More Banks Saying 'Sorry for the Wait' with Cash; Good-Service Guarantees Seen Giving a Crucial Edge

Article excerpt

As bank competition intensifies, an old promotional tool-paying consumers for subpar service-is appearing more often and increasing in scope.

Milwaukee-based Firstar Corp., among the most aggressive users of payfor-delay programs, said last week that it will extend the concept to four more states-Wisconsin, Iowa, Minnesota, and Illinois.

The program-started by Cincinnati's Star Banc Corp., which bought Firstar last year and took its name-had been available only at Star's branches in Ohio, Indiana, Kentucky, and Tennessee.

"The only thing that distinguishes us from our competitors is our service," said Jay B. Williams, director of marketing at Firstar.

The bank pays $5 for delays at tellers' lines and a host of other inconveniences. These range from the unavailability of customer service representatives to inaccurate account statements. It even pays $5 if the bank fails to provide a same-day response to questions submitted before 3 p.m.

Though some bankers describe such programs as small gestures and dismiss them as arbitrary or gimmicky, many have found them an inexpensive way to stand out from the crowd.

Firstar has been paying out $16,000 to $20,000 a month to customers at 720 branches, said Steven W. Dale, a spokesman.

"It's something we're going to see more of, not less," predicted Janet Eissenstat, a spokeswoman for the American Bankers Association. "The industry is very competitive right now, especially on customer service."

The significance of the good-service guarantee policy lies more in its symbolism than in the amount of money paid, said Les Dinkin, a managing principal of NBW Consulting Group of Westport, Conn. By offering money, banks are stressing that good service is "more than a promise," he said.

M. Terry Turner, the president of retail banking at Nashville-based First American Corp., said the bank has gotten positive feedback from customers since it began giving $5 for teller line waits of more than five minutes.

But, he added, the bigger benefit is that it inspires employees. "It puts our company's commitment in front of everybody. …