Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on May 18, 2012, at 9:45 am
In 2011, 65% of adults used social networking sites, a dramatic increase from 29% just 5 years earlier. Additionally, 50% of adults actively used social media last year.* Growth is expected to increase in 2012, as Twitter adds 500,000 users per day on a worldwide basis.* Online discussions related to full service investors is heavily focused on advisors/brokers. Consumers discussing full service investor experiences online often reference “financial advisors,” “investments,” and “wealth management,” as illustrated in the following word cloud:*
Research conducted by our Consumer Insights and Strategy (CIS) Department, which provides social media analysis and reporting to understand consumer attitudes and behaviors relative to brands, products, services, and current topics, identifies the following key trends affecting the wealth management industry among full service investment firms. All of the following comments from online consumers were gathered by the CIS Department.
1. Trust is the most frequent theme in consumers’ online discussions.
Consumers often state that they trust their current advisor/broker. However, a lack of trust prompts many of them to look for a new advisor. New investors also ask advice from their peers when seeking a trustworthy advisor. Some financial advisors are viewed as promoting their own agenda, rather than looking out for their client’s best interests.
2. Social media has increased the transparency of advisor plans and service levels.
Investors typically share the advice they receive with others to seek validation for their financial plan. Investors also seek feedback from others as a second opinion. Continue reading ›
Posted By Michael Beird, Director of Banking Services Practice at J.D. Power and Associates, on May 15, 2012, at 9:31 am
With the Consumer Financial Protection Bureau expanding oversight beyond credit cards into other areas of financial services such as Mortgages, a reasonable question arises as to what bankers can do to keep the CFPB from becoming involved with a bank’s customers. The bureau represents an alternative to which over 9,000 consumers have already turned with complaints or problems, based on a co-presentation I gave with Marla Blow of the CFPB at last week’s Card Payments Forum. Ms. Blow described how the Bureau operates in expeditiously cataloguing, communicating and tracking problems in coordination with credit card issuers.
It is a laudable objective on behalf of cardholders, but what if anything can the issuers be doing themselves to avoid the involvement of the CFPB in the first place? In the work I did preparing the presentation for the Forum and the findings from J.D. Power’s 2011 Credit Card Satisfaction Study, issuers can and should do three things to help keep the regulators at the CFPB at bay when addressing cardholders’ complaints.
1. Educate customers to avoid problems in the first place
Customer education through transparent communication is one of the best ways to reduce a problem or complaint from arising in the first place! J.D. Power’s 2011 Card Study showed that both Transactors (who pay off balances each month) and Revolvers (those who carry balances) benefit from better understanding of their credit card terms. When these card holders completely understand their terms, only 8-9% report having had a problem or issue over the last 12 months. Compare that incidence rate to cardholders who do not understand their terms, where 12% of Transactors and a whopping 21% of Revolvers had problems when they lack understanding of their terms.
2. Empower frontline staff to enable First Contact Resolution
The ability to address and resolve customer issues at the initial point of contact goes great strides to satisfying customers and Continue reading ›
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on May 9, 2012, at 12:24 pm
J.D. Power and Associates is pleased to announce that Becky DeGeorge has joined the Financial Services Practice of J.D. Power and Associates as Senior Director, Customer Experience Management.
In this role, Becky will expand our capabilities to help our clients to:
Identify and prioritize improvement opportunities leveraging data from all customer touch points including on site observations and interviews, root cause, and business impact analysis;
Establish and implement highly targeted improvement initiatives designed to deliver specific business results, such as reduced attrition, improved share of wallet, or increased revenue;
Design, implement, and manage customer experience management systems that include comprehensive customer listening posts, training, coaching, scorecards, and incentives; and
Evaluate and strengthen client customer experience management infrastructure, to include management oversight, communication, and recognition programs.
Becky brings a wealth of experience in customer satisfaction improvement. Most recently, she established and managed the Customer Experience Office at U.S. Bank, leading the company’s efforts to improve customer satisfaction and loyalty.
Prior to joining U.S. Bank, Becky spent 11 years at Wachovia helping lead a transformation that resulted in the bank ranking highest in customer satisfaction among its large bank peers for seven consecutive years. She also has extensive experience, from Wachovia and other companies, in leading the development and implementation of consistent sales and sales management processes that result in increased sales and revenue.
We cannot be in the business of just pointing out customers’ problems. We need to help them solve them too! Becky and her team will bring unparalleled expertise to help our clients achieve their objectives in a more focused and robust way.
