Financial Impact of Reducing Problems among Credit Card Customers

Problem prevention should be a focus area for all credit card issuers. Analysis of data from the 2013 Credit Card Satisfaction Study finds that when customers experience a problem, overall satisfaction and customer retention metrics decline significantly.

Preventing the occurrence of problems may also help reduce operational costs. For every 1-percentage-point reduction in problem incidence, issuers may be able to save nearly $230,000 for every 1 million cardholders.

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Issuers should consider the implementation of a problem tracking or problem management systems. Problem tracking provides continual analysis of problem-related customer contacts, potentially helping issuers identify and prioritize processes that can minimize the occurrence of problems. Problem management may include multiple inputs, such as problem contact data, survey data and employee feedback, and is designed to guide issuers on the development of systems to both prevent problems from occurring, and to maximize the effectiveness of resolving problems that do occur.

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Improving Satisfaction Among Credit Card Customers

opportunitiesAlthough credit card satisfaction continues to improve, a large percentage of customers indicate they do not fully understand their card’s terms, benefits and rewards program, according to our  J.D. Power 2013 U.S. Credit Card Satisfaction StudySM released today. 

Satisfaction in each factor has increased, as have ratings for Brand Image. However, it is important to note that opportunities for further improvements remain. Recommendations for additional focus areas for credit card issuers include:

Deepening customer awareness and understanding of terms, benefits, and rewards, potentially through proactive communication campaigns. Issuers should use consistent messages via all available channels to deepen understanding and awareness of offerings.

Continuing to invest in functionality of self-service interaction channels. Given the continued shift toward digital interaction channels, customers areconsistently looking for advancements in technology. Therefore, websites need to be maintained and upgraded as necessary to ensure easy navigation and availability of clear and concise information. Mobile apps are becoming more widely used; thus, the focus on improving functionality will become increasingly important going forward. Finally, clear processes for handling customer questions/requests submitted via email or online chat must be developed. Issuers must provide the same level of service courtesy and knowledge that is delivered through personal channels, such as the branch and call center.

Maintaining focus on delivering a high level of service during every interaction, given the importance of call center. Although customer contact via this channel is infrequent, every interaction carries a larger weight in overall satisfaction compared to the other interaction methods. Issuers must implement a customer experience framework that addresses customers’ needs and expectations by focusing on employee recruitment, training, coaching, and recognition in order to achieve the desired experience levels.

Preventing problems, as well as eliminating barriers for resolution. Analysis of problem data and determination of problem root causes may help banks adjust policies and procedures.

The 2013 Credit Card Satisfaction Study includes responses from more than 14,000 credit card customers and was fielded from May through June 2013
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Optimizing the ROI of Customer Satisfaction

Do you understand the connection between customer satisfaction and financial performance?

In case you missed our J.D. Power and Associates complimentary webcast last week, we examined how the links between customer experience and business results – and their drivers – vary by product.

We explored the revenue drivers in retail banking, credit card and mortgage, and revealed answers to some of the most frequently asked ROI questions like:

  • What is the impact of problem reduction on costs?
  • What are the biggest reasons for attrition, and what can you do to avoid it?
  • What is the relationship between satisfaction and switching?
  • What improvements in satisfaction will have the biggest impacts on share of wallet and retention?

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Poor Social Media Practices can Negatively Impact a Bank’s Bottom Line

dislikeBusinesses can no longer adopt a trial-and-error approach to social media as all-new research finds a link between social media and business metrics such as consumers’ likelihood to purchase or interact with companies through leading social channels, according to the J.D. Power and Associates 2013 Social Media Benchmark Study,SM released today.

The inaugural study is based on responses from more than 23,200 U.S. online consumers who have interacted with a company via the companies’ social media channel. Fielded from November to December 2012, the study measures the overall consumer experience in engaging with companies through their social platforms for both marketing and servicing needs across more than 100 U.S. brands in six industries: airline, auto, banking, credit card, telecom and utility. The study establishes performance benchmarks and industry best practices that provide insights to companies to help them maximize their social media efforts.

Social Media Servicing vs. Social Media Marketing

The study focuses on two types of social media engagements, marketing and servicing, and provides best practices for each. Marketing engagements include connecting with consumers to build brand awareness and affinity, in addition to promoting coupons and deals. Servicing engagements include answering specific consumer questions or resolving problems.

The study finds that social marketing engagements vary by age group. Nearly one-third (39%) of consumers 30-49 years old and 38 percent of those 50 years and older interact with a company in a social marketing engagement context, while only 23 percent of consumers who are 18-29 years old interact with companies. In contrast, 43 percent of consumers who are 18-29 years old use social media for servicing interactions, while 39 percent of consumers who are 30-49 years old use social for servicing needs. Only 18 percent of consumers who are 50 years and older interact with a company via social for a service-related need.

Key Findings

  • 67% of consumers have used a company’s social media site for servicing, compared with 33% for social marketing.
  • Younger consumers (18-29 years old) are more likely to use brands’ social media sites for servicing interactions (43%) than for marketing (23%).
  • The automotive industry balances marketing and servicing engagements better than any other industry included in the study.
  • Consumer expectations for social interactions vary across industries, although quality content and responsive service representatives are keys to higher satisfaction levels.
Want to learn more about our J.D. Power and Associates 2013 Social Media Benchmark Study,SM  including banking and credit card brand performance? 
Contact Karen Licker at karen_licker1@jdpa.com
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Credit Card Website Best Practices – Viewing Account History

From our J.D. Power and Associates 2012 Credit Card Website Evaulation Study, the following viewing account history best practices highlight some of the exceptional techniques utilized by credit card issuer websites.

