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Community Bank Challenges: Providing a Personal Touch in a Digital Environment

By now your customers already assume that any community bank or credit union can handle basic transactional functions associated with banking and have technology on par with the big banks. So, how can you further meet the expectations of your customers, succeeding where larger banks may fail? Where community banks can compete with – and ultimately excel beyond – the competition, is by balancing personal service and customer experience with the digital component.

Digital banking is important, but it’s not the crux of a successful branch.

Most adults would prefer to do their transactional banking online or by using a mobile app—our Benchmark surveys show that ranges from 55 to 75% of banked adults, depending on the town or city they live in. Transferring funds, checking balances, depositing checks, and completing similar transactions can all be handled comfortably without human interaction. These recurring tasks are not when consumers need or want their banking professionals. Most banked adults, and businesses, prefer to perform these tasks electronically (yes, even Baby Boomers), so you can deploy your personnel resources elsewhere.

Important interactions require a human touch.

Although an ATM or mobile app can handle most monetary transactions, the results of tens of thousands of interviews confirm that banked adults want to work with a person for more complex interactions. Don’t be swayed by the assumption that millennials rely solely on technology, because our latest Benchmark results which includes tens of thousands of millennials in addition to Baby Boomers and everyone else in between, clearly shoe that millennials want a personal touch for complex banking interactions.

Consumers across multiple generations seek personal, customized, human interaction for:

  • personal financial advice
  • assurance that they are protected against fraud
  • information about new products that could improve their financial well being
  • guidance on how to handle their next loan
  • better understanding of how their credit impacts being approved for a mortgage
  • advice on whether they should apply for another credit card

These are some of the important interactions for which a customer needs the support of an experienced banking professional. Focusing only on marketing your digital capabilities won’t communicate to current and potential customers the degree to which you can meet their needs as a personal financial advisor or provide hands-on customer experience.

It is important to remember the “personal interaction” encompasses both the branch as well as the phone, where customers can talk personally to someone who is trying to help them.  Too often we see community bank customers happy with the in-branch service, but unhappy with the phone assistance.  It is not uncommon for us to learn from customers in our interviews that the only reason they went into the branch for advice is because the call center they initially tried was inadequate.  This can lead a community bank to the false conclusion that their personal assistance is adequate when it is not.  This is one other reason it is crucial to track your performance across all channels.  You cannot improve what you cannot measure.

Improve your servicing image to attract customers.

Community banks must separate themselves from the digital rush and broadcast what is unique about their services, drawing a distinction between them and what big banks may provide. Emphasize the personal approach that a local community bank can offer. A successful bank competently provides both digital and personal services, but it is the balance of the two that defines the accomplishment. Find out where you stand with your customers and push beyond the obvious expectations of a functioning digital interface.

Round out your professional servicing image, emphasizing the community and how your branch can contribute to individual needs. Market your community bank by demonstrating how your bank can assist the community in reaching their financial goals – and employ the staff to back up those claims.

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.

Hitting the Right Note with Community Bank Marketing

Community bank marketing requires a comprehensive strategy delivered to a targeted audience, but this is not as simple as replicating the marketing strategies of the banking giants. Forget about advertising the fact that you have technology that every customer expects you to have in the first place. Instead, find ways to differentiate your bank from big banks and competitor community banks. Your strategy needs to emphasize what you do best. What makes your community bank special?

Hyping technology is not effective.

The first effort many banks make with their marketing strategy is to emphasize their use of current technologies. Mobile banking and chatbots are no longer new to the banking industry, and within competitive markets, consumers don’t differentiate among which banks have what technology. They simply assume that all banks have decent technological capabilities, regardless of the size of the branch. And if you don’t, it’s to your peril.

Our ad recall research has even shown that although adults can correctly identify the intent of tech-focused bank ads like billboards, they usually can’t recall which bank the ad was for. So as a result, consumers are simply getting the message: banks are good at technology.  This results in wasted marketing dollars that could be put to better use on a more effective initiative. Your larger competitors are improving the image of technology within the banking industry, which allows community banks to benefit from the net impression that all banks have strong technology.

