Canadian banks at risk from lack of loyalty

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By: Wise Marketer Staff |

Posted on January 30, 2003

The Canadian banking sector's loyalty levels are dangerously low, with almost half of all consumers (45%) agreeing that 'it would not take a lot' to make them leave their primary bank, according to a recent survey from financial research firm, Maritz Research.

The survey's participants said that they would consider moving their money out of their primary bank if another bank made them feel like a valued customer.

The survey, which included 1,000 adults across Canada, also revealed that 20% of Canadians think that customer service is the most influential factor when choosing a primary bank.

Falling service levels
According to Maritz, current levels of bank service are failing to satisfy a majority of consumers.

Nearly one-third of Canadians (30%) disagreed with the statement, "bankers at my primary bank try hard to understand my needs before they recommend or sell me something."

And, when asked how the quality of bank service has changed during the past year, 19% said that it had decreased.

"The disconnect between banks and their customers appears to run deep," said Bob Macdonald, president of Maritz Canada. "Banks spend millions of dollars on marketing to attract new customers but our numbers show that customer retention is precarious at best."

"To avoid chronic customer turnover, the smart financial services firms are focusing on better education and motivation of their front-line personnel," added Macdonald.

If branch tellers and customer service staff are attentive and knowledgeable about the bank's products and services, customers will feel more confident about entrusting their money to the bank - and that confidence breeds customer loyalty.

Split attention
The situation has, of course, been complicated by the banks' need to split their customer service efforts between walk-in customers and online customers.

While most Canadians use ATMs (45%) or in-branch tellers (22%) for most of their transactions, another 19% said that most of their transactions are conducted using the internet. An additional 9% said they do most of their banking by telephone.

"In reaction to customer preference, the banks must optimise their service channels," explained John Ball, senior vice president for Maritz Thompson Lightstone. "That 28% of consumers who would rather do their banking without walking into the branch must be made to feel as valued as the walk-in customers do."

Other factors
Apart from those who based their banking decisions on levels of customer service, others cited convenience (17%), fee structure and interest rates (14%), and location (7%). Only 5% of the survey's respondents are significantly influenced by a bank's reputation.

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