Small-business owners’ satisfaction with their banks continues to slide, taking their loyalty with it, according to J.D. Power & Associates’ 2010 U.S. Small Business Banking Satisfaction Study. And that could hurt bank-based financial advisors’ relationships with their small-business-owner clients.
The drop in customer satisfaction is despite the fact that customers’ perception of their bank’s financial stability has improved, along with their sense of the economic and personal financial outlook, the study found. Small-business owner satisfaction is now 711 on a 1,000-point scale, down from 718 last year. Only 19% of these customers will “definitely” use their bank for additional business products, down from 34% in 2008.
Small-business owners respond particularly well to bank officers who clearly understand their business and act as a partner on the financial side. “Account managers have to take a lesson from financial advisors and become trusted partners who communicate proactively and are transparent about fees,” said Michael Beird, director of banking services for J.D. Power in Troy, Mich. “It’s not enough just to be assigned an account; you have to become a trusted partner.”
Fees are the No. 1 complaint by small-business owners against banks. It’s not that small-business owners mind paying fees when they know what they’re getting in return, but many banks aren’t open about their fee structure and perpetually tinker with how and when they charge. “About 25% of small-business owners said changing fee structure was a major driver” of their discontent, Beird said.
Small-business owners also expect error-free transactions. Since small-business owners are already angry about mysterious fees, snafus cost banks 110 satisfaction points on average.
Some 20 banks beat the average customer satisfaction rate, but not by much. The top five banks, all recipients of J.D. Powers’ five Power Circle Ratings, are Sun Trust (751 points), Huntington National Bank (748), Key Bank (747), BB&T (746) and Regions Bank (746). The two worst performers in the ranking, with 682 points apiece, are Bank of America and Citibank.
Beird said the biggest challenge banks face is deciding whether small-business owners are commercial clients or retail clients. “Accountability for who owns the small-business owner relationship is a major step,” he said. “We know Citibank is looking into this and hopefully we’ll see a change in its score next year. But it takes real dedication to move these numbers.”