Big banks rank low in customer advocacy. But on looking deeper, there are clues to systemic change occurring in financial services.
destinationCRM.com: Consumers Size Up Financial Services
Forrester defines customer advocacy as consumer perception that their financial services firm does what’s best for its customers, not just the firm’s own bottom line.
Like last year JP Morgan Chase and Citibank received the lowest ratings, earning scores of 18 percent and 19 percent. In fact, six of the seven lowest-scoring firms are large banks like Bank of America (30 percent), Wells Fargo (32 percent), and Washington Mutual (33 percent), according to the report. Click here to learn more!
There are two major culprits responsible for poor customer advocacy rankings among large banks, according to Bruce Temkin, vice president and practice director of financial services at Forrester and report coauthor. “It’s hard to be everything to everybody, and a lot of the big banks have spent most of their time over the last view years focusing on their M&A strategy,”
The changes we are seeing offer four clear clues to future success for large banks.
- the full service brokerage model is under attack, and some argue is dead
- big organisations have lost customer focus, yet some such as A.G. Edwards do it masterfully
- Credit Unions are perennially successful, because customers feel they “belong”
- property & casualty do well – because of simple, easy to price products, with consumate focus on delivery (claim payouts, fast service)
Rounding out the bottom 11 are National City (23 percent), Merrill Lynch and Smith Barney (both with 34 percent), and New York Life and Charles Schwab (each with 35 percent).
Brokerage firm Edward Jones earned a slot in the top 10 with 51 percent and direct firm E*TRADE (37 percent) is the only brokerage to significantly increase its customer advocacy rank, but some of other the brokerage firms suffered serious hits. Morgan Stanley, Merrill Lynch, Wachovia Securities (40 percent), and A.G. Edwards (42 percent) all fell by more than 6 percent in the past year, according to the ratings.
“The full-service brokerage model is under attack,” Temkin says, noting that direct brokers like Fidelity (42 percent) are “exposing the pricing of the full service brokers and replicating some of the models.” These brokerage firms landed in the middle 11 along with Charles Schwab, Wachovia Bank (36 percent), Prudential Insurance (40 percent), A.G. Edwards, Ameriprise, and Fidelity (each with 42 percent), Travelers, AIG, and MetLife (each with 46 percent), and Nationwide (48 percent).
Technorati Tags: customer+advocacy
Bankwatch 