In addition, our Benchmarks show that technology is not even among the top 5 reasons people are dissatisfied with their current bank and want to switch. Responsiveness, getting the runaround, proactivity, and banking knowledge of the staff are all significantly more likely to drive away customers.  Don’t be fooled when a firm trying to sell you technology tells you that technology is the main reason people choose a new bank.  It simply is not the case. These firms ask consumers leading questions to get that answer. If you think about it, safety and security trumps everything else when choosing a bank, but people do not choose based upon that because they have the tacit assumption that all banks offer the same level of safety and security. Technology is now the same in market after market.  Our Benchmarks currently cover 109 markets and in over 75% of those, prospects see very little technological differentiation in most of the banks (and credit unions).

Market your community engagement.

Community banks are adept at moving their community engagement beyond donations to local charities and local sports sponsorships. But what happens when you are heavily involved in your community and no one knows it? One of the most beneficial marketing efforts you can have is to make sure people know about your involvement in the community.  This is doubly important in attracting the profitable new commercial customers.  Being a strong community contributor is a major reason you might be invited to compete for a company’s new line or loan.  True, no company will pay you an extra 400 basis points just because you support the local homeless shelter, but it can at least get you in the consideration set.

Market to the individual needs of consumers.

How are you managing individual customer relationships? By learning the habits, needs, and wants of your customers and prospects, you can provide better service by recommending products that are useful. Whether customers want to know how their spending habits are affecting their credit or how they can improve their chances of getting a loan to buy their first homes, when you deliver a personalized customer experience, you have the potential to outgrow your competitors by more than 100%.

Consumers don’t want to hear about the latest technology; they’ll assume you have it as a matter of course. What they want is to know that their banks can provide a reliable, knowledgeable service without getting the runaround to find basic answers. Rather than market technology, put your efforts towards a strategy that will have the best returns. Determine what sets your bank apart from others, and market that which is unique about how you do business.

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.

Community Banks: Are Your Customers Cheating on You?

As a community bank, you might think your customer is loyal and devoted. Many of them are, but are you doing everything necessary to keep your current customer from “cheating” on you? There’s more going on behind your back than you might think: 11% of banked adults say they will change banks in the next 6 months. Community banks may find that previously loyal customers are cheating on them with competitors, and it’s not rates that lure them away.

What’s the primary reason your customers are cheating on you? It’s the runaround. Some community banks struggle to answer basic questions, and customers find that they are having to speak to multiple staff to get the answers they seek. For some banks, up to 45% of their customers report getting the runaround from their current bank.

How to Keep Your Customers from Cheating on You

Needless to say, a large percentage of customers are currently shopping for a new bank. For a few high-performing banks, less than 5% of their customers report having to ask multiple staff to get their questions answered.  High-performing banks have much higher loyalty levels, because customers are confident that they can easily access information.

Deliver on customer experience with no runaround.

To keep your community bank customers from slipping away, take the issue of runaround seriously. Make sure your staff is well-trained; increase the emphasis you place on customer service and customer experience. Large or small, a bank that treats its customers like more than numbers on a ledger increases loyalty.

Embrace the digital era.

Technology is essential banks must make available mobile apps and tools that provide ease of use for transactional needs but access to information as well. Delivery channels are expected to be easily accessible, whether the customer is using a computer, tablet, or mobile device. Make sure all the most important information is available to your customers online, through your banking app, and on your website.

Provide a personalized experience.

Although emerging generations may demand enhanced technological capabilities from their community banks, all generations demand a personalized experience. Not only do customers want banks to remember their individual preferences, but they are seeking wealth-building and money-saving tips from their local branches.

Understanding why your customers might be cheating on you is the first step in preventing it from becoming an issue. Build loyalty and strengthen your relationship with your customers by providing them access to well-trained, customer-focused staff; high-end technological solutions; and answers to the questions they ask – the first time.

