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What the Best Community Banks Are Doing Right

Every year, we have the honor of presenting the Banking Choice Awards, in which the top community banks and credit unions are recognized for providing outstanding service to their customers and members. The New York Banking Choice Awards were announced in April at the Banking New York Conference, and on June 28, winners will be announced for Connecticut, Massachusetts, New Hampshire and Rhode Island at the Best Bank Expo.

The Banking Choice Awards are based upon the results of the Banking Benchmarks®, the largest and most comprehensive measure of banking customer experience in the world. The Benchmarks are independent of any financial institution and conducted by Customer Experience Solutions.

Our banking benchmarks delve into 53 different metrics about each institution customers use for banking services. These include the metrics used for the Banking Choice Awards: Overall Quality, Customer Service, Tools & Technology, and Community Contribution. Rankings for Overall Quality, Customer Service, and Tools & Technology are based on people’s responses concerning their primary banking institution. The final category, Community Contribution, is based on the responses for institutions that they are aware of but do not currently use, making it a reputation-based ranking.

There are consistencies among the winning community banks that can be used as a guide to improve your community bank CX:

Community Involvement

Community Banks who earn Banking Choice awards are among the most active in their communities. But they’re not just active – they know how to make sure their community involvement is visible to the community so that the people they serve are aware of the efforts they make to support them. Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Technology

Winning community banks not only offer the same technology to their customers as larger banks but also have ensured their employees are trained to use it and can help members navigate it – without losing the personal touch that sets them apart. Staff training is typically one of the top reasons that people decide to switch banks, according to our benchmarks.

Personalized Service

Banking choice award winners are adept at providing exceptional customer service. They pride themselves on their ability to know their customers well, make more informed and faster decisions to help them with their financial needs. They know their customers. 

Customer Experience

What we’ve learned from our benchmarks is that not even better rates can pull a customer away when they feel valued and listened to by their community bank. In fact, customer experience is the most important differentiator. Customers will pay more for better service.

You Can’t Take Advantage of the Opportunity without Knowing Where You Stand

With 1.24 million customers ready to switch banks, there is a lot of opportunity for community banks and credit unions to grow, but it’s going to take not only delivering on customer experience but knowing where your bank stands in comparison to your competition. When you know what your customers and prospects think of your bank, you can make informed decisions to attract more loyal banking customers. Request your benchmarks now.

Community Banks and Credit Unions Can Gain Market Share with 1.24M Households in Play

Community banks and credit unions have a lot of opportunity to grow their market share, according to our most recent benchmarks. Whether it’s through growing loyalty or demonstrating a better understanding of gender differentiation in bank marketing,  opportunity abounds.

In New Jersey and Pennsylvania, there has been a sharp rise in the amount of market share in play. A shocking 1.24 million households across New Jersey and Pennsylvania are currently looking for a new bank. Two-thirds of bank customers in this region are up for grabs. This represents enormous potential for the savvy community bank or credit union manager who takes the time to understand why they’re unhappy where they are – and of course, it represents a big risk for those institutions that will be losing more than their fair share of current customers.

The most important differentiator community banks and credit unions have is their ability to deliver an excellent customer experience. When bank customers feel valued, listened to, and cared about at their bank, not even better rates can pull them away. This isn’t just speculation – it’s backed up by the numbers. Just like today’s retail consumer and today’s traveler, today’s bank customer is willing to pay more for a better customer experience.

What Does Today’s Bank Customer Want?

Our benchmarks are a massive scientific study across several states in which we interview hundreds of thousands of consumers and businesses about the banking institutions they use, asking them to evaluate each of the banks and credit unions they use on 53 different metrics. Today’s bank customer:

  • Expects your community bank or credit union to have the best technology and be as innovative as big banks
  • To deliver a more personal and more customized experience in which they feel known, recognized, and valued
  • To have a consistent experience across all touchpoints

What Don’t Bank Customers Want?

Bank customers don’t want runaround. They expect your staff to know how to use all of your product. They don’t want to repeat themselves because they called in, then visited a branch. They don’t want to work with poorly trained staff who can’t answer their questions. Read more about avoiding customer flight in the winter 2019 edition of Banking Mid Atlantic.

