Overall customer satisfaction with retail banks improved significantly from 2012, largely a result of improvements made by big banks,(1) according to our J.D. Power and Associates 2013 U.S. Retail Banking Satisfaction StudySM released today.
“Many of the big banks have made great strides in listening to what their customers are asking for: reducing the number . . . Continue Reading Big Banks Make Big Gains in Customer Satisfaction
Best Banking Blogs of 2012
The Financial Brand, the premier online publication for bank and credit union marketers is conducting the second most important election this week; Best Banking Blog “2012 Readers’ Choice” awards.
Our J.D. Power and Associates Banking Blog, as part of having received the prestigious “Editor’s Choice” award, is now nominated for the “Reader’s Choice” . . . Continue Reading Will You Bank On Us?
As banks continue to explore ways to manage the sensitivity around charging fees while minimizing the impact associated with charging those fees, it’s important to focus on the following three areas:
The data from our 2012 U.S. Retail Banking Satisfaction Study shows that fee structure changes not only have a significant impact on customer satisfaction, but they also lead to an increase in problem incidence and intended attrition. The following are some best practices banks should consider when making changes to fee structures:
- When changes are necessary, focus on limiting the number of changes customers are forces to accept. For example, making two or three changes to fee structures per year may be more confusing and less satisfying than making multiple changes at one time.
- When fee changes are necessary, it is critical to communicate the changes well in advance so that customers are not caught by surprise.
- While communication of fees is mandatory, there are some other ways for financial institutions to help ensure customers are aware of changes—e.g., communicating changes more than once and preferably via multiple channels, such as mailed letter and online notification.
Source: J.D. Power and Associates 2012 U.S. Banking Satisfaction Study
The impact of communication on the fee experience goes far beyond simply providing advance notice of any changes to the fee structure. There are other best practices that banks can follow to provide their customers with more information regarding fees or information on other product pricing options available:
Account initiation: Starting with account initiation, it’s vital that representatives perform a detailed needs assessment and identify the products that meets customers’ needs. Performing a detailed needs assessment during account initiation provides a big lift in fee understanding (22 percentage point difference for “completely” identified needs) , while also providing a significant lift in satisfaction.
Online account information: It goes without saying that providing customers with clear and concise access to account information and other pertinent information via the bank’s website is crucial. Clarity of account information and Clarity of information provided on the website provide considerable lifts in Fees satisfaction, while also improving fee understanding by 16 percentage points.
Outbound communication: Proactively contacting customers three or four times per year regarding banking products and services enhances satisfaction and understanding of both fees and product offerings, without creating information overload. Study findings show that satisfaction and understanding both begin to decline when customers receive five or more proactive contacts per year. This also includes performing account reviews to ensure customers have the right products. Empowering branch tellers and call center representatives to proactively review customer accounts and make recommendations for alternative products and pricing options provides lifts in Fees satisfaction and understanding and significantly improves the bank’s Brand Image rating for being Customer driven. Continue reading ›
Our 2012 U.S. Retail Banking Satisfaction Study finds there are three likely outcomes that banks must contend with during the next few years, and all have direct implications regarding the customer experience.
1. Attrition will rise, loyalty will decline
The good news? There have been marked improvements in the measurement of customer retention, loyalty, and . . . Continue Reading Cracking The Code On 3 Major Customer Experience Trends In Retail Banking
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 . . . Continue Reading 3 Action Items to Bolster Satisfaction While Cutting Costs
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.
- 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.”
- 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 ›
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 . . . Continue Reading Voice of the U.S. Retail Banking Customer
Just like with couples, the relationship between retail banking customers and their financial institution is complex. As with any relationship, a healthy connection between two parties is one that develops over time and is typically based on mutual respect, trust, honesty and support.
Most of us know that it takes effort for healthy relationships to work! Whether we like it or not however, breakups do happen and in the case of bank customers, they get over them quickly and move on to another bank relationship.
The following are a few valuable insights about why retail bank customers may break up with you and how you can implement a few change initiatives to maintain a healthy connection with your customers….to avoid the bank break up.