If you’re interested in scheudling a meeting with Becky, she can be reached directly at rebecca_degeorge@jdpa.com
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on May 3, 2012, at 6:05 am
The challenges confronting banks that seek to bolster their bottom-line profitability, retain customers, and stay competitive in the marketplace are formidable. Research conducted by J.D. Power‘s Consumer Insight and Strategies Group to track social media activity regarding banking issues between April 2011 and March 2012 finds that:
Online sentiment was distinctly negative not only regarding fees, but also for bank technology
Complaints associated with website or online issues were a major source of discontent in technology-related messages
With customer feedback on critical topics discussed online going from technology to fees and service, banks should see the handwriting on the wall and provide an appropriate outlet for these customers, along with an acknowledgement and guidance for direction for immediate response.
Source: 2012 J.D. Power U.S. Retail Banking Satisfaction Study
Retail Banks aren’t the only ones that have an opportunity to engage with the vocal online customer. Credit card holders appear to be even more outspoken onlinne, but card issuers appear to have learned this a bit faster than their Retail Banking peers. Continue reading ›
Posted By Michael Beird, Director of Banking Services Practice at J.D. Power and Associates, on April 24, 2012, at 8:37 pm
Bankers have entered the new “Post-Recession Reality” and reality is indeed setting in. In light of all the external pressures within the industry, bottomline profitability will be even more elusive to attain in the months and years ahead. Increased regulatory pressures, fee restrictions, diminutive margins, soft loan demand coupled with ongoing credit risks, and increasing customer attrition all combine to leave many banks with one remaining option for bolstering net profits: cost containment.
For bankers who were around in the late 1980s and early 1990s, waves of expense management, staff reductions and branch closures portend unhappy customers. But does that have to be the case? Findings from J.D. Power’s 2012 Retail Banking Satisfaction Study imply that with careful planning and ongoing measurement, customer mutiny does not have to be the foregone conclusion when trying to increase efficiency and profitability.
Bankers often focus on three common areas first when needing to achieve some quick hits for containing costs and they include reductions in:
Branch hours
Physical branches through closures and consolidations
Branch staff
Any one of these can clearly cause banks to lose many of their best customers while putting the bank at a competitive disadvantage for acquiring new households in local markets. So what steps can the bank take to mitigate dissatisfaction?
There are 3 action items that banks can focus on in advance of radical change
1. Provide customers at least one option for branch hours
Banks are often at a loss with figuring out what hours are most critical for satisfying customers. This is understandable because even in studies like the Retail Banking Study customer satisfaction is highest when customers are offered as many options as possible. But this is seldom cost effective or even realistic. So the question most often posed is: which alternative(s) are important to consider when expense reduction forces tough decisions?
The good news is that about two-thirds of customers report high levels of satisfaction when offered any one of three alternatives (ie, extended weekday hours, Saturdays or Sundays). The only option that only garners high satisfaction in a third of the customers is when there are no options available beyond standard banking hours. Which alternative is best, therefore, is a matter of specific market analysis, looking at both the needs of the customers and the hours offered by competitors. The least cost efficient strategy, therefore, is a blanket change, such as making all branches open on Saturdays. The effort to analyze local market needs is a time consuming but critical step in ensuring the bank both saves money and satisfies localized market needs and expectations.
2. Offset reductions in branches by ensuring remaining offices are superior
Branch convenience is a major driver of customer acquisition as well as a key cause of defection (J.D. Power and Associates 2012 Bank Customer Switching and Acquisition Study). As a result, any significant decline in the number of branches near a customer’s home or place of work can mean lost business. For customers citing two or less branches, satisfaction averages almost 40 index points lower than those who indicate three or more. However, banks that give customers compelling reasons to drive past those competitors’ branches to seek out the one or two remaining bank branches are rewarded. In addition to strong service delivery, the other elements that are critical to have in the surviving branches are:
Stellar branch appearance: This means clean interior and exterior, with good lighting and easy access making the branch feel safe and secure.
Non-standard hours: As described previously, this is at least one type of extended access, such as late night weekdays, Saturdays or Sundays.
ATM reliability: Customers are depending on ATMs more and more as next generation technology has incented more customers than ever before to use the machines for deposits as well as withdrawals and balances.
3. Balance impacts from staff reductions with personal touch
Reductions in workforce are a necessary fact of life for many banks, in light of the fact that staffing expense is the largest non-interest expense encountered by most banks. Cost containment strategies, therefore, seldom avoid the hard decisions associated with cutting staff or eliminating open requisitions. As a result, the main impact customers often experience from these actions is a longer lobby wait time. Since a longer queue is generally unavoidable with less staff, what can the bank do?
