One-Quarter Of Customers Likely To Switch Banks After Opening New Account

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Prime Performance Survey: Customer Experience Opening Bank Accounts

Clearly, customers are looking for something more than just the products and services offered. They care about the way they are treated.

After opening a new bank account, 25 percent of customers claim they are likely to switch banks within the next 12 months, while only 50 percent report they are unlikely to switch, according to a new study, Customer Experience Opening Bank Accounts by Prime Performance, which advises banks on improving the client experience.

Prime Performance data shows that 10 percent of credit union members are likely to switch banks, and 72 percent are unlikely to switch. At small banks, with less than 300 branches, 14 percent of customers are likely to switch and 65 percent are unlikely. At large banks, with 300 to 4,000 branches, 29 percent claim they are likely to switch and 44 percent are unlikely. Twenty-six percent of Wells Fargo customers report they are likely to switch banks and 51 percent unlikely and 27 percent of Chase customers are likely to switch and 46 percent unlikely. Bank of America customers report the lowest scores with 30 percent of customers likely to switch banks within the next 12 months and only 43 percent unlikely to switch.

These findings and others come from the Prime Performance 2010 Bank and Credit Union Satisfaction Survey. The survey polled more than 6,000 customers of credit unions, small banks, large banks and three mega-banks – Bank of America, Chase and Wells Fargo.

“Bankers should be concerned that one-quarter of customers who just opened up a new account are already likely to switch banks and another one-quarter are unsure. The relationship with the customer is not getting off to a great start. Bankers need to spend more time asking questions about financial needs, recommending appropriate financial products/services and helping customers understand the features and benefits of the account they are opening,” said Jim Miller, Prime Performance president.

Prime Performance survey results show that credit union members give their bank a net satisfaction score of 86 percent. The comparable score for small banks was 78 percent and for Bank of America and Wells Fargo, it was 67 percent, which is also the national average. Falling below that were large banks, 62 percent, and Chase, 56 percent.

A net score is the percent of satisfied customers minus the percent of dissatisfied ones. A score of 100 percent is perfect.

Selected data from the new account study show these net scores for financial institutions:
•Does what is best for the customer. Industry wide, 45 percent of customers believe the bank is looking out for the customer’s best interest when opening a new account, while 12 percent feel the bank is doing what is best for its own bottom line, resulting in a net score of 33 percent. Credit unions and small banks scored above average with net scores of 55 percent and 35 percent, respectively. Bank of America scored right at the industry average. Wells Fargo scored slightly below average at 32 percent, large banks, 29 percent, and Chase, 20 percent.
•Offers competitive prices, rates and fees. Credit unions lead all institutions with a net score of 66 percent. Small banks, 49 percent, and Wells Fargo, 38 percent, both scored above the industry average of 37 percent. Scoring below average were large banks, 33 percent, Bank of America, 28 percent and Chase, 25 percent.
•Business is important to the bank. Overall, 55 percent of customers believe their business is important to their bank and 11 percent believe it is not important, resulting in a net score of only 44 percent. Credit unions and small banks score above average at 66 percent and 58 percent, respectively. Bank of America and Wells Fargo both scored 40 percent, while large banks scored 39 percent and Chase scored 32 percent.

“Clearly, customers are looking for something more than just the products and services offered. They care about the way they are treated. They want to deal with companies they can trust, who care about their financial needs, and ones that have friendly and knowledgeable employees,” Miller said.

Prime Performance survey results measured precisely how various representative actions affected customer satisfaction:
•Knowledgeable. The net satisfaction score falls from 74 percent to negative 5 percent when customers believe the representative is not knowledgeable about products and services.
•Valuing customers’ time. The net satisfaction score falls from 77 percent to negative 4 percent when customers feel their time is not valued.
•Friendliness. Seventy-six percent of customers are satisfied – and only 3 percent are dissatisfied -- when bank representatives are friendly. This results in a 73 percent net score. Unfriendly representatives cut the net score by 68 percent -- to 5 percent.
•Asking questions about financial needs. The net satisfaction score is 73 percent when representatives ask customers questions about their financial needs, but drops to 50 percent when that is not the case.

A full copy of the Prime Performance Customer Experience Opening Bank Accounts study can be found at: http://primeperformance.net/2010researchnewaccounts/

About Prime Performance
Headquartered in Denver, Prime Performance works with financial institutions to increase profits by developing and implementing a superior client experience. Since 1989, the company has specialized in measuring the customer experience through live phone interviews and providing the tools and training needed for banks, credit unions and other financial institutions to elevate the level of service they provide their customers. Learn more about Prime Performance by visiting the company online at http://www.primeperformance.net/.

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