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Bank Approval: What Matters to Customers

 

If you believe the news you might imagine Americans have a pretty low opinion of bankers. It seems cut and dried; the recession laid bare a lot of anger over banks’ role in the economy’s crash.  But new insights from our Consumer Pulse research on banking approval, suggest bank customers’ views are a bit more balanced. We asked over 1,400 bank and credit union customers how they felt about their primary bank and the industry as a whole.  

We found that while it’s true that most Americans aren’t happy with the banking industry they are pretty happy with their own banks. This kind of discrepancy isn’t shocking or unusual— Congress has abysmal approval ratings, but people tend to rank their own representatives quite highly, clearly personal experience counts for a great deal.  

CMB bank approval
When we looked at customers' banking approval and experience we found some things worth noting:  

  • Approval ratings vary by bank type. Community banks and credit unions were rated more highly than regional and large national banks, with credit union customers giving high marks to many elements of their banking experience, from fees and rates to commitment to the community and remote banking offerings. In fact 85% of credit union customers rated the value they got from their bank as “excellent.”

  • As for what doesn’t appear to impact approval ratings, those with household incomes under 50k gave just slightly higher approval (51%) to their banks, compared to those making 100k or more (47%).

  • Just 9% of customers who disapprove of their banks (and 2% of all respondents) say they’re actively looking for a new bank, but willingness to make the switch also varies by bank type. A full 22% of regional bank customers who disapprove of their bank say they are actively looking for a new bank, versus only 7% of large bank customers. One explanation for this disparity is that while large banks are known for accessibility and product breadth, and small banks are recognized for personal service and lower fees; regional banks are often chosen for their proximity. And as we’ve seen in our previous Consumer Pulse research, increasingly that is not enough.

  •  Wondering why customers so displeased with their bank, end up staying? Over half (54%) agree switching banks is a hassle.

Amidst the real anger and displeasure aimed at banks and the banking industry as a whole, the real message may be: don’t underestimate the power of the customer’s banking experience. Fewer than one in five of respondents agreed that “all banks are pretty much the same.” This is good news for banks who can take the opportunity to differentiate themselves from the competition and from a terrible industry reputation.

Download The Future of the full-Service bank Branch here.CMB Banking Consumer Pulse

Posted by Jim Garrity, Jim is Managing Director of CMB’s Financial Services    practice. He isn't looking to switch banks anytime soon.

Infographic: The Future of the Full-Service Bank Branch

 

banking infographic

Infographic designed by Stephanie Kimball. Stephanie is CMB's Marketing Operations Manager. You can follow her on Twitter at @SKBalls

Are Full-Service Branches Here to Stay? Don't Bank on it.

 

Bank Research CMBThirty years ago, the ATM revolutionized banking convenience by letting customers conduct their business at any time, and without stepping foot in a branch— there are now several generations who can’t remember a time before you could just “hit the machine.”  But all that automation meant fewer bank customers face to face with bank reps and the products they sell. Decades later, rising cost pressures, new regulations, consumer desire for added convenience, and diminishing returns on full-service bank branches have created an economic challenge for banks.

To understand the impact of these changes, through our Consumer Pulse we explored customer perspectives on bank convenience, fees, and branch alternatives. We found what bank customers say they value, doesn’t necessarily match up with what they’re actually doing.  We asked people how important having a branch nearby was to their sense of banking convenience—most (67%) reported it was “very important.”  Taken by itself this isn’t a shocking statistic; we know bank customers appreciate personal service and convenience. But asked how often they actually go to a bank (not an ATM—a full-service branch) nearly half (45%) go fewer than 5 times per year.   

What explains this disconnect between what consumers say they need and what they actually use?  Online and mobile banking services mean customers can conduct most transactions from the comfort of their home or office. Although a trip to the local branch is often unnecessary when you can check your balance, transfer funds, or make payments from your phone, customers find full-service branches appealing. Still, fond memories may not be enough to keep branches, as customers know them, open.  

