Over the past decade, service fees have become a part of the banking experience that most consumers have come to expect. While rankling for many customers, financial “add-ons” have become not only a critical source of revenue for banks and credit unions, but also an effective means of deterring unprofitable consumer behavior. According to new research from Minneapolis marketing firm, Russell Herder, customers’ loyalty to their financial institution is greatly impacted by service fees and whereas, perhaps unsurprisingly, being assessed a fee can negatively affect consumer opinions, the extent to which fees are believed to be unfair – and the types of fees incurred – can have a substantial impact on consumer attitudes.
Using the firm’s social media research tools and traditional online methods, Russell Herder conducted a survey of more than 500 United States bank and credit union checking and savings account customers to ascertain if, and to what degree, loyalty to their financial institution is impacted by service fees.
The results suggest that customers strongly distrust the legitimacy of banking fees, with more than 70 percent of them believing charges to be unfair. Furthermore, an astounding 90 percent of customers felt their bank could have done a better job communicating what fees it charges and how they are incurred.
The study also found that a number of respondents used some type of online forum to publicly complain about a fee they perceive to be unjust, potentially impacting an organization’s reputation. As a result, researchers observed the need for banks and other financial institutions to improve their communication strategy as well as pay attention to customer sentiments not only in person, but also online, monitoring brand mentions and responding to dissatisfaction.
Carol Russell, CEO of Russell Herder, says the research insights have implications for financial institutions and their customers.
“Banks often times receive negative sentiment due to service charge increases or changes,” said Russell. “Because of this, it was important for us to unearth public opinion about how these charges are attained; using this feedback to provide information regarding what financial institutions can do to improve customer loyalty and satisfaction.”
The study is a natural extension of the agency’s commitment to provide research-based, relevant strategies in an increasingly digital environment. Located in Minneapolis, the firm provides such services as online reputation monitoring, brand positioning campaigns and in-depth market research for the financial services industry.
For the full list of observations and the study in its entirety, visit http://russellherder.com/research.
About Russell Herder
Founded in 1984, Russell Herder provides integrated strategic solutions to regional and national clients. With offices in Minneapolis and Brainerd, Russell Herder develops strategies that link creative, research,advertising, public relations and digital communications into powerful, results-driven platforms. For more information visit, russellherder.com.