Traditional Banks Losing Ground in the Battle for Customer Loyalty

The results of Market Force Information’s 2017 Customer Experiences and Competitive Benchmarks Study should serve as a call to action for banks across the country. Despite the best of intentions and millions of dollars invested for customer experience improvements, customer loyalty scores at traditional banks have declined across the board. And not surprisingly, the percentage of consumers who say they intend on switching banks in the next 6 months has edged up to 14% in 2017.  

The Current Situation:

Customer loyalty among the nation’s largest retail banks declined an average of 6.5% as measured by Market Force Information's Customer Loyalty Index (CLI) over the last year.   

This decline in customer loyalty is evident in the deterioration of the two underlying metrics that comprise the CLI: satisfaction with one’s primary bank and the likelihood for a consumer to recommend their primary bank to a friend or colleague. 

In 2016, 1 in 10 consumers were dissatisfied with their primary bank. In 2017, that figure has increased substantially to 1 in 5 consumers who now say they are dissatisfied with their primary bank. Similarly, in 2016, 1 in 5 consumers would not recommend their primary bank. In 2017, that figure has increased to 1 in 4 consumers who say they would not recommend their primary bank. 

Of course, we would intuitively assume that there is a direct relationship between a consumer’s level of satisfaction with their primary bank and the likelihood that they would recommend that bank to friends and colleagues. But what many are not aware of is the significance of that relationship.  

Market Force Information's data scientists have quantified the relationship between those two metrics and found that a customer who is delighted (i.e. gives their primary bank a 5 on a 5-point satisfaction scale) with their primary bank is 4.4 times more likely to recommend their primary bank than a customer who is merely satisfied (i.e. gives their primary bank a 4 on a 5-point scale).

What can be done to stop the decline?

To answer this question, banks must study the broader experience of consumers as they interact with non-traditional financial services and non-financial services providers (e.g., Apple, Amazon, Nordstrom, PayPal, Navy Federal Credit Union, USAA, Venmo, and Zelle). Not only are there lessons to be learned from these customer experience leaders, but opportunities for partnerships or acquisitions as well.       

Traditional banks must also take time out to thoroughly evaluate the state of their current customer experience program. In speaking with dozens of major banks across North America, I have observed that most banks have an abundance of data and enthusiasm paired with inconsistent or, in some cases, practically non-existent execution. A sign hanging in the office of the head of customer experience at one of the largest banks in North America said it best, “Data, data everywhere and not a thought to think.”

Despite the best of intentions and millions of dollars of investment in technology, many banks struggle with understanding and effectively communicating what’s most important, identifying which opportunities for improvement exist and isolating which opportunities will deliver the greatest ROI. Even fewer banks have done a good job of having a consistent, technology-enabled process of conducting insight-driven action planning and driving transparency and accountability for execution throughout the organization.

This lack of execution has not gone unnoticed by their customers. In fact, when asked about their primary bank’s performance on several key satisfaction drivers, a third of consumers said their primary bank did not perform any of them well. Had these banks performed well on all of the satisfaction drivers, they would have experienced a 90% lift in customer satisfaction according to advanced predictive modeling performed by Market Force’s industry leading analytics team.  

If the issues cited above sound all too familiar, Market Force can help. To find out more about how you can improve customer experience, loyalty, and financial performance, or simply learn more about the 2017 Customer Experiences and Competitive Benchmark Study, please schedule a briefing

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Chuck Rogers is the Financial Services Practice Leader for Market Force. By leveraging Market Force Information’s customer experience best practices framework, Chuck enables clients to improve their ability to attract, grow and retain customer revenue streams by providing a unique blend of customer experience thought leadership, research-based consulting and industry expertise.

Tags: Banking

Time to reconsider the Financial Services Customer Journey

According to Deloitte nearly three quarters (72%) of consumers still want to use their local branch to access financial services. This emphasizes the importance of the branch experience on customer loyalty—at least for now. However, our most recent competitive benchmark shows over one in ten banking customers are not satisfied with their relationship with their primary bank. This makes brands vulnerable to losing market share. Overall, 12% of all banking customers are considering switching banks in the next 6 months, with individual brands ranging from 10% to 19%. Our study also shows that many financial companies have a long way to go in order to create a positive encounter with most of their touchpoints. Look at the following:

  • 1 in 6 consumers are dissatisfied with their experience interacting with their bank’s call center
  • Nearly 1 in 5 customers had a recent problem; fees were the most common problem, followed by operations issues while inside the branch
  • Of those with a problem, 13% said it was not resolved, resulting in a net loss of 46% in overall satisfaction