For the first time in over a decade, banks are closing branches faster than they’re opening them, and banks are looking to alternatives with lower overhead and operating costs. To understand what alternatives were most and least appealing, we asked respondents to participate in a trade-off exercise to evaluate new banking concepts. When forced to choose, customers were willing to give up their local branches rather than see fees rise. These findings suggest branch proximity, while still important to many, is not as critical to a convenient banking experience as it might have been in the past.

One of the alternative banking concepts we tested was the” teller-less” branch. The teller-less branch is largely automated, but sales professionals are available to discuss bank products, and customer representatives are available by phone. In one of the more surprising findings, customers said they would rather have their local branch close altogether than have it replaced with a teller-less branch. This finding, while counter-intuitive, is telling—banks will need to educate their customers on how new banking concepts will affect and benefit them.

While the full-service bank branch may become a thing of the past, banking convenience and service are as relevant to today’s bank customers as ever—even as the modes of service change.

Banking research CMB Consumer PulseDownload the full report: The Future of the full-Service bank Branch here.

Posted by Jim Garrity, Jim is Managing Director of CMB’s Financial Services practice. He hasn’t stepped foot in his bank branch in months.

We are the Millennials! AND WE ARE…Hopeless?

 

Millenials textingThe other day I read an interesting article in the Chicago Tribune; the headline read:   Hard-hit Millennials less likely to be brand loyal. As a “hard-hit” millennial (those aged 19-34), who owes the value of a modest-home in student loans, I was very interested in what the marketing masterminds of the world had concluded. Turns out, it’s not so good.

According to a study released by WSL Strategic Retail, 25% of Millennials reported that they do not have enough money to cover basic needs. It also concluded that 80% of Millennials believe it’s important to get the lowest price when shopping and 60% would choose a lower priced item over their usual brand if it meant saving a few bucks.  The article also suggests that retailers had previously considered Millennials their “golden ticket” to growth and success. I guess they opened the wrong Wonka bar.

As an agent of consumer research, I began to wonder about our clients and other brand marketers. Are they spending sleepless nights trying to develop plans to compensate for a demographic that is not only unwilling, but virtually unable to spend? Millennials have already been dubbed “untouchable” by traditional marketing standards due to the digital boom; it makes you wonder why brands would invest countless dollars in research and marketing efforts if Millennials are such a lost cause. My advice to marketers? …don’t start losing sleep just yet.

To be clear, we see evidence that supports WSL’s conclusions. Our Winter 2011 Consumer Pulse research on loyalty found that Millennials expressed less loyalty than Boomers to a range of products, with the exception of social networking sites and electronics.

However, we can also find support that suggests Millennials are not as hopeless as they seem. The same Pulse research found that 84% of Millenials consider themselves moderately loyal. In addition, nearly half (46%) said that there are companies or products they’re so “loyal” to that they do not consider price when making a purchase decision. So how does one crack that egg?  What it comes down to is experience. Fifty-three percent of Millenials were willing to pay a bit more to companies they’ve used before and whose products they know they’ll like.

Despite it all, Millennials appear optimistic. Having grown up in an era plagued by war and economic strife, you would think the negativity would bring us down. However, Millennials are seeing a light at the end of the tunnel. According to a separate Consumer Pulse research study CMB conducted in summer 2011, 48% of Millennials surveyed were optimistic that their financial situation would get better in the next 12 months. And nearly a third (29%) said the economic downturn had no effect on their stress levels.

While our pockets may not be as deep as we would like, we are optimistic they one day will be. In fact, the same Summer 2011 Pulse research found 59% of Millennials viewed “being indulgent” a highly important goal/value. When the day finally comes where we can afford to spend, you can bet we will, and loyalty will be a driver. So have a little faith, brand marketers of the universe…we Millennials sure do. 

To read our latest Consumer Pulse reports exploring exploring trends in social media, healthcare, technology, travel, entertainment, and finance, click here.

Posted by Keri Ibbitson. Keri is an Associate Researcher with the Travel and Entertainment team. She considers herself very brand loyal, always choosing General Mills Cocoa Puffs over store brands.


