Capturing the Elusive Account Switcher
In the American banking market, customers have a high rate of switching accounts, seeking after new incentives or better offerings and leaving their current bank behind. How can your bank capture these customers and cause them to choose your bank, or, in the case of current customers, stay with your bank? This begins with understanding how these customers think, and it may not be the way you think they do. AOL and Oliver Wyman recently did a survey and study of account switchers, first-time applicants and account abandoners. The study looked at the clickstream history of over 1,700 participants while also asking them some survey questions. The results can help today’s banks understand how account switchers think, and change their own thinking to be in alignment.
Account Switchers Typically Choose the Bank They Already Like
According to the study, two out of every three of these potential account switchers had a bank in mind before they started their research, and 90 percent of those who had a definite interest chose that bank they liked. This means that banks who wish to capture account switchers need to stay at the forefront of their target market’s mind, before shopping begins. Your branding, then, needs to be “always on” so your bank comes to mind when the first thought of making a switch occurs.
Account Switchers Are Not Influenced by Cash Offers
Offering a cash incentive for opening a new checking account may not be as effective as it seems at first. The survey found that 40 percent of switchers were influenced by these offers, the offers themselves were not enough to cause people to make a switch. Instead, your company must have differentiators that are well understood and clearly show how your bank is different. Simply offering some money is not enough.
Client Experience Causes Majority of Switches
Is your bank operating on the fact that life changes cause the majority of account switches? Getting married, moving, having a child and other life changes can cause people to switch accounts, but surprisingly the survey found that negative experience was the most common cause. Your customers demand a positive experience at your bank, and if they don’t have it, they will move on. So how does this knowledge help you capture account switchers? When people have a negative experience at a bank, they turn to the experiences of their friends and family to help them find a new one. This means that you need to cultivate advocacy from your current customers. When account switchers learn about your bank from their personal network, it becomes a verified candidate in their minds.
People Want to Open Accounts Online, but Can’t
Finally, the survey found that people are running into a roadblock preventing them from opening accounts conveniently online. One out of every five first-time checking account clients surveyed tried but failed to open an account online. As a result, 40 percent stopped trying to switch banks altogether, indicating that the hassle was too great. To capture that 40 percent, consider making your online account opening simpler. Some banks avoid this because they want to have the customer come into the bank for a face-to-face meeting. Rest assured these meetings will still happen. A full 60 percent of those surveyed indicated that they preferred to open at a branch to speak to a person who can answer questions. You will still get your customers into your bank, but allowing account opening easily online can prevent losing those who want that convenience. So how can your bank capture the elusive account switcher? Learn more about how they think, and make changes to your marketing plan accordingly, and you can land these accounts at your own bank.