Relationship Retention and Enhancement

High-Touch and High-Tech Channels

Customer Service, Rewards, and Communication

Key Finding from a Previous Report:

In the 2015 Phoenix Synergistics survey, Checking Account Acquisition and Retention, only a minority of checking holders considered their main checking account to be their most important long-term financial relationship and would give this institution most of their financial business. How can providers improve loyalty and strengthen customer relationships?

Research Description and methodology

This study examines consumer loyalty with regard to financial providers.  The key drivers of loyalty, including customer service, rewards, communication, and channels are assessed.

National Internet Survey – The survey will include 1,500 online interviews with consumers age 18 or older.

Key Dates

June 23, 2017 – Charter fee/Intro pricing ends.

June 23, 2017 – Final acceptance of comments on questionnaire.

August 2017 – Initial results available.

September 2017 – Project Report available.

Strategic Objectives

  • Profile consumers’ financial provider and service relationships. Determine the factors by which consumers consider a financial institution to be main or primary. Assess the breadth of account and service relationships with main or primary providers and the degree of relationship fragmentation.
  • Examine in more depth details of the main provider relationship – including number of years have had the relationship, channels used, reasons for maintaining the relationship, and first account opened. Measure overall satisfaction as well as ratings of main provider features and attributes.
  • Assess recent account opening behavior – type of account or service, time frame in which opened, main or other provider, reasons for provider selection. Evaluate the near-term market for accounts and services and the competitive position  of the main provider to capture these relationships.
  • Probe recent main provider switching behavior – extent and reasons for doing so. Assess the impact of branch closings. Gauge the potential for switching in the next year and reasons why.
  • Examine in detail aspects of customer loyalty – including the position of the main provider when considering new accounts and services, self-perception of loyalty to the main provider and other providers, reasons for this loyalty, and likelihood of recommending the main provider to family, friends or colleagues. Evaluate the impact of media reports and role of social media.
  • Evaluate the impact of experience with alternative financial providers on the environment for customer loyalty. Measure the potential for nonbank organizations as financial services providers.
  • Determine which consumer segments exhibit the strongest traits of customer loyalty – as well as those who do not – in terms of demographic, behavioral, or attitudinal identifiers.

Research Issues

  • Following the great recession and financial crisis, many financial institutions (FIs) suffered an erosion of consumer trust and loyalty.  With the recovery, FIs have been working to re-establish consumer trust, which is essential to customer loyalty.  But what is at the heart of customer loyalty – customer service, rewards, communication programs, channels, or inertia?  Some industry experts feel that channels, particularly online and mobile options, create “stickiness” in customer relationships.
  • There is also the argument that high-touch elements engender greater customer loyalty and longevity.  Branch location has typically been very important in account acquisition – but what role does this play in customer retention?  Is exceptional customer service seen as a value-added feature or an expectation?  Many providers offer reward programs to keep their customers using the institution’s products and services.  How important are communication programs in instilling customer loyalty? What role does inertia play in loyalty?
  • Which of these various aspects is most important in driving customer loyalty and retention?  How does a customer’s NPS score affect loyalty? Winning the loyalty of customers provides a lifetime of opportunities for cross-selling and broadening relationships.  Understanding the drivers of consumer loyalty is essential in developing and implementing successful acquisition and retention strategies.


Activation, Retention, and Re-Marketing

Product Features and Pricing

Marketing Channel Mix

Key Finding from the Report:

Findings from Phoenix Synergistics previous reports in the Home Equity Lending Monitor Series (2006 to 2016) revealed that the proportion of homeowners who have
home equity credit has been stable.

Research Description and methodology

The Home Equity Lending Monitor was launched in 2001 to track and measure important issues in the home equity lending market.  This current project is the seventeenth in the series. The Monitor features a number of multiphase research elements including an extensive national consumer survey, a client presentation, and a strategically oriented project report.  This annual monitor will benefit the entire home equity team including market research, product management, database marketing, communications and advertising, and risk management.

National Internet Survey – 2,500 total online interviews with homeowners including 1,125 equity loan/line holders and 375 equity loan/line prospects.

Key Dates

May 26, 2017 – Charter fee/Intro pricing ends.

May 26, 2017 – Final acceptance of comments on questionnaire.

October 2017 – Initial results available.

November 2017 – Project Report available.

Strategic Objectives

  • Size the home equity market and evaluate trends in a changing environment.
  • Assess the impact of the housing and credit markets on consumer behavior.
  • Determine provider selection factors and measure satisfaction with current and/or past equity loan providers.
  • Identify key target markets.
  • Monitor the changing mix of marketing and distribution channels used for home equity lending.
  • Evaluate product features, new product concepts, and pricing structures.
  • Examine the consumer decision making process regarding home equity credit and competing credit products.
  • Identify strategies for acquisition, activation, retention, and remarketing.

Research Issues

  • For retail banks, the home equity market is extremely important.  It is an attractive market in terms of the types of borrowers it draws – serious, upper- income consumers.  Delinquencies are low compared to other forms of lending.  For both borrowers and lenders, it is a win-win.
  • This monitor has tracked ongoing trends and new developments in the home equity credit market annually since its inception in 2001.  A primary objective each year is to gauge the overall size of the market – as defined by current users and prospects.  Recent findings have suggested an improving market in conjunction with a recovering housing market.  However, rising interest rates may impact this market going forward.  Ongoing analysis of these trends is of critical importance.
  • Key measures assessed over time include activation and utilization rates of revolving equity lines, the purposes of using loans and lines, important criteria in choosing providers and products, response to fees and other pricing, and channel usage for marketing, acquisition, and customer service.  Of special interest is ongoing analysis of the perspectives and intentions of equity credit ex-users, with an emphasis on strategies and tactics for re-marketing. Phoenix Synergistics survey will provide a greater understanding of the consumer perception and usage of home equity credit.