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CUSTOMER SATISFACTION

Winners & Losers By Bruce Paul, CEO of Customer Experience Solutions

High Percentage of Customers Will Change Banks/Credit Unions This Year

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There are 2.28 million households and businesses in the Northeast actively looking for a new banking relationship or can be easily enticed to switch.

4 BANKING NEW ENGLAND

s interest rates rise, mergers increase, and competition heats up, so does bank switching. Consumers and businesses across New England are looking to see if there is a better option than what they currently have. The latest Banking Benchmarks have revealed that there are 2.28 million households and businesses in the Northeast actively looking for a new banking relationship or can be easily enticed to switch. The banks and credit unions that will win have strong awareness and a strong brand image that lines up with the needs of those defecting. According to the Benchmarks, 13% of banks and credit unions fall in this category. They can expect far more than their fair share of new customers, and greater growth than their peers. This is not good news for some banks and credit unions that don’t stand out from the crowd. They have a mediocre brand image or stand out in areas that just don’t matter to potential new Bruce Paul customers. They can expect no better than average growth of new customers.

Some banks and credit unions will be disproportionately losing their customers to competitors. According to the latest CT, MA, and RI Banking Benchmarks results, there are 74 banks in the Northeast that could lose more than 20% of their customers to defection if they don’t make some serious changes. (This revelation comes directly from their own customers telling us during our interviews.) How do you make sure you are in the first group: the group that will be winning in your trade area? The first step in attracting new customers is to make sure they know you exist. This is not as easy as it seems. Across the Northeast, the average institution has about 35% awareness in its own trade area. This means that, again on average, 65% of the people closest to your branches do not know you exist. A bank has to drive up awareness through marketing, advertising, branch placement, word-of-mouth, social media, etc. All that takes effort and money. As the saying goes “You have to spend money to make money.” Banks have to spend the marketing dollars wisely to develop the correct brand image that will convince potential customers that they are worth trying. This includes making sure to build key brand elements like

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Banking New England Sept/Oct 2018  

In this special marketing issue, learn how to optimize your mobile site, understand why customers can be easily enticed to switch banks, and...

Banking New England Sept/Oct 2018  

In this special marketing issue, learn how to optimize your mobile site, understand why customers can be easily enticed to switch banks, and...

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