CBA Client retention

[Saint]

Good Evening

I was speaking to one of my 'contacts' at CBA earlier in the week, it would appear they have been losing a few billion in loans every year and they are looking to put a stop to it (this is a bit second hand information but should be pretty close to the mark).

This would be in cases, from what I understand, where you're getting 0.50% off the CBA variable and if you went to NAB, ANZ, St. George, Westpac, etc you'd see that most of them are offering 0.70% off their variable over "x" amount and so on.

So the question customers have (and rightly so) pops up in their customers minds, why isnt CBA giving me 0.70% when I could go across the street and get it.

So, CBA has set up a national retention unit to put a 'plug' in the refinancing of all loans (broker and thru the branch network). From what I understand, the unit has a massive delegation to retain the clients, and so far in the pilots has been retaining over 85%.

This obviously has a few ramificiations...
(1) The effect on finance placers/brokers - i.e. 'churning' clients & loss of further upfront commissions (for those who do)
(2) CBA will retain more of the 'trail' commission and lesser upfronts to these brokers
(3) Clients might be able to score themselves a better deal by a few well placed threats and newspaper ads
(4) CBA gets more market share - almost like the godfather (every time I try to get out, they keep pulling me back in!)
(5) Greater shareholder return... maybe
(6) etc

So, is it a question of the big getting bigger and starting to really 'hammer' the competition.

Any thoughts?

Cheerio

Saint.

 

[Rolf Latham]

Hiya

Dunno.

I do suspect they have one of the dodgiest books around :O).

If no one else will do it, take it to CBA.

They havent ever really been price leaders............they more survive on their logo and sheer size.

After having been in my black books I tried them for a year, and wrote some good volume biz..............alas, they are sooooo back in the bad books.

People that refi away from CBA usually dont do it for price in my opinion

ta
rolf

 

[Ricardo29]

throw back to public service mentality rolf ???

i dont know them, dont use them, and have nothing against the cba at all...
yet everytime i hear a bank bagged, cba is at the top.

i find similar with SGIO....big insurer, common insurer, popular insurer...but extremely difficult to deal with for those in the industry. we all blame it on public service government developed mentality...still prevalent somehow..even in new employees!!

 

[Rolf Latham]

Hiya

Having a background in business management consulting and having soent time with large and small companies and many a gov dept, the main issue is that the end user isnt at focus.

The task at hand is more important than the outcome, and its only where you get a person that cares about the outcome, that you can transcend the little silos.

Its not just CBA, but they are way ahead of most of the others.

CBA has a current campaign called

"Driving customer service excellence through sales and development",

where the main focus is on product awards and online applications, thereby speeding the process somewhat, with the bank still not realising that its the post approval process where the BIG holes are.

Their Self appointed Service levels are a national joke, yet they wont move to fix them. If you leave them to their devices, a good example is you send them a fax. The generally cant acknowledge they have recieved it for 24 to 48 hrs. Once they have acknowledged it their SLAS allow another 1 to 2 days to act on it, so almost a week has gone by b4 there is movement.

As a broker that likes to get outcomes, I like my clients and our joint sanity, and one who Im not love with bank process, I have once again had to put CBA on the Black list and wont use them anymore, until they see they have a problem.

ta
rolf

 

[Meisterin]

From what I am seeing and hearing, I can't agree with the brokers more. It's not the rates that's driving people away, but the service!!! And I hear horrid stories about CBA.

Unless you are in their Private Banking and have been assigned a good manager within that Private Banking Team, you are unlikely to get a good service. The good ones in the team seem to get promoted and have no client contact any longer.

One client of mine who went with CBA about 6 months ago, will never go with CBA again, even though he can get better rates, because of the service.

 

[shaunwalker1]

i just closed my bank account with cba.
it was very funny. i waited 20 minutes in line (i'm so used this i took a book with me) they then asked why.
i very politely told them about their service versus the fees i was paying for those (non) existant services.
teller just smiles and says ok.
closed account there and then. to tell you the truth i thought they were going to want something in writting to close the account (i took a pen and paper with me just in case they tried putting me off! )

cheers all

shaun

 

[Simon]

Most people I deal with seem to have a bank they prefer not to consider because of their previous experience or the experience of someone they hold close.

Funny thing is that the CBA seems to be the overwhelmingly least popular as measured by my little barometer of public feeling...

