Opportunity is knocking for credit unions as a recent J.D. Powerand Associates study reveals that brand image matters most toconsumers when selecting a retail bank.

The J.D. Power and Associates 2009 Retail Bank Shopping Studyfound that 36% of a shopper's selection decision is driven by thebank's brand image, while branch proximity (21%) and products andservices (14%) round out the major influences in consumers' finalbank selection.

“Some crucial aspects of a bank's brand image-such as perceivedfinancial stability and reliability-can be difficult for a bank toimprove, which negatively affect the bank's likelihood of beingselected,” said Michael Beird, director of the banking practice atJ.D. Power. “However, branch employees can positively impact abank's brand image by providing personal service, communicatingproactively and having a customer-driven focus. These three aspectscombined account for 15% of importance in the shopping process,which is even greater than the importance of bank products andservices.”

The study found that nearly one-third of customers who avoidconsidering a particular bank altogether do so because of aprevious poor service experience with that bank. Other commonlycited reasons for avoiding a particular bank include issues withbranch proximity/operating hours, as well as poor policies, such ashigh rates and fees.

“Many customers who shop for a new bank have had prior exposureto a bank's service as noncustomers through experiences such ascashing checks or getting product information,” said Beird. “As aresult, banks can use visits by noncustomers as an opportunity toshowcase their services and improve consideration when thesecustomers shop for a new bank.”

In addition to customers' personal experiences, the serviceexperiences of other customers are also important.Recommendations-both positive and negative-account for 31% ofimportance weight in a bank's brand awareness, while positiverecommendations drive 36% of a shopper's consideration of abank.

“Word of mouth recommendations have the power to influence bothawareness and the probability that customers will consider a bankin their shopping process,” said Beird.

The study also found that satisfaction with the accountinitiation process increases considerably when staffers performsimple actions to improve the service experience when opening a newaccount-including greeting the customer when entering the branch,keeping wait time to five minutes or less, calling the customer byname and providing the customer with a detailed needs assessment.Among the 19% of customers who experienced all these actions,satisfaction scores represented 84 points above the industryaverage. In addition, the percentage of customers who said they“definitely will” reuse the bank for future products and servicesincreased to 66% compared with an industry average of 47%.

The 2009 Retail Bank Shopping Study is based on responses frommore than 7,500 consumers.

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