ABA Banking Journal
By Julie Knudson
Merging two organizations is rarely simple. Financial institutions face additional challenges as they work to support customers while also undergoing a host of internal transitions. It takes focus and careful planning to juggle excellent client service while transforming operations toward a stronger institution.Know the challenges that lie ahead
Presenting a consistent message to customers and employees while bringing together two separate and distinct cultures is an early obstacle banks may encounter. “Undoubtedly there is going to be a different approach to doing business on the part of the two financial institutions involved,” says Karen Partee, CFMP, SVP and chief marketing officer at Texas Bank and Trust in Longview.
Melding the best parts of each bank into one cohesive team takes time. “It’s not going to happen overnight, even in the best of circumstances,” Partee adds.
Employees within both organizations may be anxious about their own futures or worried that new workflows will hamper productivity. Showing customers a unified face, while dealing with this early uncertainty, can be particularly tricky.
Complicating the process is simple human impatience, which may be on full display as long periods of time stretch between the announcement of a merger and the actual system conversions that impact customers. “In an age where people expect instantaneous information, they want to know everything on day one,” says Alison van Harskamp, CFMP, SVP and brand communications group leader at Lititz, Pa.-based Susquehanna Bancshares, Inc., which was acquired by BB&T Corporation this year in one of the biggest bank deals since the financial crisis.
Unfortunately, many decisions that will ultimately touch customers—from how online logins will be impacted to whether their favorite teller will remain in the local branch—likely won’t be made right away.
“It may not be for months,” van Harskamp says. Managing customer expectations is made even more difficult when the benefits of the merger, such as improved ATM access or mobile services, haven’t yet been hammered out.
Because many decisions are on the horizon, the merging banks may not even be able to give employees the information they need to be comfortable with what the future will bring. Jamie Guise, SVP of community engagement at Evansville, Ind.-based Old National Bank, says there are several common questions employees are likely to have: “What does that mean for me? Am I going to have a job? If I do have a position, will it be the same position?”
Employees’ personal worries may pull their attention away from the merger process, making them less able to provide the kind of outstanding customer support the new organization wants to embody. “Recognize that there is going to be some focus inward,” Guise says.
What’s the worst that can happen?
The pitfalls banks must avoid anytime a merger or acquisition occurs are very real. “You’re always concerned about your brand,” Partee says. She sees customer retention, loyalty and brand integrity all potentially at stake if the existing relationships on both sides of the merger aren’t attended to throughout the process. Acquiring new customers takes far more resources than maintaining current ones, something banks must keep in mind any time they join with another institution. Partee warns that if customers “start to desert you during this time of transition, as a result of a perceived lack of concern or inadequate communication or failure to provide opportunities for feedback,” the bank could find itself starting over from square one in the customer acquisition process—an expensive and time-consuming proposition.
A poorly managed merger can wreak long-lasting harm on the organization. If customers think they’re being ignored or feel the merger is something happening to them rather than for them, they may take to Facebook or Twitter, for example, to voice their displeasure. “Then word gets around, and banks can feel the impact of that long after the merger is complete,” van Harskamp says. “It may even haunt them as they announce future mergers.”
Customers and employees can spot when a merger goes well and when it doesn’t. Especially in today’s social media environment, where word of mouth can be quickly and widely amplified, no one wants to be part of something that’s mishandled. Customers could choose to bank elsewhere and key employees may seek opportunities with a competing financial institution.
Managing customer expectations
Mergers aren’t set-it-and-forget-it affairs. Clients’ expectations and support needs evolve as the process moves forward. Banks must be ready to keep pace. Guise says there’s both art and science behind successfully anticipating and responding to customers’ needs. “If we communicate too soon, for example by telling customers their new account numbers before the bank has actually done the conversion, their money can get tied up,” she explains. Customers may order checks or change automatic withdrawal arrangements in advance of upcoming changes, prompting problems that could lead to frustration. To help clients make their own transitions at the right time, Guise suggests letting customers know that nothing will be changing in the near term and that you’ll keep them informed as each new phase begins.
“It is a cycle,” van Harskamp agrees. Her team has discovered that different customers have different expectations and concerns. Early announcements often go right past some clients. “It doesn’t even hit their radar,” she says.
Other account holders may have been through a bank merger before and know what to expect. A subset of customers will likely have questions immediately, but even those early concerns will probably die down once it becomes clear changes won’t actually be implemented for a while.
“When product and service guide mailings begin that talk about how current products will map over or outline new information for logging into online baking, that’s when people will start to focus on the merger,” van Harskamp says. At that point, it’s important to have information available for clients to peruse in their mailbox, inbox and on the bank’s website.
Minimize disruption
Examining the merger process from a holistic perspective can help minimize how changes will impact customers. “Taking the time to map out the customers’ journey throughout the process can uncover pitfalls,” van Harskamp explains. Different areas will likely have a small handful of changes each—online banking may require bookmarking a new URL, account management might entail a master identification number change—that individually don’t look like much.
“Each seems small because it’s one or two, but when you look across the horizon, it can really add up to a lot the customer has to deal with,” van Harskamp says. By identifying opportunities to modify back-end operations early in the process, the number of overall changes can often be minimized, keeping client satisfaction high and frustrations low.
Communication is the linchpin in maintaining strong customer engagement. Guise says her team worked with a consultant during a recent merger to analyze the changes customers were going to see and put together a strategy to ensure everyone had the information they needed. “We were able to create a tool where our frontline teams could put a client’s account number in and see all of the changes and impact areas that were going to be meaningful for them, and then be able to have a conversation about what the changes would be,” she explains. Whether it was helping customers move into a different product or ensuring they knew where they could find an ATM, the Old National Bank team was prepared “to have those conversations proactively, so clients weren’t surprised after the conversion happened.”
Making the best use out of all the media channels available to them, Partee says, is one early step her team uses to issue a letter from the Texas Bank and Trust’s leadership team welcoming new customers to the organization. “It’s an opening letter letting them know who we are, giving a little bit of our culture and our history,” she says. A list of FAQs and a conversion timeline are also provided soon after, so customers can get some of their initial concerns out of the way. Information is distributed by email, letter and on the bank’s website. And because customers are regularly overlooking messages in all of these locations, social media provides support by pointing customers back to these primary information sources through regular reminders. It’s part of the multi-prong approach banks should employ to bolster client satisfaction throughout the merger process.
Julie Knudson is a freelance writer in Washington, D.C.