If you want to know what percent of your customers are cheating on you, and what percentage are currently looking around, let us know and we can tell you.*

 

*Our customer experience benchmarks track the loyalty and vulnerability of every bank’s customers (including the percent that are currently shopping around). If you are a bank or credit union in the Northeast, we already conduct interviews with your customers.  If you would like to see your customer experience results please contact us.

Insights from our Recent Bank Benchmark Surveys

Customer Experience Solutions, LLC conducts a comprehensive scientific statewide survey of banking customers twice per year, in Spring and Fall. The Customer Benchmark focuses on how your customers rate your bank, and how those ratings compare to your competition. The Prospect Benchmark focuses on how your prospects (non-customers) view your bank and how you might gain their business. We gather millions of ratings from your customers and your competitors’ customers every year.

The 2018 results have just come out across the Northeast, and here are some of the latest findings:

  • Technology is becoming less and less of a differentiator. Over time, we have seen customers’ perceptions change as they relate to technology. Five or six years ago, customers assumed there was a big gap between big banks and small banks in terms of technology and the use of digital tools. While that still exists to some extent, that gap has closed significantly. As a matter of fact, in most local markets in the Northeast, there is at least one community bank that is rated higher than most national, super-regional, and regional banks in that market. Contact us and let us tell you if you are that bank.
  • Technology is more about convenience than saving money. While that might seem obvious, it is important to know that banked adults across the region are conducting more and more financial transactions electronically. That does not, however, diminish the importance they place on relationships with the bank. As a matter of fact, this trend toward electronic banking is benefiting a lot of community banks that see it as a way to eliminate the more trivial interactions, and to embrace the fact that the in-person interactions are now much more valuable because they are far more likely to be on a subject that is substantive and truly important to the customer. Whereas most community banker-customer interactions were transactional ten years ago, the majority of banker-customer interactions are now focused on solving problems, planning, or creating greater financial well-being.
  • The vast majority of customers do not want a 100% transactional relationship with their banks. They want proactivity instead. Proactivity is one of the key drivers of customer service in the eyes of customers. They increasingly want a bank that will suggest new ideas and products. And contrary to popular belief among community banks, customers are willing to tolerate a little bit of pushiness from time to time, if they sometimes see the positive outcomes . The key issue is about striking the right balance. For example, in the latest benchmarks for New York State, 9% of customers said their banks were too pushy, but 29% said their banks were not proactive enough. These numbers can vary from bank to bank, so it is important to know where you stand with your customers. But the lesson is clear: Erring on the side of passivity is not a good way to satisfy your customers or grow your market share.
  • Customers need to feel secure. Bank security is a big deal today, so your customers should always know that you are using cutting-edge security protocols to keep their information safe. But you should also make them feel secure in their decision to bank with you by being knowledgeable – not just about checking and savings accounts but about all of their financial needs, from investing to mortgages to annuities. This is very clear from the latest benchmark results in New Jersey. A full 7% of banked adults said that they did not feel their money was safe at their current primary bank. For the banks that ranked higher than this, fixing this perception is a matter of survival.

There is enormous opportunity for you to improve your ability 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.

How Can Your Community Bank Outgrow Competitors by 100%?

Did you know that one of the biggest ways you can become more competitive as a community bank is to provide a better customer experience and better customer service? It seems simple, doesn’t it? Just give great service, provide a great experience, and watch your business grow. But of course, only one bank per community can actually be #1.

Unfortunately, providing exceptional customer service is not as simple as it seems for a number of reasons. But the biggest reason community banks and credit unions aren’t competing more effectively is that about 95% of them believe that they’re already giving the best customer service and experience. This problem is compounded by the disconnect that happens between what banks say and what they do. Ninety-six percent of bank CEOs say that customer experience is a top priority; however, when you ask on-the-ground managers who are charged with providing that experience, only 40% say that the customer experience is actually a day-to-day priority at their banks.

