Moving Beyond the Anecdotal: Measuring Lender Customer Service

There is clearly a consensus among financial aid administrators that customer service is a critical element in selecting lenders for their students.  In an environment of declining borrower benefits and sharp cutbacks in staffing at lender organizations, it has become even more important.  With HEOA requiring schools to provide additional clarity as to why EACH lender appears on a preferred lender list, I suspect more schools will implement an analytical approach to measuring customer service.  The secondary benefit of this analysis of customer service information is an improved feedback loop with lenders.

This post will seek to answer two fundamental questions:

• What exactly is customer service?
• How can it effectively be measured?

When asked to define what customer service is, many of us may want to turn to the words of Supreme Court Justice Potter Stewart's who said this about obscenity, "I know it when I see it."  With customer service, we might say "I know it when I experience it."  Long wait times, surly customer service representatives, a convoluted application process, and late disbursements qualify as poor customer service.  The opposite would seem to constitute good service: no wait times for customer service calls, knowledgeable and friendly customer service reps., a simple, straightforward application process and on-time disbursements.  Now that we know what good customer service looks like, how can it be measured?

One prevalent method to measure customer service is what I would call the "complaint log" approach.  This entails tracking every complaint that comes into the financial aid office from a borrower or from a financial aid team member.  Sharing this information with lenders on a consistent basis helps to ensure that systemic issues are caught early and resolved before becoming a major issue.  While this method is necessary, it is not sufficient in providing the full picture of a borrower's interactions with a lender. 

SLA recommends utilizing these five sources of information to get a complete, 360 degree view of customer service:

• Ask questions in the RFI.  Many schools choose to ask questions in the RFI to gather some operating statistics on the lender's customer service operations.  It is important when asking these questions to focus on peak periods (i.e. July - September) when service matters most.  Here are a sampling of questions that you might consider asking:
  
  • What is average wait time before borrower reaches a customer service representative (CSR)?
  • What is call abandonment rate?
  • What is average tenure of CSRs?
  • What is annual employee turnover rate?
  • Describe training program for CSRs.
  • What are the screenshots a borrower will go through during the on-line application process?
  • Describe results from your most recent customer survey.

• Rate customer service interactions.  Several schools indicated to us that they place calls into the lender customer service centers to measure the skills, helpfulness and depth of knowledge of the CSRs.  Since many borrowers need that one-to-one interaction during the application process, this method provides insights as to how your student borrowers will be treated. 

• Survey Student satisfaction levels.  Student borrowers can often provide the best insights into lender customer service, so do not forget to ask them their opinion.  Here are some guidelines for these surveys:
  • Conduct these surveys as soon after disbursement as possible so their experiences are still fresh
  • Focus on incoming students going through the borrowing process for the first time
  • Be sure that the survey allows student borrowers to describe service they received through variety of means, including self-service on the lender's website, call centers or email communication
  • Expect that you may need to provide an incentive to boost participation

• Review lender websites.  Students expect that they can complete many financial transactions on-line through a lender's website.  In addition, students expect that lender websites will have comprehensive information to help them understand the various loan products.  SLA has rated lender websites by asking lenders in the RFI to select from a checklist of all of the activities that a borrower can complete on their site (e.g., check loan status, download forbearance forms, make a payment, e-signature).  In addition, SLA independently rates the content on lender's websites based on its comprehensiveness. 

• Survey financial aid administrator satisfaction levels.  Surveying financial aid administrators (FAA) provides the last piece in the customer service puzzle.  FAAs can provide perspectives on loan processing, problem resolution and also service that borrowers receive from lenders (since the FAAs hear most of the complaints).   The service that lenders provide the financial aid office directly impacts students and therefore must be considered. 

Please let me know of any other innovative ideas you have about measuring lender customer service.   Over the next few weeks, look out for these SLA initiatives focused on customer service:

• Flash Survey on Measuring Customer Service Levels
• Student Satisfaction Survey Project
• Flash Survey on Lender Customer Service

Comments

[mystery shopping company]

I love to see universities focusing on service and customer experience for their students just as the typical hospitality or retail company must.