Loyalty Falls as Financial Customers Threaten to Vote with their Feet

Customer retention drops to new low as two-thirds of customers consider swapping insurance and banking providers this year

Almost two-thirds (61 percent) of consumers are actively considering "switching" insurance providers in the next 12 months, with
63 percent saying the same about their banks. This is according to a cross-Atlantic customer loyalty survey from Thunderhead.

The enterprise communications company surveyed 500 consumers across the US and UK about attitudes to their current financial services providers. Consumers were also asked about the quality of communications received from their banks and insurance companies over the last year. Only 26 percent of overall respondents said that they felt their current bank or insurance company sent them "personalized" communications that were immediately ‘relevant’ to their needs.

In fact, only a very small number of the consumers surveyed feel a sense of "loyalty" to their insurance providers and banks (17 percent and 16 percent respectively). The remainder of those surveyed said they were ‘uncertain’ if they would switch providers this year.

“Maintaining customer loyalty continues to be a key issue for our banking and insurance clients,” said Glen Manchester, CEO of Thunderhead. “Customers have never had higher service expectations and have come to expect today’s providers to communicate with them across the range of devices they use in their daily lives. Our banking and insurance clients are actively seeking new ways to engage with customers to enhance their level of service and build customer loyalty.”

The research also shows that the proliferation of mobile phones, BlackBerrys and social networking sites is impacting how customers want to communicate. Some 50 percent of consumers said that receiving communications in real-time was ‘very important’ to them. A large number, 76 percent, said they would like the option to receive communications via email and 40 percent preferred the option of having relevant, timely information delivered to them via personalized web portals. Additionally, a rapidly emerging segment indicated that they would like to receive messages and notifications via SMS messages and were also interested in having messages and new product offers delivered to popular social networking sites such as MySpace and FaceBook. Surprisingly, only half of those surveyed wanted to continue to receive communications from their bank or insurance company via the post.

“Gone are the days when financial providers can rely on bank tellers and brokers to build relationships with the customer. Ensuring personal, relevant and timely communications with each individual customer, via a number of different channels, is critical to building and maintaining a strong relationship and retaining customers. As a result, customer engagement and multi-channel communications must be a top business priority for banks and insurance providers,” Manchester concluded.