J.D. Power bank survey gives banks blueprint for customer satisfaction & increased deposits.

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The headline for the new J.D. Power 2009 Retail Bank Satisfaction Study out yesterday screamed that “customer commitment to retail banks declined for a second consecutive year.” Hidden in that dire report was a blueprint for success. One that pointed to increased customer satisfaction and increased deposits. The smart bank marketer just needs to read between the lines.

While the official news release on May 19th from the renowned marketing information company noted some excellent facts, it was the podcast by Michael Beird, director of the banking practice at J.D. Power, that imparted some positive plans for bank marketing. In the current environment, marketing execs may believe that it’s easier to focus on financial goals and shy away from customer satisfaction. But it’s actually customer satisfaction that affects profitable deposit growth.

J.D. Powers analyzed six factors: transactions, account statements, account initiation/product offerings, convenience, fees and problem resolution.

The study found that only 35% of customers are highly committed to their retail bank in 2009 compared to 37% in 2008 and 41% in 2007. Understandably highly committed customers . . .
- use more products
- give more referrals
- are less likely to switch to another bank

Increased satisfaction = increased deposits.
But what’s more crucial is that “customers reporting the lowest levels of commitment in 2009 happen to be those with deposit balances that are 15 percent higher than average,” said Beird in the news release. “With this in mind, it is crucial that banks take steps to address this steady decline in customer commitment, as moving just 5 percent of customers from low and moderate levels of commitment to high commitment can mean additional deposit growth of more than 2 percentage points higher than average.”

In other words, banks ranking in the top half of the customer satisfaction survey had 2 to 5% greater deposit growth.

What drove customers away from their banks?
In a word, fees. One in 3 customers who switched banks in the past year did so because of fees, especially the rising cost of overdraft fees.

How can banks improve customer satisfaction?
Resolve problems quickly seems to be the answer. In addition, the banker should initiate follow-up contact to ensure customer satisfaction. The customer shouldn’t have to continue to follow-up until a satisfactory resolution is achieved.

“Banks with high brand image scores typically engage in practices that focus on strong communication with customers, such as welcoming them to the branch office or following up on problems,” said Beird. “By focusing on aspects most critical to the banking experience, banks can win the favor of their customers, which can lead to considerable financial rewards.”

When customers have a problem, it’s how it is handled that affects their customer satisfaction. In fact, how it’s resolved affects attrition and customer retention. Forty-four percent of customers who are at risk for switching banks reported they had at least one problem with their accounts over the last 12 months, as opposed to 7% of loyal customers who reported they had a problem.

Besides having their problems resolved quickly, customers are also attracted to the number of conveniently located branches and availability of online transactions.

The secret of bank marketing. . .
communicate, communicate, communicate.
Proactive communication played an important role with banks who performed well in customer acquisition, cross-selling and retention . . . key goals in any bank marketing program.

Beird points out that a needs assessment during initial account opening and outbound follow-up within 3 days results in average deposit balances that are 17% higher than other customers. And, customers must feel that questions asked are specific and relevant rather than routine.

The report also broke down how specific banks performed by region. Check out the graph accompanying their news release or view the detailed regional bank ratings charts.

The lesson for community bankers.
While the study highlighted larger banks in each region, community bankers can use the information to beef up their own bank marketing programs. Initiate a needs assessment campaign for new prospects with relevant questions, follow-up with new customers promptly, set-up a customer satisfaction program and be pro-active in resolving problems. Follow these suggestions and you may be on top of that next J.D. Powers survey.

Can creative genius John Cleese improve your bank marketing?

Funny man John Cleese has the creative chops to shake up any bank marketing department. After all, he’s one of the writers and actors behind Monty Python’s Flying Circus, Faulty Towers and A Fish Called Wanda. He has since moved into creating business training videos and online courses for professionals. But what should be of interest to bank marketers is the British-born actor’s lecture on The Importance of Creativity which he presented at Trinity College in Texas last month. In that talk he revealed insights which could help any bank marketing exec with marketing strategy, tactics, creative and general problem-solving.

Cleese cracks the code to creativity.
It’s the system that this creative genius employs that can unlock your marketing department’s thought-process, too. If you’ve ever been stymied about strategy, terrified over tactics, cornered by creative or deadlocked with deadlines, Cleese’s suggestions will boost your thought-process.

* Use your unconscious mind to find solutions. “Every great breakthrough comes from the unconscious, ” says Cleese. While our culture favors the analytical mind which uses logic to solve problems, the comedic talent believes that an overreliance on our right brain creates its own set of problems. We try to become too efficient. “We are always trying to save time and we become anxious because of deadlines,” he explained.

* "Don't suppress creativity; it's like driving with the brakes on,” warns this now professor-at-large at New York’s Cornell University. Unlock your unconscious mind with a good night’s sleep when working on a project or problem. Often the unconscious mind works best on a solution while you are not awake.

* Avoid interruptions. Interruptions are the most destructive roadblock to creative thinking. Find a place and a time to think creatively without outside interference. . . no phone, TV, computer. Creative thoughts can be realized if people give them time and a non-interruptive environment. You can train yourself to be creative by just leaning to be quiet. If people put the time and effort in, something happens, Cleese said.

* Do not get anxious if a solution does not come right away. A highly creative person realizes that a more patient, less deliberative type of thinking is good for solving problems.

* Once the unconscious mind starts working, the results will be surprising. “What you will get is unarticulated ideas – vague notions and whims, “the actor/writer notes. “You will have no idea what will come up.”

* Don’t analyze the information or thoughts too soon. Cleese believes “you have to give it time. You have to wait until it begins to make sense.”

* Repeat the entire process. “Take the information from your unconscious, see what works and what doesn’t, and then relegate it back to the unconscious,” explains the Monty Python star. After all, Cleese wrote 13 drafts of the screenplay "A Fish Called Wanda" before it became a film!

The unconscious mind works for everyone.
Cleese demonstrates how the system actually worked for him. Donna J. Tuttle recounts this story in her blog entitled, Writeontime. The blogger attended a dinner party with the famed actor prior to his lecture. Tuttle writes. . .

“True creativity, Cleese says, comes from the unconscious portion of the mind. For example, Cleese once wrote down a problem. He left it for a couple of days, and the answer arrived in his head quite naturally when he wasn’t tumbling the issue over and over in his brain. He lost a script and rewrote it from memory. When he found the original script and compared the two, the second was almost word-for-word — except, well, better. Cleese believes his brain edited that work while it simmered in his unconscious, safe from real-world, task-driven edit mode.”

While I’ve read about this incubation/unconscious mind theory in various books, I’ve never really heard someone validate its practicality. I know that from now on when faced with a bank marketing problem . . . whether it’s strategic, tactical or creative , I’ll be thinking about John Cleese.