 

[Rolf Latham]

Suppose its like the fast food theory

The Golden Arches do very well even though most of their food can be bettered by the local little guy.

ta
rolf

 

[The Y-man]

We don't use the CBA for home loans, but we do use them for stockroking broking and margin loan.

I must say that we rarely have occasion to talk to anyone regarding the accounts, but in most cases, they have been sorted out ok. In most cases these are technical issues where we have been charged incorrect brokerages on split trades etc.

The fact that their local branch now is open until 2pm Saturday is a big bonus when face to face contact is necessary.

Cheers,

The Y-man

 

[Dazz]

We've had a fantastic run with the CBA and we are literally tied at the hip to them. They have been our best financial partner along the road to wealth.

All of our loans, all of our insurances, set up of our TST....the entire shebang is with the CBA.

We get treated exceptionally well, our Private Banker comes around and visits whenever we summon him. As for the rates, we are more than delighted with the discounts they offer, especially when compared with what the brokers can get for us....if indeed they ever get back to us.

We are X-colled up the wazoo and loving it. No downsides as yet.....

I imagine with a few customers in Oz, there must be a few who are happy with them.

All the way with the CBA.....

 

[Ecogirl]

CBA seem to be a mixed bag at the moment.

I had issues with one loan trying to get approval - they stuffed up but refused to escalate the deal to meet the timeframe. I was told it wasn't their problem....what the!

On another loan my client was the victim of identity fraud and had some defaults listed - one of the assessment officers went out of his way to keep the deal going forward and it was approved....yeah!

Many of my clients are getting out of CBA cos of the lack of service. I only do these loans when no one else will or if my client really wants them.

The only product i think they are competitive on is their investing LOC.

Cheers
Ecogirl

 

[Indifference]

I banked with CBA for almost 20yrs starting with a Dollarmite account as a kid. They proved to be no good once I grew up and really started needing banking services beyond somewhere to get my pay deposited.

I cut all ties with CBA a few years ago and I won't bank with them again. Unless of course, the planets align and extensive fundamental changes are made which I am confident will never happen.

I have used Westpac for a few years now and whilst they are definitely better than CBA, I have still had some serious issues.... They always recitify them once I bring them to their attention but sometimes I have had to really push to get things done. Some errors have been 5 figures so they are substantial.

I think I will be trying to find another financial institution in the near future

 

[Peter_Tersteeg]

At a recent professional development day, the CBA/Colonial state manager came to take about their great products and their excellence in customer service campain.

When he told us how good the customer service was, the room of about 100 brokers almost turned into a riot.

Personally I've never had a deal go 100% smoothly with CBA, despite consistantly being able to get it done with several other lenders. Their turn around times consistantly don't meet their own service commitment levels, I have to chase them constantly, I've even had to correct them on their own policies (what do you mean lo doc loans can't be used for owner occupiers?)

These days, even their rates aren't compeditive - they don't have a single rate or product that you can't get better elsewhere.

 

[Saint]

Interesting.....

From what I understand they are also going to be less apt to begin negotiating rates as to what is on the market due to they are going to bring in a client profitability matrix within the next year.

So, on one side you have the big giant bank who offers everything to everyone (almost...) and now they are going to be measuing how profitable a client is to see if they are 'worth' reducing rates/doing a bit of a deal to acquire the business.

My concern with their practice is that they are dictated by shareholder return rather than dealing with people on the personal side, which they are lacking on (evidently/apparently). The sad part is that the person I was speaking to and have dealt with for many years is preparing to resign along with a few others as they think that CBA management have lost the plot. So you must, in respects, feel sorry for the employees who have to work there as they cant control the beast and if they do they get threatened with breaches of bank policy.

Imagine, being a customer and told you are only "X" profitable, thus we arent going to go that extra step.

Truly a case where having the personal contact is a must to continue the dealings.

With money, one doesnt have time to stuff around with cultural change and new profitability matrix's, so I think it will be a case of my way or cba is on the highway.



Cheerio

Saint.

 

[Peter_Tersteeg]

Saint you have made some interesting points.

If you are trying to provide a personal and quality service it is very difficult to put a value on a specific customer. I did business with one young guy who bought a house. He was a great saver, had a huge deposit and thus only required a very small loan - not very lucrative, but it was an easy deal.

He then refered me to several friends and his immediate referals over the next three months were worth ten times the business I did directly with him.

I would never have though he would be the type to spruke my business, but doing a great job for him has paid huge dividends. His friends also give referals, it is now impossible for me to put an accurate value on this initial cleint.