Market Watch issued a press release earlier today about studies done by Intellishop and Rate Watch citing credit unions and small community banks missing their market share of banking business due to sales efforts. The mystery audit services sent 120 anonymous auditors out who posed as new checking account prospects, and even though small banks were seen as pleasant, the criticism of having a too “laid back” approach regarding selling the benefits of their bank were losing these organizations business. It seems larger banks are more proactive.
Mystery shopper results documented large banks to be four times more apt to find out about other types of banking relationships, two times more likely to ask a new customer to sign up today, two times more likely to collect a prospect’s contact information, and two times more likely than the smaller competition to strike up small talk conversations as someone enters the bank to engage a new customer at a personal level.
Now this is where surveys commonly get confusing. J.D. Power and Associates just released their survey which may or may not parallel big banks versus smaller institutions signing up new business practices, but a 5,000 customer survey results found a deflection rate of one in ten customers leaving large institutions last year because of high fees and lousy customer service. Surprisingly small banks and credit unions only lost 0.9 percent of customers compared to 8.8 percent of customers lost in 2010.
So if we are to assume more customers are attracted to bigger banks because personnel is better trained to concentrate on the positive attributes of larger banks and use more initiatives to attract customers, then we might also assume those very customers are leaving big banks at an even higher rate? Of course, there is always more to consider.
I doubt many customers have forgotten the Bank of America announcement of charging a monthly fee for debit card users last year. The firestorm took off in the media full force ahead, and the “Bank Transfer Day” when customers emailed, tweeted, and blogged everyone to leave big banks and switch to smaller banks and credit unions left quite an impression. Already adding to the malcontent of big bank customers, newer and higher banking fees from checking account charges to higher credit card interest rates compared to piddly rates on Certificates of Deposit and savings accounts, customers didn’t look back when the hightailed it for the smaller institutions. Of the 50 percent of customers surveyed who changed banks, they also claimed poor customer service then became the final straw that broke the camel’s back. Not surprisingly Bank America scored the lowest followed closely by Wells Fargo, Citibank, Sovereign Bank and Chase.
People haven’t forgotten the debacle of the large banking institutions and their significant roles in the state of the economy. Big banks still make loans and mortgages more difficult than many of the small banks. When I walked into Chase Bank the other day to deliver a document for a real estate closing I was attending, the pleasant woman at the door greeting customers told me she loved my shoes! No one has ever said that at the smaller institution I use, but I doubt that will be the reason I will choose to change banks.
photo credit: Fibonacci Blue
