Data from J.D. Power’s suite of syndicated financial services studies can help institutions benchmark website satisfaction against key peers and measure consistency across product lines, which is critical given the impact that websites have on overall customer satisfaction:
- Within retail banking, the website functions as a key transactional workhorse, with many customers using the channel to conduct day-to-day activities such as checking balances, paying bills and transferring funds.
- In the credit card experience, the website stands out as a primary method of checking balances and managing expenditures, while also acting as a key access point for reviewing and redeeming rewards.
- In mortgage servicing, the website can help reduce strain on contact center resources by providing customers with clear and concise information related to things like fee policies and escrow administration.
However, analysis of J.D. Power study data finds that many financial institutions are struggling to meet their customers’ needs and demands related to the website. Additionally, many institutions are not providing a consistently satisfying experience across their different product lines.
For example, as displayed in the chart below, ‘Brand C’ receives the second highest website score related to small business banking, but receives the lowest website score related to credit card. Conversely, ‘Brand B’ more consistently receives high scores across each of the product lines.
Things for Financial Institutions to Consider:
- Utilize independent research to benchmark your current website offerings (and associated satisfaction) across product lines, against peers and within different customer segments
- Regularly conduct reviews/audits of competitor website offerings (including companies outside of Financial Services) to understand the competitive landscape and potentially identify new ideas to incorporate
- Educate customers on the functionality of the website and associated benefits of using the website, particularly as new features are introduced
- Collect and analyze website-related data to identify strengths, weaknesses and opportunities for increasing website satisfaction
- Quantitative survey data can help provide an overall picture of website satisfaction, awareness and usage
- Biometric or eye-tracking analyses can help isolate specific aspects of the website experience that are most likely to grab the users attention and/or which aspects tend to result in confusion or frustration
- Independent web-evaluations include hiring an outside consultant to audit current website functionality/design/navigation/etc. and compare to competitive offerings
Data from the 2014 J.D. Power Small Business Banking Satisfaction Study finds that small businesses are feeling more positive about the financial outlook of their business and the American economy. However, there are significant differences when analyzing results by business size. As displayed in the chart below, small businesses with sales volume of $100k-$249k are less confident about their business outlook and the outlook for the American economy.
Study data also finds that businesses with sales volume of $100k-$249k are significantly less satisfied with the service they receive from their business banking institution. More specifically, these customers are less satisfied across multiple aspects of the business banking experience including Product Offerings, Fees, Credit Services and Problem Resolution.
Banks may have a tendency to overlook business clients of this size and focus on those with larger sales volumes. However, it is important to consider how the current level of dissatisfaction amongst small businesses with sales volume of $100k-$249k may impact bottom-line performance.
For starters, business banking customers that are dissatisfied with their current institution are more likely to attrit and initiate a relationship with a new business banking institution. Additionally, approximately 3/4ths of business customers with sales volume of $10ok-$249k also have personal banking accounts at their business banking institution. Therefore, by failing to satisfy the needs of business banking customers, banks are not only risking the loss of small business relationships, but also the personal relationships that small business customers may also have with the institution.
Data from the 2014 J.D. Power Small Business Banking Satisfaction Study finds that approximately one-third of small business banking customers also have a personal relationship with their primary business banking institution.
These types of ‘cross-functional’ relationships are beneficial for financial institutions. First and foremost, the institution is holding a greater overall ‘share-of-wallet’. Additionally, business banking customers with a personal account report significantly higher satisfaction, loyalty and advocacy metrics (compared to business customers who do NOT also have a personal relationship). However, analysis of study data finds that some banks are struggling to maximize the full ROI of a cross-functional relationship.
For example, as illustrated in the chart below, Bank A is currently not receiving the same positive ‘lift’ when their small business customers also hold personal banking accounts.
Additionally, study data finds that the ability for Bank A to cross-sell their small business customers on personal accounts is lagging peers.