You Can’t Take Advantage of the Opportunity without Knowing Where You Stand

Our latest benchmarks make one thing clear: There is a lot of opportunity for community banks and credit unions to grow, but it’s going to take not only delivering on customer experience but knowing where your bank stands in comparison to your competition. When you know what your customers and prospects think of your bank, you can make informed decisions to attract more loyal banking customers. Request your benchmarks now.

Gender Differences in Banking

gender differences in banking

Our latest benchmarks revealed some interesting gender differences in banking: Women across the Northeast are about 10% more likely than men to prefer electronic banking over branch or phone. Furthermore, they are better at their male counterparts at figuring out how to use the tools, and they are moving more rapidly away from the branch. 

What does this mean for your bank?

If you are thinking of upgrading your online or mobile technology, you might want to keep Jane Q. Public in mind (rather than John Q. Public). As a community bank or credit union trying to attract additional bank customers, these kinds of insights are invaluable for making strategic decisions about where to invest in your bank.

Women generate more ROI

The lifetime value your bank customer varies by gender; the average lifetime value of a female customer is $308 higher than that of a male. Women are also more likely to consolidate all of their banking and remain loyal to the bank. 

For more insight into gender differences in bank customers, read Bruce’s article in Banking New England Jan/Feb 2019. In the article, he discusses why community banks and credit unions need to make sure they are doing what they should to cultivate female customers.

Banking New England takes a look at both the importance of women as bank customers and how banks can solve the gender problem in leadership.

Customer Experience Solutions analyzed over a half million reviews from men and women to discover differences by gender in banking across the region.

Request your benchmarks now.

The Factor that Impacts Bank Customer Loyalty the Most

The latest Banking Benchmarks came out the end of January, and there were clear indicators about overall banking strategies community bank and credit union managers should employ to maintain and grow in their markets. To understand where your bank specifically rates and ranks vs local competitors, be sure to request yours.

The One Factor that Determines Loyalty Above All

The most recent Benchmarks reflect that the most important differentiator community banks and credit unions have is their ability to deliver excellent customer experience.

CESCX Bank Customer Loyalty

Out of more than a million reviews, only about one-third of households and business can be classified as loyal. Loyalty is down significantly over the past 18 months. 

How Do We Measure Bank Loyalty?

Loyal consumers are those that have given the vast majority of their banking business to just one bank and are planning on giving the vast majority of their future business to the same bank.  These are customers or members that, barring any big unexpected problems, are going to be with you for at least the next 5 years. Statistically speaking, it is impossible to predict out longer than 5 years because of vagaries in the economy, people moving, changing jobs, etc.

What Can My Bank Do to Improve Customer Experience?

To improve your community bank customer service experience and generate more loyalty from your bank customers, we recommend this 7-step approach:

1. Compete with technology.

Customers expect even the smallest banks to compete well on technology. It’s an expectation, so if you fall short, you will lose share. But because technology is so ubiquitous, it also cannot be what you hinge your differentiation on. You need it, but you need more.

2. Consistency from every touchpoint.

No matter how your customer reaches you – phone, website, drive-through, walk-in, phone call – every experience should feel seamless and focused. Everyone should be on the same page about your services, and every single person who has any potential of coming into contact with your customers should deliver exceptional customer service and know how to use all of your technology.

3. Make your bank customers feel welcome.

Don’t forget the community in your community bank. When customers do walk in, they aren’t looking for an austere, corporate climate. They want smiling faces and people who know them by name.

4. Your employees should know how to bank at your bank.

As we interviewed thousands of banking customers, we discovered that staff training is typically one of the top reasons that people decide to switch banks.  Your staff – all of them – should be able to answer questions and demonstrate a clear understanding of existing technology.

5. Build a culture of customer service.

Nearly all bank managers think they prioritize service, but our surveys reveal that at least a third of customers report getting the runaround. Getting the runaround is a major reason households and businesses tell us they want to switch banks. Customer service has to be a culture in your bank from the top down.

6. Get personal.

What sets community banks and credit unions apart from big banks is that they can compete technologically while still being personal. When your banker is also your neighbor, has kids in the same schools, and understands the challenges of your specific community, it makes a difference.

