1 Engaging Reason to Like These Banks

It's happened to all of us. At one time or another we've been the victim of terrible customer service. They weren't just unhelpful, but dismissive, rude, and downright insulting. Gallup refers to these employees as the "actively disengaged", and they make up a shocking 24% of the global workforce. The survey suggested that their less hostile and slightly more helpful brethren, "not engaged", make up 63%.

The remaining 13% of the workforce are the game-changers, or the "engaged". They are psychologically committed and focused on contributing positively toward company goals. Recently, Gallup honored 36 "Companies That Set the Standard for Workplace Excellence.

There were only two American banks that made the cut: Wells Fargo (NYSE: WFC  ) and PNC Financial (NYSE: PNC  ) .

Why is this so important?
The impact of quality customer service can't be over stated. In Phil Rosenzweig's book, "The Halo Effect" he referenced a study that was done on call centers. The study found that customers whose problem was solved quickly, versus customers whose issue wasn't resolved, reported having an overall better feeling toward the company. This is referred to as the halo effect. A person's impression of part of a company can influence their feelings about the entire company.

This is where Wells Fargo and PNC could gain a huge advantage. While customer-facing employees have many duties, one of the most beneficial is cross-selling -- or selling more products to existing customers. According to Wells Fargo, "[This] is very important to our business model and key to our ability to grow revenue." PNC, similarly, suggested, "Our strategy involves competing on the basis of superior service... a key consideration in pursuing this approach is the cross-selling opportunity." 

It would seem, at least intuitively, a more "engaged" workforce would be more likely to pursue company goals such as cross-selling, and more likely to be successful. This has shown to be the case, at least, for Wells Fargo. While not every company releases its cross-sell data, Wells Fargo's six products per retail banking household is considered among the best. 

It's a little surprising
Wells Fargo is the top holding of legendary investor Warren Buffett. The bank showed incredible resiliency during the financial crisis. It's also popularized its now tag line, "Some questions take more than a bank, they take a banker." It's easy to believe that employees would take pride in working for a bank that's held in such esteem.

Source: wellsfargo.com.

I was, frankly, blown away to see PNC on this list. Not because it's a poorly run bank, but because it's been cutting back so many bank branches. In fact, according to SNL Financial, PNC lowered its branch count by 160 in 2013 alone. For some perspective, PNC ranked second among all U.S. banks behind Bank of America. You'd expect high reductions in headcount to have an impact on employee morale, but that certainly doesn't seem to be the case. Who knows, maybe it lifted spirits when employees found out it wasn't them being fired. 

The bottom line
Having great customer service and an engaged workforce isn't enough to warrant an investment. Though, it's often toward the top of my list, and one of the many reasons I believe in the future of Wells Fargo. 

What this study really did, however, was open my eyes toward PNC. It's a bank I haven't spent nearly enough time on, but with this type of praise, it's becoming hard to ignore.

Big banking's little $20.8 trillion secret
Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2895434, ~/Articles/ArticleHandler.aspx, 11/26/2014 12:57:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement