Serving a Few Cookies Can Accomplish a Lot

February 16, 2009

Toward the end of a long department meeting today, my supervisor mentioned, almost in passing, that our campus wants us to start thinking about what businesses refer to as intangible perks in the in the area of customer service.

Intangible perks are the little things that businesses and their employees do to make customers feel welcome and appreciated.

Of course, intangible perks are no substitute for price and quality. People always want a good deal for their money and people will also almost always patronize the establishment with the lowest price for the same quality.

However, when there is little difference in the quality and price between stores, little extras are needed to help draw customers away from competitors.

Intangible perks can also be tailored toward specific customer segments and enable a seller to target and draw in a large portion of an identifiable part of the market. Of course the seller has to be able to know and identify different groups of consumers as well as know what will attract them.

Finally, one of the really great things about intangible perks is the fact that they usually cost very little to provide and can even cost nothing to provide. Simply getting sales people to smile and greet customers with a friendly Hello when they enter can often do wonders for a business.

I will never forget a marketing course I took from the Savings and Loan trade association's Institute of Financial Education early in my career working for a savings and loan association.

I worked for the third largest savings and loan in the state of Wisconsin at the time. We had some twenty or thirty branches scattered throughout the state and were a leader in embracing the latest improvements in the industry at the time.

Things like ATM (Automatic Teller Machines), automatic electronic deposit of Social Security, Pension and paychecks, automatic electronic bill payments from checking or savings accounts. These are standard today but they were the latest innovations in the financial industry at that time.

The instructor for the marketing course was the marketing manager of a single office, neighborhood savings and loan. Just one of our larger branch offices was bigger, in terms of both physical building size and customer deposit base, than the entire company he worked for.

He and I came from two different ends of the industry and I immediately assumed that there was nothing for me to learn from him. But I was wrong as I ended up learning, among other things, a very valuable lesson in customer service.

The Automatic Clearing House (ACH) system had been launched a couple of years before. Among the benefits of this system was the ability to automatically transfer money electronically from accounts in one place to accounts in distant locations.

The U.S. government embraced this system immediately as it allowed them the potential to automatically deposit monthly Social Security and military pension payments into recepients' checking or savings account without having to go to the expense of printing and mailing millions of individual checks.

My collegues and I, who already enjoyed the benefit of having our paychecks automatically deposited to our checking accounts, thereby avoiding having to make a trip to the bank on our lunch hour or after work and wait in line to deposit them thought this system was a great service.

We assumed everyone else would feel the same way once this benefit was made available to them.

Many people, including retirees receiving Social Security and/or military pension checks, liked the convenience and signed up immediately. However, like any major change, people were given the choice of having the electronic deposit or of continuing to receive paper checks.

However, the marketing class instructor, who liked and used the electronic deposit service himself, told how very few of his association's customers signed up for the service despite a massive advertising campaign.

He had assumed that, like those of us working in the industry, the customers would like the convenience. After all, his association, like ours got their share of complaints about the long lines at the teller windows during the first of each month when Social Security checks arrived.

Unlike the savings and loan where I worked, which was spread throughout the state and had a diverse customer base, the savings and loan where he worked only drew from the surrounding area and that area was composed of mostly retired factory workers.

The people in his market area had worked hard all of their lives and looked forward to retirement, not as a time to hit the road and travel like many of the retirees who banked with the place where I worked, but as a time to enjoy staying home to work in their garden, perform maintenance on the house and play with the grandchildren.

While they complained about the lines at the teller window, they actually looked forward to getting their Social Security check and going to the bank because, as the instructor and his team learned, much as they liked retirement they also enjoyed this opportunity to rejoin the routine of the work world where they went to the bank to do their business.

They also secretly enjoyed the wait in the long lines as it not only gave them the opportunity to chat with old friends/co-workers whom they hadn't seen for the past month, but also provided a topic of conversation - complaining about having to stand in line!

Armed with this knowledge the savings and loan stopped advertising the electronic deposit service that their customers didn't want anyway, hired a couple of extra part-time tellers for the beginning of the month and set up a table where they served free coffee and cookies at the beginning of each month.

The move was a smashing success in that they not only saved advertising dollars but nearly doubled their customer base simply by spending a few dollars a month of coffee and cookies.

Their customers loved the opportunity to come in and engage in the business of cashing their check each month while munching on cookies and coffee all the while chatting with friends and complaining to each other about having to stand in the now even longer teller lines.