What We Know about Your Bank Customers that You Might Not Know

Your customers don’t always complain. How do we know? We ask them. When we collect the hundreds of thousands of ratings directly from customers to form our benchmarks, we ask them whether or not they have experienced a significant problem with their banks in the last 6 months. On average, 13% of those customers across the Northeast said that they had, and at the individual bank or branch level, the percentage was as high as 40%. The problems ranged from errors on statements to mobile app issues to rude tellers.

We asked the customers surveyed if they had told their banks about the problems they had experienced. The sobering truth is that over 50% of them said that they had not told their banks. That means they are upset with their banks, but they are keeping it to themselves. Quite often, this makes customers susceptible to the  next $200 offer to open an account elsewhere. They may even be actively looking to end their relationships in their entirety. As every banker knows, customers almost never say goodbye; they simply stop engaging. They open new accounts elsewhere, and they slowly draw down their balances until the banks are left with empty sleeper accounts. In 2017, 11% of US consumers changed their primary banks, and almost never did their banks see it coming until it was too late.

The way to understand the satisfaction—and vulnerability—of your customer base is not actually that difficult: you ask them. On a regular basis. You can do that internally, by recurrently surveying a representative sample of your customers. The drawback with that method is what is called respondent bias. If you ask 1,000 of your customers for their feedback via a mail survey, an email survey, or a phone survey, who do you think will respond? The very happy customers will respond. The very unhappy customers will respond. But the ones in the middle are far less likely to respond, so the result is a partial view of your customer feedback at best and a highly inaccurate one at worst.

A better and more accurate way of gathering customer experience feedback is by using a third-party, objective source that does more than survey the happiest and unhappiest customers. This can be done by targeting all customers (your and your competitors’) though a random population survey. In that way, happy customers, unhappy customers, and everyone in between are proportionately likely to give their feedback. You end up with a far-more accurate, far-less skewed picture of your customer base. This approach has the added advantage of possibly providing your results in comparison to your competitors, so you can see if you really are beating the competition. This approach is also typically much cheaper than a single-bank approach, since the costs are shared across many banks. On the flip side, the disadvantage is that you typically cannot customize the individual questions if you have a large market research department that prefers to create and distribute its own surveys.

Delivering on Customer Service

Your bank can grow 100% faster than the competition if you simply focus on delivering exceptional customer experiences. But you can’t just assume your bank is already doing that. Nearly 95% of banks think they are exceeding their customers’ expectations and doing so better than the competitor across the street. But such an assumption is not based on fact. There is enormous opportunity to improve your ability 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.

2018 Community Bank Marketing Trends

Community banks are cornerstones of their local markets, and the 2018 trends in our benchmarks continue to reveal opportunities for success. Community banks must be ready to embrace changes, particularly in the realm of technology, to step up their competition with the big banks. Size is no excuse, with technology being readily available to banks of all sizes, and lack of training is not a good excuse either. No longer can smaller banks cede the higher ground to the larger banks.

In our latest Prospect Benchmark results, we have seen that the technology gap between big and small banks is narrowing. While this a result of what is happening inside the banks themselves, as the smaller banks continue to improve managed services, there is a tightening of the gap in a place at least as important: in the minds of consumers.

Below is a specific example of what I mean. In New London County, CT, retail customers were asked what they thought the technological capabilities were of all the banks they do not use. As you can see from the chart, they see very little differentiation between the big banks, the small banks, and even the credit unions. Consumers believe more and more that there is little or no difference in tech capabilities between institutions – and they are right.

Chatbots are the future of communication.

By 2020, it is expected that 85% of consumers’ interactions will occur via chatbots. As they can be accessed by any social channel, website, or app, chatbots are essential to communicating with both millennial consumers and the emerging Gen Z consumers. They can also be programmed to provide personalized answers and offer predictable information such as account balances, spending activities, and bill pay reports. Artificial intelligence is at the center of emerging trends for every industry, and banking is not excluded.  Smaller banks need to stay on top of this trend to ensure that, in the eyes of potential customers, they are keeping up with the market.

Micro-moments will determine your reach.