The research also shows that the advisory experience clearly impacts customer loyalty. Consumers continue to visit their banks’ physical branches to speak with and advisor—and over two thirds were very satisfied with that interaction. However, although bank advisors execute well on the basics such as explaining products and services, they miss opportunities to build relationships by asking questions to understand consumers’ needs and following through on commitments. Most large scale financial institutions are investigating the customer journey and the impact each touchpoint has on customer satisfaction. They would do well to consider the following:

  1. Driving Satisfaction: To create true loyalty, and not simply complacency, banks need to deliver an excellent experience that makes it easy to do business with the bank and builds a sense of trust with consumers. This means focusing on consumers’ financial well-being with great advisory services and creating transparency regarding fees.
  2. Resolving problems is critical: Besides impacting overall satisfaction, unresolved problems lead to decreased recommendation rates. Very few disappointed consumers tell brands they were disappointed, and that leaves brands open to loss of wallet share and poor ratings in social media.
  3. Banking brands have opportunities to differentiate: Banking customers scored their primary banks low on concern with the customer’s financial well-being, understanding unique needs, and even community investment.

These are big undertakings and require a strong discipline to develop the right strategy when they begin the customer process. Consider the following when you embark on a customer journey strategy:

  • Do advisors ask the right questions to ascertain needs and make solid product recommendations?
  • Does your bank have the right processes in place to listen and respond if customers have issues—and is the response consistent across channels?
  • Are you listening to your customers across all of the relevant online, social, and conventional channels?
  • Are you aggregating and disseminating information in effective ways?
  • Do you have a clear picture of reality in terms of your ability to execute against your standards and training?

Market Force’s banking customer journey maps assess the channels customers use to engage with your bank. We will help you identify customer expectations and frustrations at every touchpoint—and show gaps in the overall omni-channel experience. If effectively designed, your customer journey mapping can create an effortless customer journey—and that will insulate you from customer defections and help you improve the number of products each customer wants to purchase from your bank. That’s a great ROI.

Contact our experts today to schedule a free 30 minute consultation that will help you determine whether it’s time to consider a customer journey strategy for your banking customers.

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Charles is a customer experience management expert with over 28 years experience. In that time, he has assisted more than 200 service related companies with their efforts to improve customer experience and loyalty. His education and training includes advanced graduate degrees in Statistics and Market Research Methodology.

Tags: Banking

Bridge Silos and Improve Loyalty through Customer Journey Mapping

Customer journey mapping has become very popular in the last two years with 62% of Fortune 1000 companies reporting that they have conducted or are considering conducting customer journey mapping, according to a 2015 survey by Accenture. Why is it so popular? Because businesses are realizing that their functional organization creates silos—and therefore barriers—to a great customer experience. Forrester Research notes: “Many CX initiatives don’t meet their full potential—or worse, fail completely—because companies don’t have a complete picture of what the customer experience actually entails and the complex dynamics that shape it.”

Three Touchpoint Models

Those dynamics are clearly illustrated when customers receive different experiences within the omni-channel. Consider the dilemma of one of our retail clients where pricing on the web site differs from pricing in stores. That difference creates confusion, undermines trust, and actually increases costs with more calls to the contact center.

Other clients have extended lifecycles with touchpoints that may cover years. In retail banking, touchpoints include not only the marketing touches to set expectations, but experiences with the teller, financial advisors, contact center, application development, and others who will at some point interact with the customer.

Finally, touchpoint models can assess what happens in a given location. Location-based services like cameras and beacons track entry and exit, dwell time, queuing, and other ways in which products, merchandise strategy, and service touch clients.

What to Expect From a Journey Map

Journey maps are created using both qualitative and quantitative research. It should accomplish five things:

  1. Clarify organization goals
  2. Expose root causes of CX problems
  3. Create “line of sight” across silos to understand how one department affects experience in another
  4. Identify and streamline gatekeeping functions
  5. Enlighten employees and partners about their crucial roles

    The goal? A seamless, exceptional customer experience across all touchpoints in your organization.

    For more information about Market Force’s capabilities in this area, please SCHEDULE A BRIEFING.

    Charles Cornwell is a customer experience and loyalty consultant for Market Force. Over the past 20 years he has assisted more than 200 service-related companies with their efforts to improve customer experience and loyalty. Charles' experience includes sales and consulting to Fortune 500 clients in multiple, diverse industries. His education and training includes advanced graduate degrees in Statistics and Market Research Methodology and work experience includes management of every aspect of complex research projects.

    Tags: Banking

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    To discuss your needs for improving performance for your multi-location brand, give us a call. We’d be happy to discuss best practices for measuring the customer experience and compliance to brand standards, using analytics to understand what matters most and the ROI for change, and technology solutions that integrate large quantities of data on one single platform. We look forward to a great discussion!

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