Reason #1: Callous Communication – Problems become a customer’s biggest problem
Problem prevention needs to be a high priority for all financial institutions, given the incidence of problems (22% of customers¹ indicate experiencing a problem) and the significant impact that problem incidence has on overall customer satisfaction.
- Ensure customers understand fee structures, deal honestly with them and explain the fees right up front – it improves awareness of fees and minimizes complaints.
- Engage new customers during account initiation to identify their needs and sell them the products that meet those needs …..it lowers the incidence of future problems if they are happy from the start.
- Empower bank representatives (branch and call center) with the necessary authority, and provide proper training that will allow them to address any customer misunderstandings at the first point of contact. It will eliminate confusion for future problems.
 J.D. Power and Associates 2011 Retail Banking Satisfaction Study
Reason #2 – Unmet Needs – You’re not giving them enough of what they want Continue reading ›
This past weekend, I visited an actual bank branch for the first time in over 6 months. As part of the MTV generation (the late half of course), I witnessed the introduction of the home computer, the growth of the video game era, the boom of cable television and the construction of the information superhighway we refer to as the internet. Growing up on digital technology, it’s probably not a shocker that I prefer to do much if not all of my banking via online channels whenever possible or available.
So, it was a Saturday morning, and I needed to cash a check written on a large regional bank where I am currently not a customer. Finding a branch location was a synch, as this bank has a huge national footprint with a well-recognized and distinguished brand image. Convenience was definitely key for me, so I went with easy, and chose to visit the small branch close to my home. After all, I had passed it a thousand times on my way to somewhere else, but never had a reason to pop in.
As I entered the branch, nobody acknowledged my presence, but finding the teller line was easy……4 steps and I was already inside the roped off area waiting for a teller to motion to me that it was my turn to be assisted. In less than a minute, I got the combo hand signal and slight arm waive to “come on down”, and was greeting with a hearty “hello” by the teller. I told her I wanted to cash a check, and she promptly asked me for identification. As she processed my transaction, counted and double counted the cash she was about to hand me, I took a few moments to glance around the rest of the office to just soak up the atmosphere. I can’t help it. I’ve done thousands of retail bank and branch assessments over the years, so you could say that I’m almost conditioned to automatically make note of wait times, observe service behaviors of branch staff and read non-verbal cues of branch customers. In fact, according to the 2010 J.D. Power Retail Banking Satisfaction Study, the in-person customer experience is the largest contributing factor to Account Activity satisfaction in the entire Study!
Here’s what I observed:
- One customer was waiting to be helped on the platform while a CSR was training another CSR on the computer system. Did I mention that it was a Saturday? Did I mention that there was only one CSR on duty?
- There were no customers in line at the teller counter, yet there were 3 other tellers on duty chatting amongst themselves. Did I mention that they were chatting behind the teller counter right in front of the customer waiting to be helped on the platform?
The teller finished processing my transaction, handed back my ID with the cash and a receipt and said “thank you”.
Here’s what I wondered:
- Why didn’t the teller thank me by name or use my name at all during the transaction? After all, she had my ID, so she knew my name by now.
- Why didn’t the teller ask me if there was anything more she could assist me with? I was thinking the obvious, like why was I not already a bank customer or inquire if I would like to be. Why didn’t they want me as a customer? Did they already have too many?
- Why wasn’t I greeted by anyone when I entered the branch?
- Why was platform training being facilitated on a Saturday with no other platform staff present?
- Why was a customer waiting to be helped when almost all employees in the branch were visibly available?
Now, I know what you’re probably thinking……I’ve been conducting comprehensive branch assessments for over 15 years, so how could I possibly be unbiased in my branch observations? I’m trained to notice the subtleties of customer service and can help banks build and implement customer satisfaction programs in my sleep, so maybe my observations were exaggerated or just too critical? Well in this case, I was just an average bank customer processing a simple transaction on a Saturday morning. Continue reading ›