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6 CX Findings to Drive Your Bank and Credit
Union Strategy
Driver’s Manual 113
One of the industries which has been a particular focus of mine in market research is the financial sector. These marketing research projects with banks and credit unions include employee focus groups, B2C and B2B customer satisfaction surveys, mystery shopping, image and awareness surveys, CX channel research, and other ad hoc projects. Several key themes have emerged which have stood the test of time. A few are more actionable than others, but all carry significant impact on marketing and operational strategy for a financial institution.
6 CX Findings to Drive Your Bank and Credit Union Strategy
o 2) Live telephone and in-person experiences at banks and credit unions still carry significant weight on the overall customer experience (CX) and loyalty at banks and credit unions. As the number of in-person experiences drop in favor of mobile and online experiences, customers are significantly more likely to remember their most recent experience in which they engaged with a real life human being. For major issues, questions, and problems, many choose to call or stop by in-person in which the outcome can quadruple the impact of a single experience for the customer. Big issue solved? Happy. Big issue not solved? Maybe it’s enough to push them over the edge to switch to a competitor. With a limited amount of in-person exchanges, a bad experience is remembered for weeks or months before you have a chance to do it right the next time. Each and every interaction is critical.
o 1) Financial institutions experience very high barriers to switch among customers and members. A fair portion of customers are marginally satisfied with their current bank or credit union, but the pain points do not outweigh the effort required in switching accounts from one financial institution to another. As a result, many banks and credit unions are staffing employees and drafting paperwork specializing solely in helping customers switch accounts from one financial institution to another (checking, savings, auto loan, bill pay, etc.) It’s helpful to understand this and think of ways to assist competitors’ customers to join you. These switch liaisons are becoming popular.
o 3) Primary reasons for closing core deposit accounts at financial institutions are typically driven by factors outside of the financial institutions’ control. Factors such as “moving out of the area”, “account consolidation”, and “name changes” and “creation of joint accounts” are usually the top 3 reasons for account closures. A smaller percentage is driven by issues with the particular financial institution, confirming the strong barriers to switch referenced earlier. Continually collect data on why accounts close and trend this quarter-over-quarter, with a particular focus on understanding factors within your control.
o 4) A significant driver to loyalty at banks and credit unions is the ability of the financial institution to act as a financial advisor to the customer or member and anticipate needs before being asked. Customers want banks and credit unions to take next steps and suggest the types of accounts, investments, and services which should be used based on their unique needs. Many banks use segmentation analysis to determine common profiles of customers and potential services other like-customers utilize. It’s a data-driven approach to customized portfolio building. It focuses on building a long-term lifetime relationship with your members and customers keeping their best interests in-mind.
o (5) Location and convenience are the main drivers to choosing a primary financial institution (PFI.) The majority of PFI customers analyzed over the years stated the primary bank was within 5 miles of their home. For others who did not fit within the radius, many were within a similar radius to their place of employment. Although other factors certainly contribute to choice in PFI, location and convenience continue to be essential. Which is why when you see one bank, you typically see at least a handful more. If you are looking to expand and add a branch in a new location and there’s not a competitive branch nearby, there’s probably a reason. Use a feasibility study to analyze the market and predict your market penetration and share. Online banks have grown in usage over the years but something can be said for being able to enter, talk, and watch your money be deposited. Which leads to another core driver of PFI usage. Trust.
o 6) Many financial institutions have aggressively employed a social media strategy. An exemplary institution managing social engagement and conversation is Bank of America and its @BofA_Help twitter account. This team scours the internet for conversation regarding Bank of America and personally responds to each conversation instantly. Don’t believe us? Try it, I dare you. They answer questions immediately or if the question is outside of their ability to handle, will pass the customer next steps and contact information. All in 144 characters or less. Quick, brief, easy, and a great way to reach millennials. Building loyalty among younger age groups is key to long-term lifetime customers or members and this type of strategy puts your voice in a virtual space in which they engage on a daily basis. Social listening is an essential piece of marketing strategies. Continually challenge your financial institution and broaden your communication horizons to find new ways to communicate with (not to) your audiences. Listening to members on social, through VoC, and CX is authentic. Acting on feedback ensures your strategy is aligned with what your customers and members need.
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