7. Community involvement.

The customer experience is driven by your involvement in the community. Sponsor local teams and celebrate regional traditions. Reinforce that you are an important part of the community. And take every opportunity to promote what you do. Our surveys show that when a community contribution is accompanied by marketing spend to promote it, the impact to the bottom line can grow by more than 350%.

Want to know the specifics about your bank?

To understand where your bank specifically rates and ranks vs local competitors, be sure to request your benchmarks.

Why XX Should Mark the Spot of Your Banking Outreach

banking new england jan feb bruce paul
Image Source: Banking New England Jan/Feb 2019

In the latest issue of Banking New England, Bruce Paul discusses why community banks and credit unions need to make sure they are doing what they should to cultivate female customers.

Banking New England takes a look at both the importance of women as bank customers and how banks can solve the gender problem in leadership.

Customer Experience Solutions analyzed over a half million reviews from men and women to discover differences by gender in banking across the region.

Read the full article in Banking New England Jan/Feb 2019.

3 Ways to Grow Your Community Bank or Credit Union without a Big Budget

3 Ways to Grow Your Community Bank or Credit Union without a Big Budget

If you’re a community bank or credit union leader, you know that growth is key to success. In fact, the survival of your bank depends how well you grow your revenues.

Growth depends on understanding your current customers and your potential customers, their needs, and how to provide for those needs. For your customers, it means understanding how they are experiencing the bank, and what more do they need and want. For your prospects, it means understanding what their current bank is NOT providing and communicating clearly that you can do a better job.

It does not need to cost a lot of money to understand their needs, nor does it have to take millions of advertising dollars to communicate your ability to meet those needs. Below are some of the methods that don’t cost much and have a great ROI.

Grow Your Community Bank with Community Involvement

There’s no doubt that one of the big differentiators for community banks and credit unions is their ability to be more involved in the local community. And while we’ve talked about it before, you’d be surprised at how many community banks still don’t take advantage of this easy way to grow. From sponsoring a local sports club to working with a local charity, there’s no better way to connect with your customers and potential customers in a meaningful way.  This is especially important for attracting new commercial customers, because of the nature of the business. When their lines or loans at another institution come up for renewal every few years, most businesses want to get a competitive bid or two. But how do they decide who gets a shot? Word-of-mouth can be important, but so can high-profile community contribution. To be clear, a business is not likely to pay you a couple hundred extra basis points on a loan just because you sponsor the local parade, but it just might get you in the door to win a deal at par.

Grow Your Community Bank through Networking

As a local community bank manager, not only should your bank be a part of the local Chamber of Commerce, but you should be attending the meetings each month. Connect with other business people in the community and learn from them. Not only is it possible to gain more business customers from being more connected with them, but you can also learn more about their customers – your bank consumers.  And remember, the vast majority of new business that comes from networking is NOT direct business but from referrals from the people you contact.  So don’t make the mistake of trying to be pushy with the people you meet.  It is better to be helpful, because then they will think of you the next time, they hear of someone with a need.

Grow Your Community Bank with Collaboration

Don’t dismiss the possibility of being able to collaborate with other local businesses. From being on-site at a car dealership to assist with loans during a big sale to working with a local SCORE office to provide financial advice to new business owners, you can do so much to simply be visible in your community without spending a ton on advertising.

You can grow your community bank or credit union without breaking the bank to do it. The key is to project the message that resonates with potential and current customer needs. Don’t waste your time promoting your new technology if everyone is already happy with the technology they have. Don’t waste your efforts promoting how non-pushy your staff is, if local prospects actually want more proactivity and think their bank is not pushy enough. The most eloquently crafted message is useless if it does not sync up with an exact need.

Not sure what the key needs are for potential customers in your trade area? We can tell you exactly. Our local bank benchmarks give community banks the insights they need to customize their marketing, retain their customers, and attract new customers. We would be happy to provide information on your trade area and on your bank; please contact us by email at info@cescx.com or by phone at 203-906-8923 to request a copy of your report or to discuss subscription options.