The answer lies in providing customers with a more personal experience when they enter the branch and interact with the remaining staff. When the customer is greeted or acknowledged upon arrival, along with key elements of interaction, satisfaction is actually 28 index points higher for customers who wait over six minutes than for customers with zero wait but who do not experience this level of high-touch service.
The key elements in addition to greeting include calling the customer by name, offering additional assistance and thanking them for their business. All very simple yet impactful actions.
By proactively planning before embarking on cost reduction tasks, bankers can actually realize what appears to be a quizzical paradox…how to actually raise customer satisfaction while reducing costs simultaneously!
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on April 19, 2012, at 7:42 am
Facilities and Routine Interactions Offset Decreasing Satisfaction with Fees
Highlights from our 2012 U.S. Retail Banking Satisfaction Study(SM)
Overall retail banking customer satisfaction has improved by one index point in 2012 to an average of 753 (on a 1,000-point scale) from 2011.
When looking at banks in aggregate by relative size, satisfaction with big banks is 743, a two-point increase from 2011, while satisfaction with midsized banks is up four points to 781. Regional banks experience a slight dip in overall satisfaction, to 759 from 760 in 2011.
“Big banks continue to lag the other banks in overall satisfaction, but they have made significant improvements in reducing the number of problems customers experience and in problem resolution, specifically resolving problems on first contact,” said Michael Beird, director of banking services at J.D. Power and Associates.
While consumers are growing increasingly dissatisfied with fees, banks are able to offset it with higher satisfaction in other areas, such as banking facilities, account activities and problem resolution.
Fees:
Satisfaction with fees has declined to 609, down significantly from 625 in 2011 and from 656 in 2010.
Monthly maintenance fees have the most significant negative impact on fees satisfaction this year—more so than in the 2011 and 2010 studies—while fees assessed for ATMs and debit cards have less negative impacts on fees satisfaction.
“The negative reaction to fees reflects customers’ irritation about paying for something they didn’t have to pay for in the past,” said Beird. “It also reflects a lack of their complete understanding about what they’re getting for those fees. Customers understand why they’re being charged for ATM and debit card use, but are not clear on what they’re getting for monthly maintenance fees, which drives the bigger drop in satisfaction with those fees.”
Banking Facilities:
Customer satisfaction with bank facilities—branch and ATM locations, appearance and hours of operation—has improved this year to 779, compared with 771 in 2011 and 765 in 2010.
One behavior helping increase satisfaction with the branch is that 76 percent of customers say they are greeted by a bank employee when they enter the bank, an increase from 68 percent in the 2010 study.
Customer satisfaction with the reliability and ease of using ATM machines has increased to 815 from 795 in 2011.
The study measures satisfaction among banks in 11 regions. Study results by region are: Continue reading ›
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on April 17, 2012, at 5:45 pm
In a recent New York Times special report titled Banks Slow to Embrace Social Media, the author Sonia Kolesnikov-Jessop notes that “while many consumer goods companies have embraced social media sites like Facebook, Twitter and YouTube as new avenues to reach customers, financial institutions, and especially private banks, have been reluctant.”
While the article’s main point may not be too far off from reality, Jeffry Pilcher of The Financial Brand has detailed a dozen examples of noteworthy YouTube videos uploaded by financial institutions in his latest post titled, Best Of Bank Marketing On YouTube. We were intrigued by the many creative uses of this social media channel, and thought you would be too! Below are his top pics including overviews and commentary:
Boys choir sings options for automated phone tree
DNB recruited Norway’s most famous choir, the Norwegian Broadcasting Boys Choir, to sing all of the messages for its automated, touch-tone telebank. For the entire Christmas season, every word on DNB’s phone banking system was sung by angelic voices. The concept is brilliant, the execution is beautiful.
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Deutsche Bank guerilla experiment mocks ridiculous fees
This gutsy guerilla stunt from Deutsche Bank aims right at consumers’ pain points: fees and charges specifically in the financial industry that many people feel are absurd. In one experiment, a small boutique bakery introduces a one euro “entry fee” — just for walking in the door. Those who pay are surprised to learn there is also a one euro “exit fee.” Deutsche filmed a second experiment at a supermarket, where patrons were charged for things like using the conveyor belt in the checkout line and printing a receipt. It’s over the top, but it makes the point. Spot 1 (Bakery) | Spot 2 (Supermarket)
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Mom gets massage and makeover from bank
This two-minute video from Sainsbury Bank starts out like a documentary about the life of a busy mother. She’s a hardworking woman, but clearly worn out from her dedication to her three young children. Sainsbury ambushes her with their Makeover Mobile, a spa on wheels. She’s a lovely person, so you feel really good for her at the end when she steps out looking beautiful. Her expressions of appreciation are subtle, but incredibly powerful; it’s very engaging. It’s rare to see banks capture such emotion in their marketing.
