I read with interest about a new study from J.D. Power & Associates, which found that more customers are willing to switch banks than in the past. With the reputation of the banking industry still struggling to find new footing in the wake of the recession, a decrease in customer satisfaction isn’t surprising — although I assume bank-hopping isn’t due to a search for higher interest savings rates (since those are as low as they can go).
On the other hand, the gap between customer satisfaction between larger and smaller banks has continued to widen since 2007, with many customers citing an emphasis on better customer service at smaller banks as the reason. As the recession worsened, many big banks cut costs and head-count, leading to increased problems with customer service and promptness in addition to new fees.
This is clearly an instance where bigger banks can take the concepts of loyalty marketing and improved customer service and use them as reputation-enhancers at a time when they can desperately use them. After all, there may be little to be done about interest rates or the larger issues facing the country’s financial system when it comes to interacting directly with a customer. But good customer service, easy-to-understand communications, and an overall experience that breeds feelings of loyalty is something that even the biggest banks can strive for in this environment.
In the same way that retailers need to go beyond price to attract and keep customers — using enterprise loyalty tactics such as improved customer relations, and data analysis towards more personalization — so should banks be thinking about how to keep customers from hopping to the competitor down the block. What would it take to encourage a bank customer to stay put in this market? It may not only be about better rates…it may also be about simple customer/bank interaction and thinking twice about cutting costs related to service, especially if other fees absolutely have to rise.