1.  Recent Activity Link

Chase and Discover Card offer a link to recent activity from the website’s landing page

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2.  Offer Multiple Formats for Statements

Discover Card allows customers to download statements in multiple formats.  Citi Cards offers customers navigation links from the log in field on the home page

___________________________________________________ Continue reading ›

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Credit Card Website Best Practices – Account Log In

From our J.D. Power and Associates 2012 Credit Card Website Evaulation Study, the following account log in best practices highlight some of the exceptional techniques utilized by credit card issuer websites.

1.  Offer Prominent Log-in Fields

Citi Cards and Chase use color and shading to draw attention to log-in fields

 

 

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2.  Streamline Navigation

Citi Cards offers customers navigation links from the log in field on the home page

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Continue reading ›

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Credit Card Customer Website Expectations

The proportion of credit card customers who use online channels to perform basic tasks continues to increase, with those who use a smartphone or tablet preferring different experiences from those who use a computer, according to our J.D. Power and Associates 2012 Credit Card Website Evaluation StudySM (CCWES) released today.

The inaugural study examines the usefulness of credit card company websites across six attributes (in order of importance) utilized in our  J.D. Power and Associates 2012 U.S. Credit Card Satisfaction StudySM:

  • Speed of completing desired activity
  • Appearance of website
  • Ease of navigating the website
  • Ranges of service that can be performed online
  • Usefulness of information provided via the website
  • Clarity of information provided

During the past three years, credit card customers’ usage rates for self-service interaction (online and mobile) with their card issuer have increased, while usage rates of all other channels, such as mail and live and automated phone calls, have decreased.

Most notably, 78 percent of credit card customers use their computer to go online and interact with their issuer in 2012, compared with 76 percent in 2011 and 75 percent in 2010. Mobile phone usage has increased to 7 percent in 2012, compared with 4 percent in both 2011 and 2010.

 

 

Questions? For more information about this study, please contact Holly Zagresky at 248-680-6319 or Holly_Zagresky@jdpa.com.

 

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Credit Card Customers Happier With Fewer Changes

As appeared in The Financial Brand on September 11, 2012.  The Financial Brand, written and published by Jeffry Pilcher, is an online publication focusing on issues and advice that affect bank and credit union brands.

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Customers are happier now that credit card companies are making less changes to the ways their programs are structured.

Credit card customers say they are more satisfied this year, according to the US Credit Card Satisfaction Study from JD Power & Associates. The reason why? Nothing changed. Credit card companies have stopped tinkering with rates, fees and rewards programs, which has come as welcome relief to customers who have come to dread the onslaught of surprise changes.

(2012 J.D. Power and Associates U.S. Credit Card Custom Satisfaction Study©.  The McGraw-Hill Companies, Inc. All Rights Reserved.)

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Satisfaction With Social Media Interaction

Social media, a non-traditional method of customer interaction is clearly becoming increasingly important for banks to understand.

It’s no longer just a vehicle for customers to vent about poor experiences, praise their bank for exceeding expectations, or read about other customers’ positive or negative experiences—it has now become a legitimate service channel!

Social media sites not only allow customers to interact with their bank, but also provide another medium to converse with representatives, get questions answered, and resolve problems. For example, data from our 2012 J.D. Power and Associates US Credit Card Customer Satisfaction Study shows that during the past 12 months, 5% of credit card customers have contacted their issuer through their social media site to ask a question, resolve a problem, or make a request.

Although many questions or problems may need to be handled outside of the social media site that was the initial contact, it is important for banks to show they are listening to their customers’ “pain points” by providing an actual response to the social media posting.

Did you know that only 60% of customers who contacted their credit card issuer via social media received a reply?

Needles to say, the impact of replying to a posting on overall satisfaction is profound, as Interaction satisfaction among customers who have received a reply to their social media contact is notably higher than among those who did not receive a reply (802 vs. 748, respectively). Findings from our recent study also revealed that optimizing customer satisfaction with their social media experience does not end at merely responding to the request, but that issuers should continue to focus on the following:

  • Resolving the initial issue at hand
  • Offering additional assistance
  • Thanking the customer for their business

When each of these best practices are met, Interaction satisfaction increases to 839, which is 91 points higher than when they are not met.

Source: J.D. Power and Associates 2012 US Credit Card Satisfaction StudySM    

The Bottom Line:

With the continued advancement of technology shifting the way customers interact with financial institutions, it is vital for banks to proactively respond to the changing demands of their self-service channels and understand the importance of being responsive to feedback posted on social media sites.

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2012 Credit Card Website Evaluation Webcast

Do you know about our inaugural J.D. Power and Associates 2012 Credit Card Website Evaluation Study?  We’ll publish it on October 4th, and we’re excited to share some of the research details with you!

The websites of credit card issuers serve as a major portal for customers to service their accounts and obtain information throughout their relationship with the credit card company. This study provides an analysis of cardholders’ perceptions of their issuer’s website and explores the correlation between website usability and customer loyalty and advocacy.

We invite you to join us for a complimentary webcast during which attendees will learn how the insights gleaned from the study may help credit card issuers to:

  • Increase website effectiveness
  • Create websites that excel in content, appearance, navigation, and speed
  • Estimate return on investment for proposed site changes and enhancements
  • Compare competitive site features across multiple industries

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Complementary Webcast Details:

Date:  Tuesday, September 25 – 2:00 PM EST

For more information, please contact: Holly Zagresky at Holly_Zagresky@jdpa.com

 

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