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on April 13, 2012, at 5:52 am
Next week, we’ll be releasing our 2012 U.S. Retail Banking Satisfaction Study (SM).
This study will explore why its a must for banks to understand their customers’ needs on both individual and regional levels, and identify what actions they should take in order to meet their customers’ expectations.
Get an insider’s look!
Join us for the 2012 U.S. Retail Banking Satisfaction Study post-publish webcast on Tuesday, April 24th at 2:00pm EST to learn:
How the industry did overall
Which banks performed best-in-class across the 11 geographical regions
Attendees will also gain insights into key findings from the study that address:
Approaches to managing costs without sacrificing customer satisfaction, loyalty or retention
Understanding drivers of attrition and why keeping, or losing customers is not just about fees
Improving revenues and satisfaction with a value proposition that is understood and meaningful to your customers
For more information regarding the J.D. Power and Associates 2012 U.S. Retail Banking Satisfaction Study, please contact Holly Zagresky at Holly_Zagresky@jdpa.com
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on April 10, 2012, at 12:25 pm
By Mark Zmarzly, VP of Financial Services at ACTON Marketing
In the previous post It’s Time to Change Your Social Media Story – Part 1 , I made a brilliant argument for the end of the Internet. Actually, I wrote about how Facebook’s timeline changes should give all financial institutions reason to reconsider their social media strategies, but I think you could read between the lines. The time for reinvention is here, as is the road map below.
If you have the guts (and resources) to reinvent your narrative, here are the things to think about as you redesign and redefine your story:
You are not the main character in your story…
Your story (updates, cover photos, apps, etc) needs to reflect your customers, not your bank
People identify with those like them (more accurately: with people slightly better than themselves), not with their bank
Who are the main characters in the stories below? Which story would you rather read?
Your voice needs to be authentic
Every time I see a scripted wall post that’s repeated over and over “Thank you for bringing this to our attention. Please contact us at customerservice@anybank.com so we can look into your issue and work with you to resolve it.” I want to jump right into my laptop screen onto the Information Super Highway and drive down to a town I like to call Shoot Myself. Yes, discussions about personal account level data need to be taken offline but this voice is your narrator and he/she is inauthentic and not engaging. Amber Farley from Financial Marketing Solutions adds, “Not only does the voice of the bank need to be authentic and relevant, but it needs to be reflective of the bank’s overall brand. Banks shouldn’t jump into social media pretending to be something they aren’t.”
Posted By Karen Licker, Social Banker & Content Contributor (Independent) at J.D. Power and Associates, on April 6, 2012, at 7:48 am
By Mark Zmarzly, VP of Financial Services at ACTON Marketing
Here’s something most of you don’t know about me: before I entered the financial services industry, I was an English teacher and fiction writer. Why you don’t know this about me can be chalked up to one of these reasons:
We have a virtual relationship only. (“What are two good-looking Gravatars like us doing on this banking discussion board? Let’s take this party over to MySpace.”)
You rarely call anymore just to talk.
This background information isn’t relevant to what I do on a daily basis.
If it’s due to the first two items, I’ll forgive you – though it wouldn’t kill you to pick up the phone once in awhile or at least post on my Facebook wall. If you didn’t know about my storytelling past, then that’s about to change.
It’s about to change because of a game-changing move that Facebook made over the weekend in what appears NOT to be an elaborate April Fool’s Day joke. Of course I’m referring to its change to timeline. Or simply put, the new way to “tell your story.”
Facebook’s change to timeline may seem like a simple process change at first glance. You’re no longer allowed to decide where your new prospects will land (welcome page redirection is gone unless you use URL app redirects); you’re limited (or barred depending on how you follow the rules) in your calls to action; and you’re no longer going to have the same fan reach you used to enjoy (unless you pay for it).
I asked Ron Shevlin for his input on the changes: “The restrictions that Facebook is placing on brands — e.g., limits on apps and tabs, throttling, pinning and starring limitations — will only make it harder for brand pages to systematically support user goals for using social media. These goals include finding information about interests, interacting with groups that share my interests, and socializing with friends and family.”
He’s right, and that means this story seems to suck for financial institutions. But, perhaps it’s an unexpected gift? I argue that these changes to Facebook have given you the perfect reason to examine (maybe for the first time), the story your Social Media efforts are telling about your bank. Upon examination, most FIs would benefit from ditching their current social media efforts and starting a new story.