Young Consumers Poised to Disrupt Yet Another Business Model: Pay TV

 

RNew Age of TV-poltergeistemember the heyday of the music industry? Remember how the big music companies pulled off a nearly unthinkable feat—convincing consumers to re-buy previously purchased products (vinyl) on a new medium (CD)? That’s what can happen when you’re the only game in town.

In addition to generating “found” revenue, the move from vinyl (including vinyl 45s) to CD had another profound impact—it solidified the album as the industry's unit of purchase. Hear a song you like? Hand over ten or fifteen dollars and you can own it. We’ll of course throw in other songs; maybe you'll like them, maybe you won’t. But you really have no other choice.

Somewhere along the line, young consumers—college students especially—got it into their heads that they no longer wanted to pay for music. And, as hard as it is to believe, they were even less interested in paying for music they didn’t want in the first place. File-sharing sites like Napster were happy to oblige. Not only did consumers begin downloading music for free, but perhaps more significantly, they also embraced a new type of music business model—an à la carte, unbundled model, where they could choose only the music they wanted.  How quickly did the music industry adapt? Well, you know how that played out….

Young consumers appear to be at it again, poised to disrupt another industry that's built its fortunes on a bundled-service business model and on being the only game in town: the pay TV industry. The numbers aren't huge yet, but 5% of consumers in our recent New Age of Television study say they've never had a pay TV subscription. If you’re thinking that these are the folks with aluminum-foil rabbit ears on their TV sets, think again. Half of these "never had pay TV" household decisionmakers are 22-30 years old (more than double the percentage in the study’s total sample) and 63% have college degrees (also higher than the norm) Their income is lower than average, but they've chosen to spend their money on broadband service (they had to have broadband to be included in our study), and not on cable and satellite.

And yes, they are watching TV and movies. They're just accessing that content the same way they presumably learned to do so in college—on their laptops (72% watched on a computer in the week prior to the study), and finding content from aggregators like Hulu (43%), network TV sites (33%), and file-sharing sites (10%). They’re accessing the specific programs they want without paying for unwanted programs or networks in a bundle. They may have to wait a year to watch the first season of Homeland, but that may not be a huge deal, considering how much they'd need to pay for that privilege and how much other content is available online.

The multimillion-dollar question: Will these young consumers eventually get pay TV? The answer: unlikely, at least based on what they told us. Only 15% said that they would definitely or probably sign up within the next 3 years.

Three years is practically an eternity in today’s TV world; who knows what will happen between now and then? Once these consumers settle in to a more stable life, start a family, and make more money, they could decide that the convenience of picking up a single remote for access to a ton of content is too attractive to resist. But then again, by that time someone may come up with an online solution that's just as, or even more, convenient. And maybe it will be less expensive.

We're going to keep an eye on "never had pay TV” consumers in future waves of our study. And the industry will probably want to as well. After all, it’s not as if college graduates—looking for places to live, comfortable accessing content online, and with limited finances—are going to be in short supply any time soon.

Posted by Peter Fondulas. Peter is co-author of the New Age of TV study, a CMB consultant, and President of Fondulas Strategic Research.

Download the summary report The New Age of Television: How Consumers Make Choices in a New Era of Entertainment Options

 

 

 

 

New Study Explores What Drives Consumers to "Like" and Subscribe

 

CMB infographicIn 6th grade, my teacher sent home a survey to parents about “What motivates your child.” My mother wrote down three things: candy, money, and anything free. I remember this so vividly because I was mortified. I wanted her to say something meaningful like, “positive praise” or “a creative academic environment.” But no, she laid it all out on the table; that I was a greedy, Twix-loving, free loader.

Here at CMB, we spend a considerable amount of time investigating what motivates consumer behaviors. We want to know what the consumer is doing and why, and we want realistic and actionable insights. Keeping this in mind, I have considered my mother’s response to that long-ago survey and realized she probably should ditch being a nurse and consider a career in marketing.

To take an in-depth look at what motivates consumers to “Like” a company on Facebook and subscribe” to e-mails we partnered with Constant Contact to survey 1,481 Americans over 18.  The top motivators to these two strategic means of engagement are: to receive special discounts, or take part in special promotions. This concept of free giveaways, deep discounts, and being privy to special information is a major driver of customer engagement.

