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BA 105 WFW | Case Study 3: Gulf Coast Bank

Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah


CASE PROBLEM
To survive in an industry as competitive as the banking industry, companies must continue
innovating programs to ensure that they provide exceptional service to their customers. The
Gulf Coast Bank has put in place a service guarantee program that serves as a promise that
they can and will provide customers with superior service along with baseline bank features.
The objectives of the service guarantee program is to gain competitive advantage through
superior service. It also aims to set a new corporate culture to be the leader in service quality.
The program was designed to provide three specific guarantees: accuracy in checking and
savings account statements, personal commitment in home and auto loan applications, and
Gold service telephone line guarantees. Sarah Coleman, the banks service guarantee
manager, was the only member of the team behind the program to ask questions and have
doubts regarding the success of the program. Given that all the other banks are following the
trend of the service guarantee initiative, how can Sarah Coleman and the team assure the
success of their banks program?
ANALYSIS
In determining what actions to take for the improvement and successful implementation of the
service guarantee program, the following factors must be put into consideration:
a.

Evaluation of the current service guarantee program - The summary reports

show that $860 payout were incurred for 10 months in 300 branches. There must be a
criteria to determine whether the $860 payout is good or bad. An ideal criterion for this is a
cost-benefit analysis but the program doesnt employ a way to determine the benefit of this
program to compare with cost. This poses a problem because GCB leaders cannot
determine whether the program directly affects employees performance in a positive way.
b.
Establishment of a measurement system in rewarding performance - A reward
system will motivate and induce employees to perform well at work. However, GCB was
silent on how employees are compensated relative to the reduction/elimination of service
upsets and errors being committed. This could increase the likelihood of poor employee
response with regard to the implementation of the service guarantee program.
c.

Provision for adequate and timely feedbacks- A systematic evaluation of the

program is needed to determine the effectiveness of the plan on customer satisfaction, and
overall performance. The service guarantee manager has questions in her mind because of
the absence of monitoring procedures. The bank failed to employ a way to determine the
effects of the plan to the company performance and how to improve it.

BA 105 WFW | Case Study 3: Gulf Coast Bank


Bonnevie, Alexandra | Magalin, Ayesha | Nuruddin, Mardheeya | Pansar, Amenah
RECOMMENDATION
To address the issues aforementioned, we recommend that the team take the following courses
of action to ensure the success of Gulf Coast Banks service guarantee program:
(1) To maximize the benefits from the service guarantee program, the payout to customers
should be deducted from the salary of the employee involved. This will ensure that the
programs promises will be met because employees are further incentivised. Since they will bear
the cost of their own shortcomings, they are motivated to do even better and provide improved
service. In addition, this is also advantageous to the company because it will not carry the
burden of the payout.
(2) There must be a feedback mechanism/system to monitor the effectiveness of the program.
This will aid the development and advancement/improvement of customer service. The
feedback system should not only be customer-oriented but also internally-generated to gain
insights from both sides.
(3) The company can also redesign their incentive system so that bonuses will vary depending
on the marks an employee receives in customer-satisfaction surveys. Through this, not only will
the employees be able to monitor their capacities and abilities but also serve as a control
procedure to ensure that the employees get what they deserve. The employees are enticed to
fulfill their duties and responsibilities in excellence to get the most out of the program.
(4) In addition to bonuses, compensation should be given to employees with zero infractions.
The compensation can be in the form of stock option, cash or non-monetary recognition. This
benefits the company as a preventive control procedure. The employees would exert more effort
to avoid upsetting the customers because of the additional motivation and reward.
(5) The company should also offer payouts on other services such as remittance, bills payment,
opening an account, and loan application. By doing so, exemplary customer service will be
extended to the other several services of GCB which could lead to customer satisfaction.