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.


The Decision Making Process

Traditional and Alternative Sources

Balancing High Tech and High Touch

Key Finding from the Survey:

A notable minority of those not using financial advisors or professionals have done so in the past. Directionally, this widens with age and is wider among the mass affluent and highly affluent. Providers should explore strategies for reconnecting with these customers.

Highlights of the Study

This study examines the experience of mass affluent households with financial advice and planning.  Sources of influence, preferences, and reaction to automated and non-traditional services are assessed.

National Internet Survey – The survey will include 1,500 online interviews with consumers age 18 or older. Asset quotas include: 200 – <$100K; 275 – $100K-$249.9K; 275 – $250K-$499.9K; 275 – $500K-$749.9K; 275 – $750K-$1M; and 200 – more than $1M.

Key Dates

July 2017 – Project Report available.

Strategic Objectives

  • Profile households’ savings and investment activity – encompassing accounts and services held, relative conservative/aggressive orientation, reasons started to save or invest, and approach to decision making.
  • Assess consumers’ approach to financial planning – including the perception of current planning efforts, dealings with advisors or professionals; the types of services, products, or areas addressed through the planning process; and the degree of confidence in current relationships.
  • Gauge the future potential for planning and advisory services – such as determining future specific financial needs, the likelihood of working with a professional or advisor, important criteria in selecting an advisor, and reasons for non-interest.
  • Explore the role of technology as competitive or complementary to traditional financial planning – examining usage of online personal financial management, online planning tools, and experience with robo advisors or robo investors.
  • Examine the process of implementing an advisory relationship – detailing the motivations for first starting to use an advisor or professional, the initial method of contact, what types of initial discussions or assessments took place, types of pricing arrangements, and moving or ending relationships.
  • Determine communication preferences in dealing with an advisor or professional  – covering aspects such as frequency and channels of contact, satisfaction with degree of contact, expected response times to a question or issue, and the importance of human contact for robo advisory services.
  • Identify, segment, and target those consumer households that are primary markets for financial planning services – utilizing variables such as age, household income, asset level – and attitudinal factors related to needs, perceptions, and priorities.

Research Issues

  • Households today are faced with a wide, and perhaps confusing, array of options and choices for obtaining financial advice and planning.  Traditional players – such as bankers, brokers, and financial planners – certainly continue to have a strong presence but are faced with challenges and opportunities related to technology adoption and integration, the expectations of emerging market segments, and non-traditional players.
  • Consumers are bombarded by offers of advice on household budgeting and finance, saving and investing, insurance needs, and estate planning.  How they sort through the deluge of magazine articles, blog posts, webinars, community forums, emails, and phone calls to determine what is valuable information or not is an important process to understand.  Concurrent to this, looking at the role of personal interaction – not just from financial representatives but also friends, family, or other reference group members is vital.  The level and depth of financial planning available to households also represents a wide spectrum.  Ascertaining what degree customer segments want – ranging from frequent face-to-face contact and guidance to a technology-driven “do it yourself” approach – is a key objective.  Determining how a “personal touch” and technology can interact to deliver value to customers is also important.
  • Prior work by Phoenix Synergistics has found that robo advisory services – despite being thought of as displacing the human element – have broader appeal when there is an option for contacting a representative.  How frequently customers want to be contacted, and by what channels, is a critical element in any advisory relationship.  Financial institutions and investment organizations are faced with the challenge of understanding the consumer perspective in designing and marketing their financial advisory and planning services – in terms of the degree of information, advice and recommendations, and transaction capability desired. [F254]


Branches and Online Channels

Account Management, Customer Service, and Sales

Terminals, Devices, and Technological Innovations

Key Finding from a Previous Phoenix SYNERGISTICS Research Survey:

According to the 2014 Phoenix SYNERGISTICS study, The Era of Self-Service Banking, most consumers felt that branch automation should make it easier for branch staff to serve customers, while fewer felt branch automation should make the branch more self-service for customers.  Have these attitudes shifted over the past two years?

  F251 Prop Graphic

Highlights of the Study

This study examines the consumer experience with self-service banking, including in-branch options and online and mobile banking.  Consumer reaction to various technological innovations is evaluated as well.

National Internet Survey – The survey will include 1,000 online interviews with consumers age 18 or older.

Key Dates

December 23, 2016 – Charter fee/Intro pricing ends.

December 23, 2016 – Final acceptance of comments on questionnaire.

March 2017 – Project Report available.

Strategic Questions

  • What is the general day-to-day approach of consumers to self-service activities? Which types of activities do consumers have experience with – such as using self-checkouts at retail stores, placing orders at self-service kiosks in restaurants, or checking in for airline flights using computers or mobile devices?
  • What is the role of ATMs in self-service banking and financial activities? How widespread has ATM deposit making become?  Will consumers adopt advanced activities and functions at ATMs or other self-service terminals?  Are advanced functions regarded as appropriate for regularly-used ATMs or for specialized terminals?
  • Are consumers receptive to real-time videoconferencing with bank representatives? Is there a preference for doing this on certain devices?  Is this a potential account acquisition channel?
  • What will be the impact of consumer usage of self-service activities on branch automation and configuration strategies? How will branch traffic patterns change in response to wider adoption of self-service alternatives?
  • How do customers view their own comfort level in using automated or self-service technology for financial activities? Are there segments who will not adopt self-service devices or functions?  What perceived disadvantages exist that might be barriers to adoption of self-service – such as distrust of technology, a desire for human interaction for some activities, or a reluctance to assume responsibility for decisions or actions?
  • Is there a relationship between online and mobile financial activities and the broader adoption of self-service financial activities? Do certain activities – such as mobile RDC or mobile access to ATMs – enhance or compete with terminal or kiosk-based self-service activities?
  • Is an orientation to or usage of certain self-service devices and systems a basis for segmenting and targeting consumers?  Can behavioral, attitudinal, or demographic traits be used to identify and distinguish these segments?

