WESTLAKE VILLAGE, Calif. (7/16/09)--Credit unions won't be surprised to learn of a new study's conclusions that courtesy and personal service matter when consumers shop for a financial institution. In fact, they matter more than the actual products or services offered. J.D. Power and Associates' 2009 Retail Bank Shopping Study, released Tuesday, found that 36% of a shopper's decision to select a particular bank is driven by the bank's brand image. Branch proximity matters to 21% of shoppers surveyed, and products and services influence 14% of those respondents. However, the branch's employees and what they do to help--or not help--account for 15% of the importance of the shopping experience. "Some crucial aspects of a bank's brand image--such as perceived financial stability and reliability--can be difficult for a bank to improve, which negatively affect the bank's likelihood of being selected," said Michael Beird, director of banking practice at the Westlake Village, Calif.-based J.D. Power and Associates. "However, branch employees can positively impact a branch's brand image by providing personal service, communicating proactively and having a customer-driven focus. These three aspects combined account for 15% of importance in the shopping process, which is even greater than the importance of bank products and services," Beird continued. Other findings:
* One third of customers who avoid a particular bank do so because of previous poor service. Other common reasons for avoiding a bank: issues with the branch's proximity or operating hours; and poor policies--such as high rates and fees. * Recommendations from others--both positive and negative--account for 31% of the importance customers place on a bank's brand awareness. Positive recommendations drive 36% of a shopper's consideration of a bank. The study does not go into whether the recommendations are from family and friends, or also from strangers, such as bloggers. * Satisfaction with the account-opening process increases if the bank employees perform simple actions to improve the customer's experience. These include: greeting the customer entering the branch; keeping wait times to five minutes or less; calling the customer by name; and providing the customer with a detailed needs assessment. Among the 19% who experienced all these actions, satisfaction scores average 890 on a 1,000-point scale--84 points above the industry's average, said the research firm.
"Making customers feel welcome throughout the new-account process and asking focused questions targeted to their specific needs and requirements are relatively easy elements that every banker responsible for new accounts should perform regularly," Beird said. "The low percentages of customers who report experiencing these behaviors highlight improvement opportunities for all banks."