Satisfaction and loyalty among small business banking customers drops two years straight
According to the J.D. Power and Associates 2010 U.S. Small Business Banking Satisfaction Study, both satisfaction and loyalty among small business banking customers continue to decline for the second straight year.
The study found that small businesses have the lowest satisfaction levels among all the various financial services customers J.D. Power and Associates surveys every year.
The loyalty of small business banking customers is also on the slide, with only 19% of customers in 2010 saying they “definitely will” use their financial institution for additional business products, down significantly from 34% in 2008.
SunTrust Bank ranks highest in small business customer satisfaction, followed by Huntington, KeyBank, BB&T, Regions and TD, all scoring five out of five on J.D. Powers scale.
Big banks make up the bottom of the list: Chase, BofA and, in last place, Citibank.
The study finds that small business banking satisfaction is highest among customers who feel they have a collaborative partnership with their bank. For instance, a bank assigning an account manager who fully understands the customer’s business and provides ongoing, proactive communication will score higher.
Delivering an error-free banking experience is a critical component, representing a significant pain point for small businesses. The number of problems experienced by small business banking customers is more than 1.5 times higher than those experienced by retail banking customers. Problems reported by small businesses has ticked up from 34% in 2009 to 36% in 2010. Fee-related problems are particularly prevalent.
“While customers don’t expect to receive services for free, they become aggravated when blindsided by unexpected charges or by fees that aren’t appropriate to their situation,” said Beird. “Satisfaction is notably higher when customers understand their financial institution’s policies and procedures for charging fees. Therefore, it is crucial that when a new account is opened, banks make sure they understand the small business owner’s needs, provide them with the most suitable product and effectively communicate the fees involved.”
On a somewhat brighter note, more small businesses now believe their bank is stable. They are also more optimistic about the economy and their future, compared with one year ago. They feel their personal financial future as well as the economic outlook have both improved since 2009.
“Despite a sense of optimism in the industry among small business owners, it appears that their financial institutions are failing to keep up with their expectations,” said Michael Beird, Director of Banking Services at J.D. Power and Associates.
“These customers may be experiencing some frustration with the lack of support,” Beird said. “For example, satisfaction with the availability of credit continues to decline.”
Now in its fifth year, the U.S. Small Business Banking Satisfaction Study is based on more than 6,600 responses from financial decision-makers at small businesses with sales volume from $100,000 to $10 million. The study was fielded between July and August 2010.