Why Do Consumers Switch PFIs?
The top trigger is a change in the consumer’s life circumstances.
In 2011, 8.7% of consumers had changed their primary financial institution (PFI) within the previous 12 months.
That’s up from 7.7% in 2010, according to a J.D. Power & Associates study cited in CUNA’s 2011-2012 Survey of Potential Members.
According to the J.D. Power & Associates 2011 U.S. Retail Bank New Account Study, the top triggers to change providers are:
- Changes in consumers’ life circumstances (28%);
- Fees/rates (17%);
- Unmet expectations (13%);
- Customer service concerns (8%); and
- Advertising from other providers (7%).
Less-significant triggers include promotional gifts/cash (4%), wanting specific account features (3%), receiving a recommendation (2%), and branch closings (2%).
When choosing a new PFI, the top drivers were:
- Brand image (30%);
- Advertising (24%);
- Branch convenience (24%);
- Products/services (18%); and
- Low fees (4%).
Another finding researchers deemed “one of the most unexpected” was that only 43% of customers who bought an additional financial product made that purchase at their PFI.
In other words, PFI status doesn’t guarantee loyalty.
The researchers concluded, “Customers who choose to stay with their current primary bank for additional products are most driven by positive past experience and perceptions that their bank is more focused on customers than on profits.”
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