Customer Experience Solutions Benchmarks Highlighted in Banking Mid Atlantic

As the most recent banking benchmarks reflect, the most important differentiator community banks and credit unions have is their ability to deliver an excellent customer experience. When bank customers feel valued, listened to, and cared about at their bank, not even better rates can pull them away. Unfortunately, only a little more than one-third of the banking customers surveyed (over one million responses) are “highly loyal.”

This means two-thirds of banking customers throughout the northeast market are looking for a new bank. To make sure your customers aren’t the ones looking – and to attract the ones who are looking – you need to understand what your customers and prospects think of your bank.

New benchmarks are now available – request yours now.

Read the highlights about New Jersey’s and Pennsylvania’s banking benchmarks in the winter 2019 edition of Banking Mid Atlantic.

 

 

Competing for Customers, Community-Bank Style

competing community bank styleIn the battle for wooing banking customers, large banks are starting to lose out to community banks. It’s no longer the lowest interest rates that get people in the door; customers must be able to trust who they’re banking with. Banking is becoming significantly more competitive, with a customer base that desires an experience over a service, and larger banks are having a more difficult time adjusting.

Competitive rates don’t sell.

In a banking industry that now offers accessibility to consumers nationwide, competitive rates are no longer the biggest competitive advantage. When everyone offers competitive rates, the interest on loans or deposits are not as much of a driving force as they used to be.

Consumers seek financial partners.

Delivering on banking technology is a given, but community banks can leverage what has always been a bestseller: relationships. Community banks and credit unions can offer loans to consumers that big banks may not be able to offer. More than that, community banks and credit unions offer mutual trust. Customers are able to walk into a local branch and speak with a trusted adviser – possibly even a neighbor – about how to best invest an inheritance or whether to refinance their home.

Customer relationships are the winning ticket.

Community banks know the needs of their customers and can better serve them as a result. Cross-selling bank services to consumers that are already loyal significantly lowers customer-acquisition costs and boosts your reputation as a reliable banker. Consumers respond to convenience, but they also seek value in the services they are receiving. Tailoring services directly to consumers is how community banks stay relevant.

Stay true to your brand.

It can be tempting to copy the marketing strategy of larger banks, but that won’t maintain existing customers or attract new customers when there are so many options available. You need to find what makes your community bank unique and use that as your competitive edge. Seek out benefits, beyond low interest rates, that will peak the interests of consumers – and understand who you’re trying to connect with in your community.

Pricing structures, fees, and products must be relevant to those you serve, but you also must have a differentiator. Community banks can offer more personalized services that resonate with individual customers, luring them away from larger banks.

There is enormous opportunity for you to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.

5 Ways Social Media Can Enhance Your Community Bank’s Brand

Social media offers value for most businesses, and community banks are no exception. Social media can provide another opportunity for community banks to engage with consumers. Strategic social communication can boost your community bank’s brand and image – and as more consumers expect you to utilize social networking, your social media presence is becoming more necessary.

  1. Social media helps manage your messaging.

Whether your community bank is using one or more social media platforms doesn’t matter; your consumers are, and they have things to say. Both positive and negative experiences will be shared via social media, and it is up to you to manage the messaging being generated by your consumers. Your audience will have their own perceptions, but without a social media platform from which you can leverage influential stories, you have no control over the direction of your brand. Social media drives awareness, and it is up to your community bank to effectively manipulate the tools available.

  1. Social media provides strategic marketing outlets for promotions.

Social channels give community banks the opportunity to sell banking services and engage audiences at the same time. With a bit of creativity, unique social selling efforts can deliver extensive ROI. Create a referral program for new checking accounts that awards current patrons for every shared post, or simply highlight ongoing sales that reflect the needs of your community. Social media can be used to generate interest in your services and get people walking through the door.

  1. Social media fosters deeper community outreach.

Social media is about connection, which is where community banks can truly excel. Getting recognition for your efforts to be involved in the community can be difficult, but social media makes it easier. Sharing photos of your most recent scholarship recipients or of your team volunteering at a local shelter can foster positive feelings. Showing community support demonstrates who you are as a brand and gives you the opportunity to reiterate what matters most to your banking customers.

