Most consumer-facing companies ask about the customer satisfaction of every transaction. According to Larry Cohen, director of the Consumer Financial Decisions’ (CFD) MacroMonitor Survey, apparently, there is a constant need to make sure the company is receiving good grades; “not nearly as much effort is spent on figuring out how to make the grades better.”

Cohen says that satisfaction is difficult to measure because questions rarely define what constitutes satisfaction; “satisfaction means different things to different people. These days, the most important reason to avoid using customer-satisfaction surveys is that the majority of consumers are burned out by being asked to complete one after every interaction or transaction. Customer-satisfaction surveys have outlived their usefulness as a means by which to improve customer experience.”

Was your customer satisfied? Was the customer’s expectation met? Would the customer recommend you to a friend? Was their experience with your organization positive? Answers: MaybeMaybeMaybe; and It depends. Cohen thinks what you really need to know is: Is the customer looking for another provider? “That information is a more reliable measure than a net-promoter score derived from convenience samples! How many (and what types of) households (HHs) are frequently or actively looking for a different provider? Which households would consider, or are thinking of, switching providers? All of these households are in play and represent a serious risk to maintaining your current level of business, much less expanding it.”

The MacroMonitor data indicate that basically, all households (98%) have a primary bank or credit union; just over one-third (47.5 million) would not switch providers. If you are a financial institution, this means two-thirds (87.4 million) of your customers are at risk of switching providers—roughly 7 million customers are actively looking for another relationship.

Roughly one-half of households are clients of an investment company (stockbrokerage, mutual-fund company, or financial-planning company). Almost one out of four (25.7 million) households would not switch their primary provider; 41.5 million households are not fully committed to their provider; and 2.4 million are actively looking for another services provider.

CFD uses a five-point scale to define “switchers”: I would not switch to another institutionI doubt I would switch…but would consider what another institution has to offerI would definitely think about switching…if it had something betterI frequently reevaluate my primary institution as the one I should be using; and I am actively looking for a new institution.

Cohen views inertia as an important deterrent for clients to change providers—a boon for customer retention. “In combination with the relatively slow-moving pace of industry change, financial-services providers have had the luxury of being reactionary more than a need to be visionary. The status quo is changing because:

  • Money-flows and new product introductions are increasingly global, and money-flows are subject to disruption
  • The internet and Amazon have changed customers’ expectations and experience standards
  • Younger consumers are less loyal and more interested in the latest new thing (crypto and de-fi, for example) than are more mature households.”

Cohen says that given a choice, and easy access to other providers, unhappy customers simply won’t return. “The internet makes it easy to find every possible option (often independently rated) by computer, tablet, or smartphone.” Are you already being ghosted by a significant number of clients?

The CFD’s MacroMonitor is a comprehensive survey of US households conducted every other year since 1978, and offers financial-services providers reliable, validated, single-source research about US economic households’ needs, attitudes, and behaviors. The MacroMonitor measures all financial areas: transactions, credit, assets, protection, and information and advice.  Each wave of the survey encompasses over 4,000 US households, including an oversample of2,000 affluent households reweighted to be representative of the US population.

Kehrer Bielan works with CFD to bring the power of the MacroMonitor data to our mutual clients, including identifying which clients you are at risk of losing, and what they are looking for.