While the understanding that consumers enjoy receiving deals and free gifts may not seem like breaking news at first, it’s an important finding for companies looking to get the best return on where they decide to spend money on special deals, discounts, and giveaways. In a recent Consumer Pulse exploring the motivations of customer satisfaction survey takers, we found many consumers were motivated by the desire to improve the company and service rather than free gifts and incentives. Yet this doesn’t hold true for consumers “liking” brands on social media or subscribing to email lists.

Many consumers don’t particularly care about the bottom line of their favorite brands or businesses. They want to know “what can you do for me?”  Businesses who utilize e-mail and social networking to engage with their consumers need to heed this opportunity. More often than not, consumers want to know how they will benefit from a long-term business to consumer partnership.  Organizations that best understand the underlying intentions of their consumers have the key to turning special promotions and discount programs into lasting customer relationships. 

Long-term engagement is essential to solidifying a brand in any market. With the volume of communication and information sharing ever growing, businesses need to be prepared to meet their markets’ expectations. Consumers spend a lot of time on these outlets and businesses must be able to find a way to provide something meaningful so they’re not lost in the noise. Facebook pages and informational e-mails are only as good as what they can provide to their audience.

CMB Consumer Pulse

Download the full report: 10 Facts about Why and How Consumers "Like and Subscribe here.

 

 

 

Posted by Keri Ibbitson. Keri is an Associate Researcher with the Travel and Entertainment team. She has found her motivational drivers have grown since 6th grade, and they reach well beyond candy, money & free stuff. 

Infographic: How Small Businesses Are Using Social Media

 

Last year we partnered with Constant Contact to learn how consumers use Facebook to connect with brands. Take a look at this cool infographic from Intuit and Column Five featuring some of our findings and how small businesses are using social media:

Intuit infographic

 

CMB Facebook Consumer Pulse

 

 

Download the full report here.

The New Age of Television: People are Thinking Outside the (Cable) Box

 

CMB Over the top televisionWhen we set out, in our latest CMB Consumer Pulse, to discover how consumers are navigating the unprecedented range of options for accessing TV and movies, we knew some of the things we’d find out—e.g. the number of people who have completely cut the cord is still small, Netflix streaming is very popular, and many people are watching on smartphones and tablets.  However, some things surprised us:

Completely cutting the cord may be rare, but that’s not the only, or even the most important thing to worry about

People who have completely “cut the cord” entirely are a very small group (3% of the study’s population). The more compelling finding is the number of people who may be “on deck”— those who have tried Over-the-Top TV (OTT) and/or those who are considering reducing their pay TV service.

  • More than half (54%) of respondents used the Internet to watch TV at least once.  (tweet this)

  • Nearly half (43%) of pay TV subscribers said that they were at least somewhat likely to cut back on premium services (like Pay-Per-View or premium channels) in the next year. (tweet this)

This suggests that a big chunk of consumers’ TV-watching dollars could shift, even if their pay TV cords remain intact.  And, that awareness and perceived value of OTT have risen to a point where consumers of all kinds are investigating OTT as an option.

The biggest screen does NOT always win, and the definition of “watching TV” is changing

Everyone knows that new devices are impacting consumer behavior.  But our research suggests technology is driving fundamental changes in how people define the “TV watching experience.” For example:

  • Among people who watch TV on tablets, 58% say that they watch TV on their tablet when they’re at home. (tweet this)

  • Nearly two-thirds (63%) of those people say they’ve used a tablet even when they could have watched the same show on their TV. (tweet this)

There’s no indication that people will stop using their televisions entirely. But this does suggest that mobile devices have a role in the TV experience that transcends their mobility; and there are more scenarios where people will choose something other than the biggest available screen.

