Improving ‘Engagement’ with Tenured Business Banking Customers

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.

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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.

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Retail Banking Satisfaction at Record-High Level

Data from the first three fielding periods of J.D. Power’s 2014 Retail Banking Satisfaction Study finds that customer satisfaction is at its highest level since the study originated in 2007. This is consistent with data from other industry sources, which also identifies improvements across the customer experience.

The improvements in retail banking satisfaction also mirror trends in customer sentiment, as consumers continue to feel more positive about the economy and their personal financial outlook. Similar trends have previously been noted in J.D. Power’s Full-Service Investor Study, which also sees a relationship between economic prosperity and customer satisfaction.

The full publication of the 2014 Retail Banking Satisfaction Study, which will include aggregated data from all four fielding periods, releases on April 29th, 2014.

March 2014 Advisory Board Slidesv4

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The Impact of Fee Changes in Retail Banking

Strapped with a wide range of financial burdens, it is tempting for financial institutions to consider pricing changes in an attempt to improve bottom-line performance. However, any changes must be weighed carefully, and the potential business threats must be clearly understood.

Data from JD Power’s Retail Banking Satisfaction Study finds that Overall satisfaction declines significantly when fee changes are implemented, and more importantly, intended attrition levels are three times higher among customers that experience a fee change, compared to those whose fees remain stable.

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Pricing changes can also be costly to banks if not handled effectively, through the allocation of resources required to handle customer complaints related to the change. Nearly one third (32%) of customers that experience a fee change contact their bank with a problem and, on average, problems require 1.9 customer contacts to be resolved. Therefore, for every 100,000 retail banking customers that experience a fee change, bank personnel will receive 60,800 contacts. In comparison, for every 100,000 retail banking customers that do not experience a fee change, bank personnel will receive 19,000 contacts.

Estimating that bank representatives can handle 6.5 customer contacts per hour, and that their labor cost is $40 per hour, fee structure changes may result in an incremental labor cost of $257,231 for banks to absorb.

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Although data suggests that fee changes have a lagging effect on customer satisfaction (the full impact isn’t recognized until months after the change was made), intended attrition is impacted immediately, as customers tend to ‘overreact’ to a new charge. Therefore, it is particularly critical for financial institutions to minimize the initial bitterness experienced by customers, as this time period represents the greatest risk of attrition.

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Lastly, failing to ensure that all customers are fully aware of a fee change in advance can significantly impact customer satisfaction, loyalty and problem metrics. In order to successfully mitigate this problem, banks need to focus on over-communicating the change to ensure the message is fully received by their customer base

Financial institutions should begin the process of communicating fee changes immediately after the decision has been made. The appropriate messaging and delivery methods must be identified, and investing in quantitative or qualitative market research to aid in decisions should be considered. Lastly, the timeframe of the change must kept top-of-mind. Initial communications should begin months before implementation, and because the risk of customer attrition is highest within the first month after a pricing change, banks should place heavy focus on preparing all types of employees on how to handle any immediate backlash from customers.

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Maximizing the ROI of Credit Card Communications

Credit card issuers need to ensure that proactive outreach campaigns directed at current customers fit the evolving ‘digital world’. Failure to do so may not yield a positive return on the resource expenditures associated with customer communications.

Data from the 2013 Credit Card Satisfaction Study finds that nearly half (46%) of credit card customers did not read/use the most recent proactive communication they received from their issuer, thereby pointing to a potential ‘waste’ of resources spent by card issuers.

However, study findings show that the method used to deliver communications may have a positive impact on whether customers choose to read/use the information. For example, customers are most likely to read/use information provided electronically (emails and text messages), and are least likely to read/use information delivered by standard mail.

Issuers should consider revisions to their communication strategies, focusing on digital delivery of messages. This may also require issuers to rethink the content of their messaging and focus on delivering information in a more concise manner.

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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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A Few Post Halloween Banking Tips &Treats

In case you missed a few of our recent online events and complementary research reports, we’re including them for you here.  We promise, just like the day after 1/2 price Halloween candy, it’s not a trick. Just a heartfelt way for us to treat you, our loyal banking fiends and fans for your continued supportEnjoy!

What Do Small Business Owners Expect From Their Bank?

This exclusive webcast provides an inside look into the results of our J.D. Power and Associates 2012 US and Canadian Small Business Banking Satisfaction Study that will be released next week.  Below are only some of the many issues discussed during the webcast:

  • How customers’ perceptions have changed since 2011
  • The latest trends emerging in the small business banking industry
  • Which factors are having the biggest impact on customer satisfaction

Download the full webcast

The Dividends of Improving Best Practices for Social Media Research

In this whitepaper, we’ll show you that without well-established and proven guidelines on query construction and data extraction, very different results and conclusions can be obtained by different analysts attempting the same social media data search.

In extreme cases, analysts can create such highly divergent queries that the associated data leads to different answers to even simple questions, such as:

  • Which brand is my main competitor?
  • Is Product1 more of my brand’s conversation this month centered around product?
  • Is the sentiment expressed toward my brand this month more or less positive than the sentiment expressed toward my brand last month?

Download the full whitepaper

Using Voice of the Customer Information to Improve Business Performance: 5 Keys to Success

This presentation explores how clients use J.D. Power and Associates and other Voice of the Customer data with ROI or other business metrics to analyze under-performance to drive improvement.

Download the full presentation Continue reading ›

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3 Habits of High Ranking Customer Service Champions

We’d like to share with you a short video featuring elite companies recognized as J.D. Power 2012 Customer Service Champions.  They all describe their stories with one common theme, and that is the importance of assuring consistency across service channels.  In this video, you’ll hear from:

  • Chip Dufala, Erie Insurance – Executive Vice President, Services
  • Rob Hibbard, Enterprise Rent-A-Car – Vice President, Airport Business Development
  • Dick Evans, Frost Bank – Chairman and Chief Executive Officer
  • Kurt McNeil, Cadillac – Vice President of Sales and Service

As economic pressures increase and companies look for ways to improve their bottom line, many brands deploy technology to support the customer experience, as well as to lower overall costs.

Some of the technologies companies use to support the customer experience include automated phone systems and interactive voice response systems. These systems guide customers through standard sales or service processes and procedures to collect information from the customer in advance of a human interaction, while others replace human interaction altogether with a self-service framework.

So which type of support do customers prefer……….human or machine? 

Human! J.D. Power’s data collected between 2009 and 2011 indicates the customer experience with a customer service representative continues to have greater impact on overall satisfaction than does an automated system.

There are three practices that a company can employ to assure consistency across their service channels. These practices include:

  • Leveraging progressive technology
  • Customer empowerment
  • Maximizing live customer interaction
To learn more about assuring consistency across service channels as well as other key cross-industry best practices, download J.D. Power’s Beyond Satisfaction special report.

 

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Voice of the U.S. Retail Banking Customer

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

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Do You Love Me?

Top Drivers of Customer Satisfaction in the Call Center

Join J.D. Power’s resident Contact Center expert, Mark Miller, for a complimentary webinar where he’ll unveil the top drivers of customer satisfaction with the call center channel for 2012, and help us all take steps to show our customers how much we really love them.

Join us on Tuesday, March 27 at 2:00 pm Eastern (11amPT/NoonMT/1pmCT)

  • Understand what customers care about most
  • Learn why who you know is more important than what you know when it comes to providing an outstanding customer experience
  • Discover the three dynamics that will change, and are changing, the role of the call center forever and what to do to capitalize on this understanding

 Register Now

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