J.D. Power and Associates reports: Among bank shoppers, brand image and superior customer service drive higher close ratesMortgagePress.comJ.D. Power and Associates, 2009 Banking Purchase Funnel Special Report, Rockwell Clancy
When consumers evaluate banks, factors such as brand image and
an institution's reputation for providing good customer service
strongly affect levels of consideration and selection, and
ultimately a banks bottom line, according to the J.D. Power and
Associates 2009 Banking Purchase Funnel Special Report.
The report, based on initial findings from the J.D. Power and
Associates 2009 Bank Shopping Study, identifies the decision-making
process shoppers undergo when choosing banks. It is designed to
assist executives in understanding their bank's relative strengths
and weaknesses during the key phases of the bank shopping
processawareness, consideration and selectionwhich are collectively
described as the purchase funnel. A bank's market share is driven
in large part by its success at each stage of the purchase
funnel.
The report finds that a bank's brand image and
reputationparticularly as influenced by recent events covered in
the mediahave a strong effect on consideration, and specifically,
active avoidance. Among consumers shopping for a bank, 30 percent
report deliberately excluding a bank from consideration due to
perceived financial instability, the bank's bad reputation, or its
questionable ethics.
The report also finds that banks with particularly high
consideration rates are perceived as having an innovative array of
product offerings. In particular, shoppers are more likely to
consider banks that offer a range of online functionality, mobile
banking services, debit cards with reward programs, and account
alerts.
"The importance of innovation is somewhat unexpected,
considering that many consumers perceive banks to be largely
conservative," said Rockwell Clancy, executive director of
financial services at J.D. Power and Associates. "This suggests
that being on the leading edge with new products is an actionable
way to differentiate an institution from the competition. What may
be emerging here is a fundamental redefining of 'convenience.' In
the past, this has meant having more branch locationswhich has
historically been a primary reason for consumers to choose a bank.
Now, convenience is more about availability at any time and any
place."
The report finds that providing high levels of service to
current customers drives higher levels of consideration and
selection among these customers in the future. Among customers who
have switched to a new bank, 27 percent attributed their decision
to either having had a previous good service experience with the
new bank or receiving a positive recommendation about the
institution. In contrast, better interest rates, lower fees and
perceptions of the banks involvement in the local community were
notably less important selection drivers among customers who
switched.
"Price-based differentiation can be easily matched by
competitors," said Clancy. "However, good customer service is
something that is much more difficult to duplicate and can create a
distinct advantage."
The 2009 Banking Purchase Funnel Special Report is based on
responses from 7,500 customers evaluating 25 banks, including Bank
of America; Bank of the West; BB&T; Capital One; Chase;
Citibank; Citizens Bank; Comerica Bank; Compass Bank; Fifth Third
Bank; HSBC Bank; Huntington National Bank; KeyBank; Manufacturers
& Traders Bank; National City Bank; PNC Bank; Regions Bank;
Sovereign Bank; SunTrust Bank; TD Bank; U.S. Bank; Union Bank of
California; Wachovia Bank; Washington Mutual Bank; and Wells Fargo
Bank. The report was fielded in February 2009.
For more information, visit www.jdpa.com.