This is because most stories that are being told by financial institutions’ social media channels are boring and fail at engaging storytelling. Facebook’s timeline change has given everyone the opportunity to start from zero. I’d go so far as to advocate you spin your social media efforts off from normal marketing activity, give them their own P&L Statement, and 18 months to turn a significant profit. But in this case I’ll meet you half way and say that you MUST take the following steps to evaluate how your old tactics (or brand and social media strategies if you have them clearly defined) fit into the new storytelling future.
Step 1:Examine your cast of characters.
Engaging characters are the heart of any good story. You know who’s not a good character? The Bank! Other characters that may be better choices for the lead: anyone else. Banks and bankers are not engaging characters, please realize that. But, your customers, the stories they can tell when given the chance, when given (God forbid) a product or service you have that helps them craft their stories, can be engaging. People want to engage with unique characters in the hopes that they will learn new things about themselves. Ask what can your financial institution, its products, and/or its customers teach people about themselves, about savings money, about life? Be bold with your questioning and subsequent character choices! See a great example here (thanks for the reminder on this on Jeffry Pilcher!):
Jeffry Pilcher adds, “this got them a lot of good, global exposure (e.g., name awareness). Hopefully “going viral” was their goal.”
Step 2:Establish a unique voice.
If the updates on your Facebook page, blog, or Twitter stream could appear on any bank’s page, then your voice isn’t unique, engaging, or worth your effort. People listen to stories told in voices that engage them on multiple levels. They want a guide that will pull them into a new world on an emotional level or, at a minimum, will tell them something that they’ve already seen except in a new voice, from a new point of view. Third person omniscient is a bold choice in fiction…but can be wonderful, haunting, and will stay with you for years (The short story Merry-Go-Sorry by Cary Holladay has been with me since 2004). Your choice of voice needs to be bold because not everyone is good at storytelling.
Step 3:Insure that your storytelling is visual.
Facebook’s new changes have given priority to visual elements over text. Long gone are the days when “What’s everyone doing this weekend?” or another “Currency Related Trivia Tuesday Question!” will gain you much notice. AND GOOD FOR FACEBOOK in that regard! I follow about 100 FIs on Facebook and am tired of feeling bad about our industry…bad for the employees who are struggling to find trivia bits to toss out randomly every week to their hundreds of bored fans.
Step 4:You have to tell a crappy story sometimes…before you can get to where you need to go.
As a former participant in entry level fiction, I’ve written a story or two that ended in the tragic suicide of the main character. This story ending is so overused by early fiction writers that many teachers now add, “Stories cannot end in a suicide” to the class syllabus. But those stories – however tragic to read as the teacher – are necessary in your development as a writer. You need to hit bottom, and kill someone, in order to learn. Without naming Facebook page names here, I’ll say that the vast majority of community FIs in America have hit bottom. The good thing is that there’s nowhere to go but up!
Step 5:Sometimes a crappy story is just a crappy story…and it needs to die.
Be prepared to kill your story. As a writer, I’ve walked away from many a story. Whether at page 1 or page 53, sometimes it’s best to just walk away from the entire story and let those characters live in suspended animation indefinitely. Now, you most likely can’t walk entirely away from your current social media efforts, but you can re-invent them based on the new changing landscape.
According to Jeffry Pilcher of TheFinancialBrand.com, “Most FIs have no clue what ‘their story’ is. And even if they thought they knew, it isn’t likely a story that is differentiated, engaging and/or credible.”
If you’re in that boat – which is admittedly a hard fact to face but would be just the revelation you need to evolve – then Facebook has given you a gift. This gift is a revolutionary change in the main staple of social media marketing that justifies a deep reassessment of the bones of your story, its characters, and the voice of your tale.
Look for Mark Zmarzly’s follow up post about the process you need to go through to reinvent your story.
About Mark Zmarzly:
Mark Zmarzly is VP of Financial Services at ACTON Marketing, and an accomplished marketing, business development, banking, and creative professional with demonstrated success solving customer acquisition, marketing, and profitability problems. He has worked with financial institutions from 1 branch up to 1,700+ branches in the areas of marketing, copywriting, account management, consulting, teaching, social media, and business development. You can find his insights on issues facing the financial industry at http://ihelpbanks.com/ and on Twitter @BankMarketing. You can also connect with him On LinkedIn at http://www.linkedin.com/in/markzmarzly.
J.D. Power and Associates is pleased to announce that Becky DeGeorge has joined the Financial Services Practice of J.D. Power and Associates as Senior Director, Customer Experience Management.
