Smaller Firms (CUs) Perceived As Better Consumer Advocates
The relative size of credit unions to other financial services providers is often viewed as a liability, but not so in new research conducted by Forrester Research here.
The company's survey of 6,000 households in October/November of 2003 shows that small providers, such as credit unions, are held in higher regard when it comes to "consumer advocacy."
"Customer advocacy is the perception by customers that a firm is doing what's best for them and not just for the firm's bottom line. To broaden their customer relationships, firms need to simplify customers' lives and be transparent about rates and fees: two key components of customer advocacy," said Bill Doyle, vice president, research director. In its survey Forrester reviewed 37 firms and a group of credit unions and found that financial service firms such as USAA did a good job on their behalf, according to 82% of consumers. A perennial strong performer, top-ranked USAA provides insurance, banking and investment products.
Credit unions as a group were ranked second, with 62% of members saying they believe the credit union acts as an advocate on their behalf. Ranked third and fourth, respectively, were Edward D. Jones and auto insurer Geico. Forrester reported that of the 38 organizations included in the survey questions, just 12 were viewed by a majority as consumer advocates.
At the bottom of the list were the big, money-center banks, with online banking services/broker E+Trade Financial Corp. rated dead last at 19%. Also rated low were Citbank (22%), FleetBoston Financial Corp. (26% and soon to change its name to Bank of America), and J.P. Morgan Chase (27%).
"We think the big banks are headed for trouble if they don't change the way they serve customers," said Doyle. "Many large banks, on the other hand, are at the bottom of our ranking because many of their customers feel nickel-and-dimed."