Consumers shopping for new checking accounts at FindABetterBank.com can specify which financial institutions they wouldn’t consider banking with and why. 48% of shoppers choose to eliminate at least one institution before even seeing what that bank or credit union had to offer.
Bad experiences and PR have the biggest negative impact on customer acquisition. Nearly half of shoppers that eliminated an institution from consideration cited either a bad experience or they heard negative things. This works out to about 24% of active shoppers. These shoppers have such bad impressions of these institutions that they don’t even want to consider their offerings. One large bank really needs to overcome some negative mojo – they’re being eliminated from 11% of all searches!
Lack of brand awareness hurts direct banks and smaller institutions. When a bank or credit union is eliminated because consumers are unfamiliar with the brand, most often the type of institution excluded is a direct bank, small community bank or credit union. Many of these smaller institutions don’t invest in (adequate) advertising; they invest little- to nothing in building brand awareness. But really, some level of advertising needs to occur all the time — out of site, out of mind. One banking CMO recently told us that her institution cut way back on print and local advertising in 2012 and she says it hurt their performance in 2013.
Inconvenient branch and ATM locations don’t automatically eliminate an institution. Many consumers make only a few trips to their bank a year, and there has been a lot of advertising about features that lessen demand for close-by branches (e.g., mobile deposit capture, ATM fee rebates). Many banks’ and credit unions’ primary marketing messages are still focused on convenience and accessibility of branches and ATMs. These data show that in terms of new customer acquisition, these messages are resonating less and less.