J.D. Power and Associates “2011 U.S. Retail Bank New Account Study” finds that shopping and switching rates are increasing; main drivers are…
- Branch convenience
- Changes in life circumstances
Good news for institutions that are investing in providing a better customer experience and concerning for those that are playing catch up in this regard. It is evident that the larger banks are using Social Media to their advantage, and growing market share. Most Regional’s and smaller banks are not engaging in Social Media and are falling further behind the competition. With advertising being one of the main drivers of this study, one wonders when they will get onboard.
In 2011 8.7 percent of customers indicated they switched their primary banking institution during the past year to a new provider, according to the study, which examines the bank shopping and selection process, as well as customer satisfaction with the account initiation and on-boarding processes. This is a notable increase over the 7.7 percent of respondents who said the same in 2010. On average, customers in 2011 say they considered 1.9 banks while shopping — up from an average of 1.6 banks in 2010.
“The increased switching rate indicates more consumers are coming into the market, providing more opportunities for banks to acquire new customers,” said Clancy. “These customers appear to be more discriminating and diligent when selecting a new bank.”
The study indicates that banks that perform well in acquiring new customers tend to be aggressive in their advertising and promotions, and identified Chase, PNC Bank and SunTrust Bank as stand-outs in this regard.
“Customers who choose to stay with their current primary bank for additional products are most driven by positive past experience and perceptions that their bank is more focused on customers than on profits,” said Clancy. “Clearly, banks that are not providing a noticeably better experience are more likely to lose the business of indifferent customers who are more easily lured by the next attractive promotional offer to come along.”
What steps are you taking to ensure a positive experience for your customers?