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Great customer service: What consumers prioritize the most

Looking to increase loyalty? Focus on the No. 1 reason consumers choose and stay with a financial institution.

Apr 21, 2022 / Consumer Banking

The pandemic led to an unprecedented acceleration in the use of digital, leading to an increase of e-commerce and a diminished reliance on branches and cash. It also led to numerous behavioral changes, many of which are anticipated to last. For banks to successfully grow and compete moving forward, they must strategically determine how to adapt their business models for these changing preferences and behavioral shifts.

A detailed survey by Strategic Resource Management gathered a snapshot of consumer attitudes more than a year after COVID-19, with the results providing a view into the possible permanence of consumer mindsets.

Regardless of the moment in time, this 2021 study was not a pandemic study. The methodology aligns with research cycles dating back to 2012, and the resulting insights will continue to apply well beyond any temporary market disruptions. Several key findings are predicted to impact banking behaviors for years to come.

Great service is most important

Customer service trumps all when it comes to attracting and retaining consumers. When asked for their number one reason for choosing and staying with a given financial institution, respondents gave more votes to great service than product quality, ease of use and personal recommendations.

Location, value for money and loyalty programs also ranked high when deciding to stay with a provider.

Channel preferences yield surprises

Surprising responses were also gathered when asking respondents for their first and second channel preferences. Websites narrowly outrank mobile apps as the top choice for interaction.

However, phone and branch still rank third and fourth, remaining the preferred channels for nearly a quarter of those surveyed. This easily outranked web chat, video calls and virtual assistants, and despite stereotypes, these preferences do not change much when viewed across age brackets.

Another surprising find is that email and phone both moved ahead of apps as the backup communication preference – web/video chat and virtual assistants notably increased from their once-muted popularity among first options. A logical interpretation would be that, while channels like mobile apps are valued for routine queries and interactions, consumers prefer more personalized – and mostly live – support for more complex queries.

While a commonly held belief is that branch traffic will continue to decline, our research demonstrates that it will remain important for customers. The data implies that the branch network may be central to an implicit brand promise and that closure of nearby locations is perceived as a loss of access, even if not visited regularly.

If branches function as a security blanket for rare but urgent situations, leaders must determine the optimal balance between that value and the cost of operating an extensive network. In aggregate, the research proves the need for agile customer experience management that uses data to enable responsive service.


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Environmental issues matter

The research further probed the factors influencing consumer loyalty to isolate opportunities for banks and credit unions to move the meter on this essential attribute for a long-term relationship.

Two of the key drivers are intuitive – an incremental improvement in Net Promoter Score for “cares about your individual needs?” yields the greatest return on loyalty, and the NPS for “easy to do business with” also rates highly.

The NPS for the perception of a company’s “commitment to climate change” ranked second to “cares about individual needs.” As with other measures, a commitment to climate change seems to resonate most strongly with members of credit unions and customers at community banks. Customers of the large national banking brands (and neobanks) tend to place less importance on this factor and, not coincidentally, these nameplates receive lower climate commitment ratings.

By having a deep understanding of what the key influencers of loyalty and trust are for consumers, banks can shift their strategies accordingly. In addition to knowing why customers select and stay with an institution, banks should keep a watchful eye on behavior shifts so they can pivot as needed, demonstrating their skill and dedication to doing what it takes to keep customers’ business.

And larger banks can also take more cues from smaller financial institutions as they examine policies and products that resonate with a broader consumer base. These practices can ensure greater engagement – and success – in the future.

Jehan Sherjan is insights director at Strategic Resource Management.