Let’s Make a Deal!

Given the recent banking crisis, I would expect a fair amount of customers to be bank “hopping” as of late.  When J.D. Power recently released its 2011 U.S. Retail Bank New Account Study, I wasn’t startled by the 13% increase in customers changing their primary bank, compared to 2010.  Their motivation could range from all the bad press, fear, poor service and high fees to maybe even being “forced” by a bank failure. 

I was surprised, though, to learn that more than half of customers who purchased an additional product did not make that purchase at their primary bank.  Rockwell Clancy, V.P. at J.D. Power and Associates, summed it up best: “Customers who choose to stay with their current primary bank for additional products are most driven by positive past experience and perceptions that their bank is more focused on customers than on profits.”

When you’ve been with the same bank for years, the words “customer loyalty” have significant meaning.  There’s a comfortable familiarity.  The bank’s messaging hits closer to home.  You expect them to value your business.  But when a fee suddenly pops up by surprise in a monthly statement, it not only irks you; it’s alienating.

That’s just what happened to me. 

An inactivity fee not only prompted me to complain (they denied my request to waive the fee), but also investigate taking my business elsewhere.  Now I am turning my negative experience into a lesson learned, for both banks and my own wallet.  I’ve blogged on it in Bank Systems & Technology.  And over the next month, I will be looking to consolidating several accounts, based largely on getting hit with this fee. 

That means I’ll literally be searching for a new place to park my mortgage, savings, checking, online bill pay and investment accounts. I think I the sum of my accounts should be more interesting to a bank than piecemeal business.

Susan Faulkner from Bank of America, in a recent BAI Banking Strategies article, describes their new solution packages tailored “for customers who want multiple accounts with different benefit features and rewards, and they want choices in how they pay for those accounts.  In this value exchange, we reward our customers for bringing us more of their business.  That helps us deepen our relationship with customers and provides them with priority service, preferred pricing and product offers.” 

Sounds like I should have left before the inactivity fee was assessed.  

I’m going to find out whether banks are willing to stand behind what they’ve been saying and advertising.  Over the course of several blogs, I will discuss whether banks really want more wallet share – and whether they have the technology to achieve that – based on my experience in the trenches.  Because wholesale, multi-account moves are nearly impossible to do on the Web, I’ll visit several local branches to investigate further.   I have plenty of selection; there are over a dozen branches within two miles of my house ranging from the largest national banks to moderately sized regionals and small community banks.

I haven’t started actively shopping around yet, but I know that to succeed banks will need to excel in four key areas:

- Customer focus: Do you seek first to understand me as a "whole customer" or does your staff just push the "deal of the month"?

- Competitive edge: Do you provide compelling product "bundles" or just individual products that require me find the "value"?

- Interaction experience: Will someone shepherd me through the process or will I be passed around?

- Offer clarity: Are fees, rates and features easily understood, or do I need a lawyer? Can I validate them in another channel?

There’s an interesting retention dynamic at play here as well.  Several banks in the area already have some portion of my business, but does the prospect of losing me as an existing customer make any difference?  Perhaps just as importantly, will you waive the occasional fee to keep my wallet share? 

As Monty Hall used to say, let’s make a deal!  Stay tuned.