Giving Credit to Nordstrom Bank
Having covered the banking industry as a journalist for more than a decade, I can say with considerable authority that when it comes to the fundamentals of public relations, most U.S. bank executives have nothing in their tills. Given the choice between squeezing a customer with a dollar service charge or waiving the fee and earning some goodwill, most bankers would pocket the dollar and scoff at you for even thinking there was ever a question. Is it any wonder America’s banks are held in such low regard?
The banking industry’s public response to the current headline-making credit card legislation underscores how far America’s bankers truly are removed from reality. Public loathing of America’s banks has become so profound that even Congress can no longer acquiesce to the industry’s demands – despite the best efforts of a powerful lobby – hence the expected passage of legislation requiring credit card issuers to cease practices that are both unfair and unscrupulous. Rather than take the offensive and ostensibly embrace the inevitable legislation with campaigns touting “We Want to Help Restore America’s Economic Vitality”, the banking industry has effectively responded with “Paybacks are Hell.” Consumers, even those with unblemished credit histories, are told to expect new or higher annual fees, less affinity benefits, and a further tightening of available credit. Bankers just can’t help themselves.
The credit card business doesn’t have to be inherently anti-consumer. Nordstrom Bank, which is wholly owned by the retailer of the same name, is a case in point. I opened a credit card with them last year and have been impressed with how well it maintains Nordstrom’s vaunted reputation for exceptional customer service. Its approach is in stark contrast to those of the major card issuers with which I’d previously dealt.
Let’s start with its call centers. When I first called the 800-number to activate my card, I resigned myself to getting an automated response. Instead, a friendly representative who, it turned out, was incredibly knowledgeable about the card’s benefits, answered my call within 60 seconds and quickly helped me activate my card. Thinking it unlikely Nordstrom had built the call center capability from the ground up, I assumed she worked at an outsourcing company. The woman assured me she was a full-time employee of Nordstrom Bank.
As one who firmly believes that consumer-focused companies that truly care about the customer experience would never outsource the customer service function, I contacted Nordstrom CEO Blake Nordstrom to see if he shared my view. In a reply to my e-mail (how many other Fortune 500 CEOs respond to e-mails from ordinary customers?) he said:
We are one of only three retailers that I know of that still own their credit business. Everyone else has sold it and outsourced it. As merchants, we don’t profess to be bankers. We do feel strongly, though, that we work one on one with our customers and not have a third party in between to potentially jeopardize our relationship. We do have two call centers: one in Denver, the other in Southern California that are staffed 24/7 with Nordstrom employees.
Nordstrom Bank has further earned my admiration for its acts of graciousness. When I called the bank after realizing my first payment would not reach them by its due date, the phone rep waived the accrued late charge and interest penalty without any prompting from me. The bank also did not charge me a fee to make an electronic payment over the phone, an atypical practice that the rest of the industry will now have to adopt, as mandated in the current credit card bill. Since then, I’ve called the bank a number of times, and without exception I was speaking to a customer rep in less than a minute because once you are “in the system” you can simply hit zero and a real person comes on the line. Such respect for customers’ time and connectivity preferences, coupled with an affinity program that is honest and transparent, has earned them my appreciation and loyalty.
Interestingly, Nordstrom doesn’t have a slogan or even a logo, and it doesn’t spend a great deal of money on advertising buys, yet the company is one of the country’s best known retailers. Nordstrom preserves its enviable brand reputation the same way it established it: by giving shoppers impeccable service, great selection, competitive prices, and no-nonsense sales practices. And that’s what consumers want from their banks. Vernon Hill, the banking maverick who turned Commerce Bancorp into a retailing powerhouse in the mid-Atlantic region, was one of the few bankers who understood and embraced this reality.
Banks and the executives who lead them would do well to remember that the responsibility for reputation management does not begin nor end with the folks in the marketing and public relations department. It truly is a shared obligation that touches on every aspect of banking operations. Banks that fail to quickly grasp this fact will continue to find themselves a day late and more than a dollar short. They better heed this reality because they have no more political currency left to support yet another taxpayer-funded bailout.