By Meryl Kramer, Global Industry Consultant, NCR Corporation
Is it time for the ATM industry to rethink the way we measure ourselves?
Most ATM managers judge their effectiveness by measuring ATM availability, which is commonly defined as the percentage of time ATMs can dispense cash. It is strictly based upon the number of minutes an ATM was down and does not take into account the value of specific time periods of high usage versus low usage windows.
Given increasing emphasis by financial institutions on the consumer experience, should we really be using a metric that that provides little insight into how the consumer is affected? Instead, it may be time we measure ourselves against the impact of lost opportunities.
Although some banks report availability based upon tiers, they still assume ATM availability is equally important at all times. Of course, we know that this isn’t true. The availability of an ATM at the train station at 5:00 p.m. is much more important than the availability of the same ATM at 3:00 a.m. Additionally, all ATMs within a defined tier are not equally important, and need to take their location into account when measuring their value. Banks have also started to look at availability by time of day, or peak transaction times. This is a more granular metric, but it still does not get to the core of customer impact.
In order to truly measure the impact of lost opportunities, a more accurate measure would be to look at failed customer interactions. How many transactions are you not able to complete? How many negative customer experiences occurred at an ATM during the out-of-service duration? How did this impact your brand, and what was the impact on customer acquisition and retention costs?
According to a research study by Level Four, 28 percent of U.S. survey respondents stated that they would be very likely to switch banks if they experienced recurrent instances of ATM unavailability. The results are comparable to similar surveys from 2011 that found 38 percent of U.K. consumers and 70 percent of French consumers would consider swapping banks because of faulty ATMs. Failed customer interactions have a direct correlation to the “stickiness” of customers.
To highlight the difference in measurement conclusions between availability and failed customer interactions, consider the following scenarios: If you have a network that is available 98.5 percent of the time, but most outages occur at peak transaction times, there are serious customer satisfaction issues that are undetected and, consequently, not addressed. Conversely, if your network is at 90 percent availability, but at peak transaction times you are operating at more than 99 percent, then an erroneous conclusion could be drawn that serious performance issues need to be addressed if you look at only at overall availability. Resources will be expended at a greater proportion than necessary to drive improvements in network availability. However, those performance gains will be realized primarily during periods of little to no use by your customers, and – therefore – of little value to your business.
Once you’ve embraced the concept of failed customer interaction, you will find the insight to be a valuable tool in maximizing the investment in ATM technology as a customer loyalty and incremental revenue generation tool. It takes a team effort between your company resources and the vendors who support your environment. However, the results will be a more impactful and insightful approach than managing to total availability.
Read Part II: 10 Steps to changing your measurement