With most consumers checking their phones regularly as it is, your bank should be available to take advantage of customer reach regardless of when your banking information is accessed.  Many decisions are made impulsively, and it could be as simple as someone searching for banking opportunities in your area. Based on our most recent benchmark results, 47% of adults in the Northeast are currently looking for at least one new banking product.  While this percentage varies (with some counties at almost 60%), that means there is a very large amount of potential market share in play right now.  It will be up to you as a community bank to decide who will come up first in the search engine with the right answer: you or the big bank around the corner?

Cross-departmental integration is the key to success.

It’s no longer enough for community banks to rely on separate departments to reach overall business goals. To achieve success, collaboration between departments is an absolute must. With the customer experience, not necessarily the services provided, becoming the center of attention, everyone must work together to meet new expectations. This is particularly important for community banks that do not have the same upper management resources as big banks. Collaboration will be that which evens the playing field.

Over the past few years, we have seen that the quality of what I call “quarterbacking” is becoming ever more important, especially for commercial customers.  A decade or two ago, commercial customers relied on their loan officers to be the font of all knowledge.  And those loan officers very rarely introduced customers to their colleagues.  However, starting with younger business professionals a few years ago, the value of the team started growing in importance.  The commercial relationship managers who were able to display a broad team of experts – as opposed to functioning as one-stop shops themselves – started to become more successful. That is now the case, not just among younger customers, but baby boomers as well. They too see the value of a broad team, instead of a funnel leading to one person. Successful quarterbacking is now one of the major drivers of success for banks both big and small. As an added benefit, if a commercial customer sees value in the entire bank team, they are much less likely to leave if the regional manager moves on or retires.

Digital specialists are what’s missing from your team.

Digital marketing is at the forefront of 2018, and banks would be ill-advised to not invest in this industry. According to the latest benchmark results, when customers begin looking for new banking products, 55% say they start by searching on Google.  This can lead them to you or to your competition.

It is the era of social media, and if your community bank is not present on social platforms and in other digital arenas, you will not show up in searches, and the big banks will drown out all attempts at engagement. Community banks are no longer able to rely on friendly contacts that occur in person, and most consider employing digital specialists that can heighten their online marketing strategies. A digital specialist can also assist in making sense of the data that is now required to fuel a marketing strategy to effectively reach your target audience.  The most progressive banks have dedicated professionals focused on reacting to social media posts and questions, and monitoring what is happening among competitors’ customers.

The foundation is being laid for community banks to excel in 2018, but such achievement will not be realized without effort. Understanding the latest trends will be the first stepping stone towards your business growth and how you can leverage the resources available to you.

There is enormous opportunity to improve your ability 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.

Community Banks And CUs Deserve Recognition For Community Involvement

The latest results of the Q2 Massachusetts Banking Prospect Benchmark, which collects the perceptions of non-members, show that community contribution increases prospects’ consideration by an average of 116 percent for credit unions and 112 percent for banks. For smaller institutions with lower brand awareness, the increases are even higher.

All of the data cited in this article is based on a study from Customer Experience Solutions that gathered 47,765 responses for financial institutions from residents across the state in June 2017.

The contributions a bank or credit union makes to its community have two strong benefits for the institution itself:

  1. The first is the influence on prospects, or non-members and non-customers. Many prospects learn about community financial institutions from advertising or from community involvement.
  2. The second impact that community contribution has on a financial institution’s business is on its current members and customers. When current customers see their institution’s involvement in the community, it can improve the esteem they already have for the institution.

Our research has shown that the positive impact can increase their loyalty, meaning they are less likely to leave and more likely to increase long-term spending. The latest Massachusetts Banking Customer Benchmark report (that gathers the input of each credit union’s own members) showed that recognition of community contribution increases members’ share of wallet significantly with their credit union and their long-term loyalty goes up by 81 percent. That figure was even higher for banks at 97 percent.

