WEST PALM BEACH, Fla.-Consumers are more satisfied than ever with credit unions, and dissatisfied with banks. Except for where they are more satisfied with banks and credit unions are slipping. Except for where consumers are simply dissatisfied with all financial services providers.
As 2011 concluded, credit unions were left attempting to interpret numerous national studies and surveys on consumer sentiment toward banks and credit unions. That much is known. Less well known is why the results seem to differ.
But perhaps most critical of all, noted one research analyst, is that despite all the attention given the findings, "satisfaction" often doesn't motivate consumers when choosing financial institutions.
Consider:
• The 2011 Bank and Credit Union Satisfaction Survey by Prime Performance notes that while credit unions are still posting better numbers than banks, banks are beginning to "close the gap" with credit unions.
• That survey was released just after the American Consumer Satisfaction Index, which found credit unions scored an 87 on its 100-point satisfaction survey, an 8.7% increase over 2010, and significantly ahead of banks, which scored a 75.
• J.D. Power & Associates' Retail Banking Satisfaction Study, meanwhile, released earlier in 2011 found that the bank industry customer satisfaction average had improved four index points (752 on a 1,000-point scale) over the 2010 survey, with smallest banks improving the most but even the largest banks improving in customer satisfaction. Customers also reported improved problem resolution. That study, however, was released prior to many of the negative reports over banks and debit card fees that made for headlines in latter 2011.
What To Make Of It All
So what are credit unions to make of all the studies on consumer attitudes toward financial institutions?
"While credit unions and community banks enjoy high satisfaction and customer loyalty, their larger competitors are closing the gap, especially younger customers," said Jim Miller, president of Prime Performance and author of that company's report. "If small banks and credit unions don't live up to customer expectations and provide a more personalized service they run the risk of losing their service advantage."
The report goes on to say that consumers are less likely to switch institutions when compared with last year. But that conclusion was based on a survey that preceded by Bank of America and other banks to institute monthly debit card fees, plans that were abandoned following consumer uproar.
But even as Prime Performance suggested that banks are making real gains on customer satisfaction and that CUs could risk losing their service edge, a different survey was released and told a much different tale.
The 2011 American Customer Satisfaction Index (ACSI) trumpeted as its headline: "Credit Unions Set All-Time Record for Customer Satisfaction."
"For any of the large banks, the gap between their own ACSI score and the scores of either small banks (79) or credit unions (87) is daunting," ACSI said in its analysis of the survey findings.
But there are some very real flaws with any of these surveys, most notably, their actual usefulness to CUs beyond the potential bragging rights, according to one person.
"We see lots of these surveys, and credit unions almost always win," said Ben Rogers of Filene Research Institute. "But comparing 7,300 credit unions collectively against big banks just isn't that useful. It gives you a sense of the broad sentiment, but broad sentiment doesn't always translate locally and doesn't always indicate how consumers will behave."
If credit unions want real, useful market intelligence, they need to conduct local surveys and avoid trumpeting any advantage in satisfaction ratings in favor of looking at the "trajectory" of the findings, Rogers explained, noting that it's that "trajectory" that indicates how things are trending.
Perhaps the more important question than "how satisfied are you?" is "what are your expectations?," Rogers suggested. "If you go to the bank, and expect a service level that you would rank at level five, but you come out having had a level seven experience, that's far better than if went to a credit union, expect it to be a nine and come out feeling it's a seven. While that seven is still high on a scale of one to 10 and it's the same score you gave the bank, the difference is you came out of the bank pleasantly surprised at how well they did, but you left the credit union a little disappointed. It's the stuff behind the scores that is frequently more important than the scores themselves."
Service Most Important? Think Again
The other issue, said Rogers, is that for all the attention paid to how consumers rate customer service, research has shown that service is at the bottom of the list of reasons customers switch from one institution to another.
Consumers might leave a bank over bad customer service, but since they have no way of knowing for sure who might have better service, they're not necessarily choosing the new institution based on service. So, as a general rule, consumers don't choose an institution for its service-but they will stay at an institution because of the good service, Rogers said.