Not all elements of the TV watching experience are created equal

In our survey, consumers completed an exercise that forced them to trade off different attributes of a TV service provider based on what was most important to them.  Some of the findings were obvious (e.g. people want to pay less for their TV).  But other priorities offered more of a surprise:

  • Streaming Content beats Owning Content:  Consumers prefer alternatives that rent/stream video over those where you download and own the content. (tweet this)  

  • More Content beats Newest Content:  More consumers say having the largest catalog of content was more important than the fastest access to new content. (tweet this)

In short, technology and features matter but complexity is a barrier to switching over completely. Today, people who want an OTT solution have to manipulate a Rubik’s cube of devices, platforms/providers, and payment models.  However, that will change as more streamlined solutions come online. In the future, the most successful offerings will be those that provide a simple solution that's built around the things that matter most to consumers.

Check out this short video:


 

new age of television

We surveyed nearly 1,500 consumers in the U.S. to get a pulse on their TV and video viewing habits and what it means for the future of OTT. Learn more, download our Consumer Pulse: The New Age of Television

 

 

Posted by Jon Giegengack, Jon is a Director at CMB and leads research for digital entertainment companies in television, music, videogames, and social media. As a veteran cord cutter, he knows the good, the bad and the ugly of today’s TV options.

Customer Feedback: The Power of a Thank You

 

CMB Emily PostLast week I blogged about the positive intentions of consumers who take the time to participate in customer feedback surveys.  One of the more disappointing findings is that most companies fail to respond when customers give poor scores or negative feedback.  On this point, we asked respondents to recall the last time they provided negative feedback or a complaint in a customer satisfaction interview, and whether a company provided a response.  A majority say they did not receive any response—just 35% recall any type of response from the company.

This was quite a surprise.  Companies are investing tens of thousands of dollars in their customer feedback programs, but many are missing the point.  When customers complain it’s because they feel disappointed or disrespected, treating them like an anonymous statistic is another kind of service failure. How do you teach a company or brand to mind their P’s and Q’s? Maybe we need an Emily Post for corporations!

When you think about it, customers who take the time to respond to a customer satisfaction interview have given time and effort to provide information that should be valuable to the company.  Those who’ve had a bad experience could easily turn and walk away.  Instead they respond to a request for feedback.  Whether it’s a complaint about a service failure, a suggestion, or even a review of a positive experience, companies need to let customers know they’re being heard.

And yet the majority of companies are turning their back on these people!

The thing is, technology makes it easy to manage and respond to feedback; and most people don’t expect much.  In fact, confirmation and a commitment to improve will go a long way to show appreciation.  And of course, a simple “thank you” can’t hurt.

describe the image

Download the full report: Customer Satisfaction Surveys: Open the Door to Customer Engagement

 

Posted by Jeff McKenna, Jeff is a Senior Consultant at CMB, and the creator and host of our Tools and Techniques Webinar Series.

Customer Satisfaction Surveys: The Glass is Half Full

 

As CMB has grown and expanded our customer satisfaction measurement practice, we’ve invested considerable time and resources into conducting research on research, to make better decisions about managing these programs.  In addition to direct feedback from clients, we conducted a study among managers at medium and large businesses who rely directly on customer satisfaction measurement for decision-making.  The findings point to many opportunities to improve the overall usefulness of these programs.

Our next step has been to look at customer satisfaction research from the consumers’ point of view – i.e. the respondents who complete the surveys at the bottom of their receipts or that come into their inbox. What we found might surprise you…

We’re gaining deeper insights about the nature of people who respond, their frequency, and the reasons for responding to the requests. For instance, most people respond to share details of both positive and negative experiences; just 8 percent say they respond only when they have had a bad experience.  What this tells us is that people voicing their opinion in customer satisfaction are NOT more inclined to be negative.  In fact, most people respond with good intentions to help the company improve or maintain good service/products. 

Here are a few other facts worth sharing:

Many customers give feedback as part of their “job” as customers—50% say they give feedback to improve the company. Tweet this

57% of customer satisfaction survey takers say they do it to give positive feedback. Tweet this

Only 28% of customer satisfaction survey takers do it to win a prize or get a reward. Tweet this

Customer SatisfactionDownload the full report here

Next week we’ll talk about why and how companies need to respond to the feedback.


Posted by Jeff McKenna, Jeff is a Senior Consultant at CMB, and the creator and host of our Tools and Techniques Webinar Series.

 

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