Research Issues

  • How far along the road to self-service banking are consumers?  Self-service alternatives such as ATMs, kiosks, tablets, and mobile phones have been available for a number of years.  Now, these self-service devices are appearing in branches allowing consumers to conduct transactions easily and quickly so that branch personnel are free to focus on sales of financial products and services.  Videoconferencing terminals located in branches also allow customers to interact with sales specialists in remote locations.  This can be particularly valuable for more complex financial products and services.
  • With all of these new developments, consumers can now perform multiple activities using self-service devices from depositing checks to applying for products and services.  However, for some activities, consumers may use self-service devices along with assisted self-service and full-service alternatives.  Understanding this process is essential in channel integration and branch configuration strategies.
  • Consumers’ willingness to adopt self-service banking may be a result of an overall orientation to self-service in other locations and industries such as grocery stores and airline ticketing.  It may also stem from their desire for time and place convenience.  Whatever the motivation, self-service banking is becoming an essential element as providers develop and implement banking systems and services for the future. [F251]


Building and Expanding Relationships

Communication Strategies

Multi-Channel Integration

Key Finding from a Previous Phoenix SYNERGISTICS Research Survey:

According to the 2015 Phoenix SYNERGISTICS study, Checking Account Acquisition and Retention Strategies, more than four in ten of those who opened their checking account first at their institution say they obtained another account within the first six months.

  F250 Prop Graphic

Highlights of the Study

This study examines the consumer experience with the onboarding process including communication strategies and contact methods, cross-selling and follow-up. The fragmentation of consumer banking relationships is also explored.

National Internet Survey – The survey will include 1,000 online interviews with consumers age 18 or older.

Key Dates

November 25, 2016 – Charter fee/Intro pricing ends.

November 25, 2016 – Final acceptance of comments on questionnaire.

February 2017 – Project Report available.

Strategic Questions

  • How widespread and numerous are multiple account/service relationships with the main financial provider among consumer households? To what extent do checking accounts play a “lead role”  in this?
  • What is the profile of recent account opening activity – within the past five years – among consumer households? What accounts or services have been obtained?  Did comparison shopping take place?  Which channels or sources of information were utilized?  What product or provider features were important?  Which application channels were used?
  • Did consumers experience onboarding tactics during their most recent account opening – such as being asked about their additional financial needs, being informed about other accounts and services, or receiving welcome materials? Were other accounts and services obtained as a result of these efforts and what types?  Were other ancillary or value-added services obtained or used as a result of onboarding tactics?
  • What experience have consumers had with onboarding tactics during a short time frame after their most recent account opening? How soon were they contacted and by what channels?  What were the outcomes of these contacts in terms of obtaining any additional accounts or services or using any ancillary or value-added services?
  • What attitudinal or perceptual factors impact the onboarding process? Are customers receptive to being asked about their needs or do they regard it as an invasion of privacy?  How often do they want to be contacted by their institution, if at all?   What is the position of the main provider relationship in terms of obtaining additional accounts and services?
  • What preferences do consumers have for future financial shopping and onboarding activities – in terms of information channels and content, application methods, follow-up messages, and time frame for follow-up contact?
  • Are certain consumer segments more receptive to onboarding than others?  Are there indicators – such as demographic, behavioral, or attitudinal traits – that are useful for designing and targeting onboarding strategies and tactics?

Research Issues

  • Onboarding programs are receiving a great deal of attention in today’s financial marketplace.  These programs are designed to develop and enhance financial relationships from inception.  In essence, onboarding is a short-term strategy that can lead to long-term and loyal relationships.  There are a number of steps that can be part of the onboarding process.
  • The first step is often an assessment of customer needs when the product or service is first purchased.  This step can be followed with some form of thanking the customer for the purchase.  A series of steps can follow such as inquiries about product usage, satisfaction, and problems or concerns.  These steps can utilize a variety of forms of communication from traditional mail, email, telephone calls, as well as a mix of channels. It is valuable for these contacts to occur early in the relationship and that they are personal and frequent. As a result of these contacts, cross selling can either follow or additional sales may be an adjunct to the onboarding process.
  • While most onboarding is associated with checking accounts, purchases of all types of financial products and services may benefit from the onboarding process.  In developing and implementing onboarding programs, it is essential for providers to understand the consumer perspective. How do consumers respond to the onboarding process?  Do consumers consider some steps as valuable, while others are seen as too much of a good thing?  What channels are preferred?  This Phoenix SYNERGISTICS survey will examine these issues as well as others to provide financial institutions with clearer insight into the consumer perspective on the onboarding and sales process. [F250]