Community Contribution Increases Loyalty

We found in our research two financial institutions in one specific market with equivalent amounts of community involvement in terms of gifts to charity, hours volunteered by their staff, sponsorships, etc. However, one of the two was rated 275 percent higher in terms of community contribution by their respective customers and 388 percent higher by non-customers. While each did similar levels of community outreach effort, one was using much more efficient channels and co-opting local nonprofit partners to get the word out. Not coincidentally, the financial institution with the better outreach is currently achieving stronger growth in new customers, especially among businesses.

Get The Credit You Deserve

  1. Understand how you currently stand with members, customers and prospects, in your specific market and in relation to your competition. Do your current members and customers see and appreciate your good work? Do your prospects?
  2. Make reasoned adjustments and tweaks to the programs to see what the impact is. A financial institution may need to improve its community outreach to gain greater recognition, or it may need to emphasize different types of community involvement to broaden its exposure.
  3. Measure how much an institution’s internal changes are changing external recognition.
  4. Track the impact that the recognition is having on awareness of the institution and consideration to use it in the future. Tracking your ratings over time will show you exactly how your community contribution, and all other marketing efforts, are truly impacting how your prospects and members view you. This will allow you to fine tune your programs so you get the maximum benefit for the institution while doing the maximum good for the community.

So as you look forward to 2018, consider – what are you currently doing? Are you sure you are getting the credit you deserve? What can you do differently? And most importantly, what you can you do to make sure your current and prospective members are rewarding you for your good work?

Read the full article on Banker & Tradesman

Can Community Banks Compete with Big Banks on Electronic Banking?

Electronic banking is a disruptor to banks in much the same way that Amazon was to brick-and-mortar book stores when it first launched its online retail business. As a business owner, you either find a way to meet the level of service and convenience being offered, or you simply lose a piece of the market. Yet when so much is uncertain, including future economic security, how do you justify investing in technology when you’ve based your whole business platform on providing a personal touch?

Banking and technology have always been great partners.

Technology has always made banking more efficient and more profitable, and today’s fintech revolution is one of the fastest growing industries – worth over $12 billion. From the introduction of ATMs to check clearing and credit monitoring, technology makes banking easier for banks as well as their customers.

Fintech is a natural fit for community banks willing to make the investment. Some community bankers and credit unions avoid digital upgrades because they see them as threats rather than improvements that can make them more competitive in the industry. But most of the digital innovations available – payment apps, mobile wallets, online money management tools, mortgage loan apps – are simply enhancements to existing services.

It starts by recognizing that consumers want both the technology and the human touch.

Community banks have the opportunity to bring to their customers the best of both worlds: the personal, in-the-community, fabric-of-society human touch and the state-of-the-art technical convenience fintech allows. From online banking to mobile check deposits to customized apps, new technologies do not have to be a threat. And most consumers want both. They want to be able to come into their local branches, sit down and talk with someone, and know that there are human beings keeping their money safe. They also want to be able to bank at midnight, move money from one account to another from their phones, and make investment decisions while sitting in their living rooms watching TV. Based on our surveys, most millennials want the human touch when it comes to banking.  And most baby boomers want the convenience of electronic banking.  Why not give them both?

Community banks know their customers and can expand the innovation in fintech.

This is not merely pie in the sky. It’s happening on the ground as this is written. Some banks are choosing to build the reality themselves. Eastern Bank in Boston created an online lending platform that makes loans of up to $100,000, with decisions in minutes. Like many other banks that have developed some internal digital expertise, they now provide the solution externally and license it to other banks. And there are still plenty of high-quality managed services available in the market from the likes of Fiserv, FIS, Jack Henry, COCC, et al.

Community banks can embrace fintech without sacrificing their personalized, customer-driven focus, and these banks can indeed survive and thrive. Credit unions and community banks simply cannot rely solely on personal service as the entire premise of their existence when consumers clearly want more. They want not just personal service but personalized technology as well. Fintech is a solution that will open doors for community banks, allowing them to peel away less-than-satisfied big-bank customers who are ready for a best-of-both-worlds solution.

