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Survey Says? Highlights from the 2017 Relationship Survey

September 28, 2017
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Raddon conducts a group research study three times a year for approximately 160 financial service organizations that range in assets from $250M to $5B.  At the beginning of each year, the survey is updated to include our standard key metrics as well as new and trending topics.  The first wave of nearly 30,000 responses has been processed and some interesting findings have emerged.

A new question was added to the 2017 Relationship Survey program related to gauging a respondent’s long-term plans for staying with their financial institution.  Nearly 78% of respondents indicated that they are a ‘lifelong partner’ of their financial institution.  Another 19% indicated that they ‘may or may not stay’ and 3% indicated that they ‘will not stay for the long term’.

Even more interesting with this finding are the obvious differences between the generational segments.  The older, Traditional segment tends to be more certain about their long-term plans, with 84% indicating that they are a ‘lifer’.  The data suggest that as individuals get older, confidence in their financial services provider strengthens and they are firmly established in their financial home.  However, the younger folks, Millennials, have not yet determined with whom they want to associate themselves.  About 22% of the Millennials segment indicated that they ‘may or may not continue their relationship’ with their financial institution.  This suggests the volatility of relationships with the younger age groups.  On the flip-side, nearly three-quarters of Millennials reported that they DO see themselves as a life-long partner of the institution.  Given that Millennials represent over one-quarter of the total customer base of the average institution, this is significant given their age and the plethora of options available to them.  To make sure that Millennials keep to their promise, financial institutions will need to establish plans to nurture relationships with their younger-aged customers and continue to improve and innovate products to meet their needs.

Another highlight from the spring research relates to servicing and how employees contribute to the overall affinity of an institution’s highly-loyal base.  Respondents were asked to indicate the importance of various attributes of the service experience.  Then, respondents were asked to rate the performance of their institution on those same items.  Elements that were considered to be ‘extremely important’ and rated as ‘excellent’ were considered to be ‘differentiators’.  Differentiating elements help the organization stand apart from their competitors in terms of service.  Raddon research indicates that for the highly-loyal segment*, the attributes that corresponded to the interactions with employees at the institution were considered to be differentiators.  The data suggest that these attributes, including employee skill, understanding of products and services, politeness/friendliness, understanding  issues, accuracy and approachability, are all contributing factors to the strong relationship with the highly-loyal segment.  In today’s ‘high-tech/high-touch’ world, this finding solidifies the notion of employees being a critical part of nurturing and enhancing customer engagement which in turn feeds growth.

Raddon’s research also reveals how well specific brand elements are resonating with members/customers.  Survey respondents were asked to indicate how much their specific financial institution differentiated themselves from the competition on various elements of their brand.  These elements included a mix of what Raddon termed as ‘givens’ – those elements that were the same for all institutions participating in the study – plus, the institution was able to customize another set of attributes specifically for their organization.  Respondents were then asked to indicate the importance of each attribute to their relationship with the financial institution. 

Items where respondents indicated that an element was both a ‘differentiator’ and ‘extremely important’ were considered to be brand drivers for the organization.  The data revealed that the customized elements – those items that were unique to their financial institution– emerged as the brand drivers and resonated more with customers than the general industry branding statements. 

The implication of this finding suggests that financial institutions have done a good job with infiltrating their brand within their customer base.  Customers recognize the branding elements and are responding to the messaging.  This has contributed to the high share of wallet growth for the industry.  However, share of wallet limits are nearing and new sources of growth will need to be found externally.  The challenge for organizations is to take strong brand messaging to the greater market and draw new customers into their organizations.

The Relationship Survey is your key to understanding the complex household relationships within your customer/member base. Results show how to improve existing relationships, build loyalty and maximize revenue potential for key customer segments.  For details on how to participate, please contact Mark Boehm at mboehm@raddon.com.