  1. Social media humanizes your digital presence.

This is the perfect opportunity to get personal, and we aren’t just referring to shared photos of favorite family pets. Consumers want to also know what your community bank stands for. We’ve seen highly engaging community banks do the following:

  • Allow bank employees to choose a cause of the month and highlight why the cause is important to them personally. For every share, your bank can promise a specified amount that will be donated to that cause.
  • Highlight community involvement, such as a local nonprofit or sports team your bank sponsors.
  • Announce new services, technology upgrades, and specials.
  • Share community news.

Social media is about so much more than selling banking services, because your customers want to know the people behind the bank counter.

  1. Social media marketing boosts engagement.

The most intriguing aspect about social media is the ability to celebrate anything. Consumers love to share exciting news, and you should figure out what you can celebrate with your community today. Is it a birthday of a well-known bank teller or the anniversary of your branch opening? Have customers stop in to share a happy birthday message and a free cupcake. Take note of annual dates in your community that hold importance and acknowledge any historical relevance. Regardless of how you choose to create excitement, share it on social media.

Social media is a powerful tool for community banks, and it is one piece of the larger marketing puzzle. Community banks are known for their unique ability to connect with their customers on a personal basis, and social media takes that advantage to new heights. Consumers already expect that your services are accessible from anywhere, but your entire bank must also be present on popular social channels.

 

Consumers Are Looking for These 3 Digital Banking Services

Community banks have a lot of advantages over their larger counterparts, but that’s no reason to slack on technology. Regardless of the size of the bank, consumers expect certain digital banking services. Luckily for smaller banks and credit unions, the latest Benchmarks reveal that most households and businesses assume smaller institutions have about the same quality digital tools as the largest banks. Beyond delivering amazing customer service and employing strong community engagement practices, be sure these digital banking services are up to speed:

  1. Mobile Banking

A rapidly growing percent of consumers want everything accessible on a mobile device. The latest CES Banking Benchmarks reveal that 64% of consumers expect to increase their mobile and online banking in the next 12 months. Although you want your customers to feel comfortable coming into the branch, they shouldn’t have to come in for routine transactions if they don’t want to. Remote transfer, bill pay, and remote deposit have grown by up to 35% per year at some of the more proactive institutions. Person-to-person (P2P) payments are also more popular than ever, with friends using Venmo and PayPal to cover a shared cab rather than exchange cash. It’s essential that your mobile app can communicate with the preferred apps of your consumers, making every monetary transaction as easy as possible.

  1. Financial Planning

Consumers want more from their bank than the exchange of money. Financial planning is high on the list of what community banks should be offering, and this shouldn’t be limited to an in-person visit with a representative. Give your consumers the freedom to use files stored on their personal devices to make comparisons with your website or app. Budgeting, loan calculators, and tax preparation are only a few financial planning tools that are valuable to your customers. And once they start using these tools with your bank, they are far more likely to use your value-added services in the future.

  1. Online Account Management

Community banks can’t afford to forget about basic account management services. There’s nothing more annoying than having to fill out paperwork for something like a change of mailing address when it should be something the customer can do online. Allow your consumers the flexibility to make changes to their account digitally, without the hassle of paperwork or a trip to your branch. It should be easy to change contact information, switch mailing addresses, and check balances of different accounts. It may seem like common sense, especially since convenience is valuable to your consumer base, but these basic functions are often overlooked or not properly developed.

Bank technology is easily available, and it doesn’t take much to implement tools that make a difference to your customers.  An oft-forgotten aspect of employing banking technology is how important it is to educate your own employees on how to use them.  If your employees do not know how to use the technology you offer your customers, you can be assured that your customers question how good your bank really is if the employees don’t know how to bank there. During the interviews CES conducts for the Benchmarks, we see thousands of comments from customers who question the quality of their bank when they believe the bank’s staff themselves are not expert users of the banks’ technology.

An investment in digital banking services is no longer an option if your community bank wants to remain competitive. Community banks should always leverage their unique position as a member of the local community, but they must also deliver the level of functionality consumers expect from every bank large or small.

There is enormous opportunity for you to grow your community bank or credit union, but it starts with knowing what existing customers and prospects think of you compared to your competitors. Take action now and request our benchmark study for your region.