Community Banks: Big Bank Customers Are Waiting for Your Excellent Customer Service

One of the biggest myths out there is that community banks are always better at customer service than big banks. While this may be true in aggregate across the totality of the US, no community bank that I know of is competing on that level.  Every community bank competes on the local level, and the reality is that in over 75% of local markets that we cover in the Northeast, at least one big bank ranks in the top three in customer service. That means that in the vast majority of markets, community banks cannot say to local prospects that small banks always outshine the big guys.

Community banks may be more personal, more involved in the community, and more likely to know the people who bank with them, but if they’re not delivering on key service areas, they will struggle to compete with big banks in their community. In our latest New York benchmarks, more than 40 community banks across the state were rated lower in customer service by their own customers than any of the big banks in their market. So much for the service advantage.

Yet delivering on customer service should be low-hanging fruit for community banks as a way to compete with and take customers from the big banks, so if your community bank or credit union is getting bad marks on customer service, it’s an easy place to make rapid changes and retain the customers you have and attract new ones away from the big banks. Start with these three areas:

Improve Customer Service with Better Training

Employees who are knowledgeable about your bank’s products and services make banking customers feel confident that they are putting their money in good hands. Hire the best talent for your bank. You can teach banking, you cannot teach attitude or a true desire to help customers. Once you hire the right people, make sure your employees can answer questions, provide insight, and make recommendations that make sense for your customers, beyond just which checking account they should open. This sounds obvious, but both big and small banks often are not up to the task. In our latest survey, 38% of banked adults said their bank was not proactive enough in offering solutions. Customers are asking to be cross sold more! 

Improve Customer Service with Better Communication 

Not only do your customers and potential customers need to know that you’re capable of meeting all of their banking needs, but they need to know that you offer other financial services as well. From mortgages to retirement accounts, make sure your customers know you are more than just a place to have a Christmas savings account. In our latest survey, only about 50% of bank customers concentrate most of the banking with one bank, even though the vast majority say they want to consolidate. The two top reasons customers gave for not giving their primary bank all of their business were:

  • “I did not know they offered other products” and
  • “They never asked me.”

In several cases, well-meaning community banks were missing out on potential 25%-35% growth rates, simply by not being as proactive as their own customers were wanting.

All banks also need to make sure communications are effective in letting your target market know about your community involvement – one of the ways community banks and credit unions are able to set themselves apart from big banks. This is especially important in the commercial space since community involvement is a strong driver of consideration.

Improve Customer Service with Better Technology 

Being small and local doesn’t mean you can get away with not having the latest and greatest technology to make your banking services easy to access for your customers. From mobile banking to online check deposits, customers expect you to have all the conveniences of a big bank – and when you do, it levels the playing field and gives you an opportunity to draw dissatisfied customers away from big banks. Just because you are small does not mean you cannot compete in technology. Don’t believe it? Ask your customers. We did, and found that in almost every county in the Northeast, at least one community bank ranks in the top 3 in technology. Those community banks know that the key is not just the tools, but the servicing and training around the tools.

There is enormous opportunity to improve your ability 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.

If Your Bank is a Strong Contributor to the Community, Do You Get Recognition For It?

Many community banks and credit unions pride themselves on the contributions they make to their communities. This includes supporting local charities, funding scholarships, planting trees or otherwise helping their neighbors. While these great acts can certainly be their own reward, community banks also deserve public recognition for their great works. Other than the obvious benefits to the community, the contributions a bank makes to its community have two strong benefits for the bank itself.

The first is the influence on prospects, or non-customers. Many prospects learn about potential banks from advertising or from community involvement. Our studies show that advertisement is generally more effective at raising awareness among prospective customers than community works alone. Indeed, this is why many banks set aside large budgets for traditional marketing campaigns. However, our studies of bank customer behavior show that while ads are better at driving awareness, community contribution can be more effective at driving consideration. The latest results of the Q2 New York Bank Prospect Benchmark show that community contribution increases prospects’ consideration of your bank by an average of 126 percent. Not a bad side-effect! And for smaller banks with lower awareness, the increase is even higher.

