2012
2. ‘Increase in mortgage lending by mutuals sustained in November’, BSA January 2013
3. ‘Building societies ahead of banks in best buy tables’, Savings Champion January 2013