There are many potential reasons why a small business owner is unwilling to hold personal accounts with their business banking institution, including but not limited to:
- Business institution may not be located near the customers home
- The customer has a long-standing relationship with their personal institution and is currently satisfied
- ‘Conflict of interest’ – some customers just want to separate their accounts
Regardless of the reason, the ability for the financial institution to provide excellent service and build trustworthy relationships is vital towards the goal of cross-selling business banking customers on personal accounts.
With channel usage continuing to evolve within the retail banking and small business banking industries, it is important for banks to focus on delivering a consistent experience across all customer touch-points. Customers interacting with the bank via the website or call center should receive the same level of high-quality service they receive at a branch, and vice versa. However, analysis of data collected by J.D. Power finds plenty of room for financial institutions to further improve the consistency of cross-channel interaction.
One key example is with regards to Problem Resolution. As displayed in the chart below, small business banking customers report considerable differences in their experience depending on the channel used for resolving a problem. While Problem Resolution satisfaction is highest when interacting with branch personnel (tellers, business bankers and managers), there is a steep decline when dealing with call center and online representatives.
Data in the chart above is from the 2014 J.D. Power Small Business Banking Satisfaction Study, but it is important to note that similar discrepancies in cross-channel interaction are evident in all financial services studies conducted by J.D. Power (retail banking, mortgage and investment). And these discrepancies are not always related to Problem Resolution, as many other aspects of the banking experience are also prone to cross-channel inconsistency, such as:
-Clarity of account information
-Method of accessing secure website (PC vs. tablet. vs. Smartphone)
As identified in the 2014 J.D. Power Small Business Banking Satisfaction Study, one key aspect of the small business banking experience is the relationship with an assigned account manager.
When an account manager is assigned to a small business client, building a strong relationship becomes vital. Ideally, the account manager becomes viewed as a ‘trusted advisor’, which can help the bank maximize the ROI (return-on-investment) of assigning account managers to small business clients. In addition to having a significant impact on customer satisfaction, account managers that are viewed as a ‘trusted advisor’ can also drive increased loyalty and deepen the share-of-wallet customers hold at the bank.
Furthermore, the negative impact of not being viewed a trusted advisor is profound, as satisfaction levels are actually lower than when no account manager is assigned at all (643 vs. 723, respectively, on a 1,000-point scale).
Data from the Small Business Satisfaction Study also identifies clear steps that small business account managers can take to develop a strong relationship with their clients and improve the perception of them as a trusted advisor, including:
-Take time to engage clients and understand their business
-Initiate contact with clients throughout the year to discussed needs and/or recommend solutions
-Promptly reply to any inquiries from clients and show ‘concern’ for their needs
The 2014 J.D. Power Small Business Banking Satisfaction Study was released on October 28th, 2014.
Data from J.D. Power’s 2013 Small Business Banking Satisfaction Study finds that Product Offerings satisfaction declines significantly as a customer’s tenure with the bank increases. Customer perception of product-related communication (or lack thereof) is a key driver of the satisfaction differences noted across different customer segments.
Analysis of customer verbatim comments may indicate that banks are more focused on communicating with newer business customers, in an attempt to ensure satisfaction and ultimately increase loyalty and cross-sell potential. Conversely, longer-tenured customers may feel ‘forgotten’ as the level (or quality) of communication received from their bank decreases over time.
It is important for financial institutions to stay in-touch with their business customers, particularly those with longer tenures, as those customers appear to be more critical of their bank’s attempts to communicate with them. And it is especially important to focus on engaging tenured business banking customers that DO NOT have an assigned account/relationship manager.
There was an article in American Banker last week titled “Big Ideas for Banks in 2014”, and one of the topics focused on the importance of retaining talented employees at bank branches. The article mentioned that high levels of employee turnover can hurt the ‘relationship’ between customers and the bank, which in turn can impact the bank’s ability to retain accounts.
