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Thursday, March 1, 2012

Almost 1 in 10 changed banks last year

Observation:   A recent story from USA Today suggests that 9.6% of consumers opened an account elsewhere in response to a rate increase from their current bank.  The article is based on a J.D. Power report, and you can see the full story by clicking here.

Implications:   Lots of banks are trying to figure out how to regain some of the revenue they lost during the banking reform era that walked lock-step with the Great Recession.  Many are taking flight to smaller institutions, but that begs the question: When will smaller banks be forced to make some of the very same moves?

This is an important study in marketing communication.  I’ve interviewed hundreds of consumers over the past few years, and a significant number—when prompted—admitted that an ATM card, online banking, and other services are well worth paying a few bucks for the value received.  The challenge, I’m guessing, is that too many banks simply imposed the fees, without properly explaining why they were necessary and why the relationship still represented a good value for the consumer.

Every company if faced with the need to raise prices at one time or another.  The importance of good listening is an important lessons to learn now, lest we (like the big banks) be forced to learn the hard way.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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