Banking Industry Marketers, Customers at Cross Purposes

If banking marketers don't start paying attention to customers' pain, the industry could be in for a period of high churn as customers consolidate and seek lower rates, according to a study released today.
Recently, major US banks have been adding new fees for debit card use, checking accounts, and in-branch services. A new study by the Chief Marketing Officer Council warns that such moves could result in an upswing of churn and instability in an industry long accustomed to loyal and stable customers.
Consumers are still struggling to make ends meet; men say their greatest concern is being able to pay bills on time. One thing they are asking for is more and better tools and information to help them manage their money in more effective ways.

When customers were asked for their biggest concerns or complaints about their banks, the top three answers pointed to exactly the kinds of fee-raising that big banks have been doing.

The next year could see significant churn, even though 36 percent of customers have been with their banks for longer than 10 years. Almost one-third of those responding said they were either "concerned" or "on the fence" about their banking relationships. Many of these customers may change banks in search of more options or services (32 percent), lower rates (27 percent), or freedom from surcharges and fees (25 percent).
These pain points about which customers express concern are not high on the radar screens of banking industry marketers. These executives are aware of customers' hottest issues. They were asked, "What are your customer's primary sources of pain or the most frequent complaints about your brand, service, product, or company?" The most popular answer, at 47 percent, was "Increases in costs, charges, and fees." But this awareness does not translate clearly into action at the level of marketing programs.
When asked, "How are you adding value to customer communications and engagements?" the plurality response, at 19 percent, was "Cross-selling or upselling services to increase customer lifetime value" -- not exactly responsive to customers pleading for price relief and for help managing their finances.

Only 13 percent of marketers say that educating customers and providing easy-to-consume, relevant content are key priorities in the months ahead. Only one in four believes that the delivery of programs to assist customers in managing their personal finances will be important.
While the top customer engagement priority (chosen by 39 percent) was "Retaining relationships and building affinity with existing customers," marketers expressed frustration with the ineffectiveness of programs designed to do just that, often as a result of data siloing in their organizations and a lack of practical insights.
While customers are eager to engage, and many of them consider banks their trusted financial partners, industry marketers need to do a better job of understanding and meeting customer expectations while also finding ways to cut costs and raise revenues in perilous economic times.
For the study, "What's Critical in the Global Banking Vertical," the CMO Council interviewed more than 1,100 consumers and 126 senior marketers. The study was sponsored by Ricoh.
— Keith Dawson , Senior Editor, The CMO Site
The CMO Site is an executive social network that provides CMOs and other marketing executives from the world's leading organizations with a real-time, online venue where they can convene to discuss how they're delivering on the most critical marketing priorities. Join us!