Anyone wishing to receive the New York Bank Prospect Benchmark results can contact Customer Experience Solutions for the specific community contribution results as rated by each bank’s own prospects. All of the data cited in this article is based on that study.

Community contribution increases consideration by prospective customers by 126 percent.

The second impact that community contribution has on a bank’s business in on its current customers. When current customers see their bank’s involvement in the community, it can improve the esteem they already have for their bank. Our research has shown that the positive impact can increase their loyalty to the bank, meaning they are less likely to leave and more likely to increase long-term spending with their bank. The latest New York Bank Customer Benchmark report showed that recognition of community contribution increases customers’ share of wallet significantly with their bank and their long-term loyalty goes up by 88 percent.

Community contribution increases current customer loyalty by 88 percent.

While it is probably not a big surprise to some that contribution to the community has an impact on the top and bottom lines, many banks are not actually getting the benefit they should be. Many community banks and credit unions spend a lot of money and effort contributing to the community, but their current and potential customers simply don’t know about it. This is very frustrating to marketing and community giving leaders in some banks, and a wasted opportunity for many. It is very important to know just how much recognition you are getting for your good work, and how you can improve that ROI. The challenge for banks is breaking through the clutter to ensure your customers and prospects appreciate your contribution.

In our research, we saw that in one specific market, two community banks had equivalent amounts of community involvement in terms of gifts to charity, hours volunteered by their staff, sponsorships, etc. However, one of the two banks was rated 275 percent higher in terms of community contribution by their respective customers and 388 percent higher by non-customers. While each bank did similar levels of community outreach effort, one was using much more efficient channels and co-opting local nonprofit partners to get the word out. Not coincidentally, the bank with the better outreach is currently achieving stronger growth in new customers, especially commercial customers.

The first step to getting the maximum credit (and business impact) from your community contribution, is to understand how you currently stand with customers and prospects, in your specific market and in relation to your competition. Do your current customers see and appreciate your good work? Do your prospects? The second step would be to make reasoned adjustments and tweaks to the programs to see what the impact is. A bank may need to improve its community outreach to gain greater recognition, or it may need to emphasize different types of community involvement to broaden its exposure. Spring and summer are times of increased giving and involvement in community affairs so recognition can go up. But it can also be harder to differentiate since other institutions are increasing their involvement as well.

The third step is to measure how much the changes have moved the needle in terms of recognition of community contribution. And just as importantly is to track the impact that they recognition is having on awareness of the bank and consideration to use the bank in the future. Tracking your ratings over time will show you exactly how your community contribution, and all other marketing efforts, are truly impacting how your prospects and customers view you. This will allow you to fine tune your programs so you get the maximum benefit for the bank while doing the maximum good for the community.

So as the weather grows warmer, consider your community involvement activities – what are you currently doing? Are you sure you are getting the credit you deserve? What can you do differently? And most importantly, what you can you do to make sure your current and prospective customers see what you’re doing?

The New York Bank Benchmarks are based on over 75,000 unbiased consumer and business reviews in New York State, gathered in May-June 2017.  

*Community Contribution Rankings, Q2 2017, as rated by banked adults in New York State:

  1. Watertown Savings Bank
  2. Tompkins Trust Company
  3. Glens Falls National Bank
  4. Adirondack Trust Company
  5. Canandaigua National Bank
  6. Richmond County Savings Bank
  7. Rhinebeck Bank
  8. Jeff Bank
  9. Ulster Savings Bank
  10. Adirondack Bank
  11. Solvay Bank
  12. Canandaigua National Bank & Trust
  13. Ballston Spa National Bank
  14. Walden Savings Bank
  15. Tioga State Bank
  16. Bridgehampton National Bank
  17. Fairport Savings Bank
  18. Saratoga National Bank
  19. Tompkins Bank of Castile
  20. TD Bank

 *This is the contribution that the public sees, and does not necessarily line up with the actual level of community contribution.

Originally published in Banking New York 3Q 2017