This theme was also very evident in JD Power’s 2013 Small Business Banking Study (released in October 2013). Analysis of study data found that 43% of small business customers had their account manager changed during the past 12 months, and of those, 13% report that their account manager changed two or more times.The impact on satisfaction is significant, as shown in the chart below.
More importantly, turnover of small business account managers can also have a significant impact on financial performance. Study data clearly shows that small business customers who experience account manager turnover report lower levels of intended loyalty and share of wallet held with the institution. Turnover of account managers also drives an increase in reported problems, which can also be costly for financial institutions through the allocation of valuable resources and labor time associated with problem resolution.
But while an ideal scenario is for financial institutions to keep account manager assignments stable over time, in reality, changes will occur for a variety of reasons. In those cases, there are some best practices that financial institutions can follow that may mitigate the negative impact of account manager changes:
First, it is important that institutions act quickly when account management changes. Customers who are affected by a change should be notified as soon as possible and introduced to their new account manager. Delaying the notification can ultimately have a negative impact on customers’ overall banking experience, especially customers who attempt to contact their account manager and learn they are no longer there.
Second, it is critical that newly assigned account managers reach out to their customers and schedule a time to meet with them. During this meeting, it is important for the new account manager to establish an understanding of the customer’s needs and expectations (e.g., how often customers want to meet, what communication method customers prefer).
Third, new account managers must ensure they are providing the most appropriate solutions based on the customer’s business needs. They must be responsive to customer contacts, responding on the same day of the contact, if possible, and proactively reaching out to customers at least once every three months.
Original post by Banking.com Staff on December 4, 2012
In a recent blog on Banking.com, we explored how small businesses don’t always get the respect they deserve from the banking world. There’s no question that this sector of the economy is always vital, and increasingly optimistic. In fact, the number of businesses that report being ‘better off’ jumped from 16 percent in 2009 to 33 percent in 2012. This is also a market rich with possibility: on average, small businesses hold deposits four times greater and loan balances 15 times greater than retail banking customers.
And yet, this market continues to rank near the bottom in banking satisfaction. So what’s going on—and what can the industry do to make thing better? The new J.D. Power and Associates 2012 US Small Business Banking Satisfaction Study, a comprehensive research report that identifies and highlights the situation described above, digs deeper into the problems and identifies many of the pain points.
As mentioned in the previous blog, credit is still the primary issue, but it’s not the only one. The J.D Power study lays out more fundamental problems too. In particular, while small businesses are sometimes lumped in with retail banking, there are major differences between the two. Continue reading ›
Our J.D. Power and Associates 2012 U.S. Small Business Banking Satisfaction StudySM suggests that banks should focus on small business customers because of the value they represent, when compared to retail customers. On average, small businesses hold deposits four times greater and loan balances 15 times greater than retail banking customers.1 Small business customers also carry higher levels of personal banking business than the average consumer. In addition, the profit margins on small business customers are typically larger than those on larger corporate banking customers.
Yet, based on the results of the study, just released today, it appears that small businesses, like Rodney Dangerfield, get no respect. Despite overall satisfaction increasing by 19 index points year over year to 736 (on a 1,000-point scale) in this year’s study, it still represents one of the lowest-scoring financial services businesses that J.D. Power and Associates examines. Only mortgage servicing is lower. Even its perennial low-scoring counterpart, credit card, has surpassed small business banking in satisfaction to levels enjoyed in the retail banking sector.
Now in its seventh year, the study measures small business customer satisfaction with the overall banking experience by examining eight factors: product offerings; account manager; facility; account information; problem resolution; credit services; fees; and account activities.
The Small Stuff Matters
The study finds that when small business banking customers are greeted by name, the positive impact on overall satisfaction is 106 points. However, this occurs only 47 percent of the time, compared to 64 percent of the time among retail banking customers, representing a 17-percentage-point gap. This disparity occurs even though small business customers bank in person at the branch more than twice as often as retail customers (36 times vs. 16, respectively, on an annual basis). Continue reading ›