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.

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.

Winners & Losers

2.28 Million Northeast Households and Businesses to Switch Banks this Year

Banking New England Sept/Oct 2018
Published on Oct 16, 2018

In this special marketing issue, learn how to optimize your mobile site, understand why customers can be easily enticed to switch banks, and get an inside look at the New England Financial Marketing Association conference, featuring an article by Bruce Paul.

How Community Banks Can Capitalize on Advantages to Beat Big Banks

Community banks are constantly competing against big banks. To remain relevant, it’s critical that community banks find and capitalize on the competitive edge their unique positions offer. It’s impossible to play the same game as big banks and expect to win. However, with a unique strategy that leverages the advantages offered by community banks and credit unions, customers can be drawn to a local choice.

Community banks can offer customized services for a better banking experience.

Larger banks do what they can to provide a well-rounded service, but it’s a cookie-cutter approach that forces local branches of large banks to conform across regions, not taking into account differences in the local communities they serve. Large banks are rarely attuned to the needs of the individual banking customer, focusing more on quantity than quality. But customers of every generation, from Baby Boomers to Generation Zers, want a trusted financial advisor. They don’t want a pamphlet on services or a web page on APRs. They want their bank to know who they are and what they personally need to do to improve and manage their finances.

Continue reading “How Community Banks Can Capitalize on Advantages to Beat Big Banks”

Community Bank Challenges: Is Technology Your Achilles’ Heel?

Community banks and credit unions often believe their strengths lie anywhere but with technology. Given the variety of personal interactions in demand by customers, it may seem unlikely that technology shortcomings would be harmful. Unfortunately, even the best customer service cannot make up for a lack of the tech-based services that customers expect in their desire to make transactional banking easier and faster. Yet, most community banks and credit unions do have the technology they need to compete. So where is the issue?

Technology is rarely the problem.

Technology is rarely the problem, but how it is implemented and presented to customers certainly can be. A community bank may think that a basic technology package is all they need, but you can’t just introduce technology and walk away. While offering online banking services and mobile banking services is important, your customers must know how to use the technology, or it can become a source of frustration, causing some customers to defect.

Continue reading “Community Bank Challenges: Is Technology Your Achilles’ Heel?”

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.

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?

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