Many small businesses are feeling neglected by their banks as satisfaction in nearly every factor declines, according to the J.D. Power 2017 U.S. Small Business Banking Satisfaction Study.
“Small business banking is one of only two financial services industries measured by J.D. Power to show year-over-year declines in customer satisfaction in 2017,” said Bob Neuhaus, financial aervices consultant at J.D. Power. “The performance gaps we’re seeing are pervasive, affecting virtually every customer touch point with the bank. Customers without an account manager and non-borrowers are especially vulnerable to competitive poaching and represent an important opportunity for banks to deepen relationships across multiple products.”
Small and mid-sized banks were not part of the study.
The rankings showed M&T ranking highest in small business banking satisfaction in the Northeast region. In Delaware, which is in the Southern region, TD ranked first.
- Small business banking satisfaction declining: Overall small business bank customer satisfaction declines to 790 (on a 1,000-point scale) in 2017 from 797 in 2016, driven primarily by declines in account activities (-1.9 points); problem resolution (-1.5); fees (-1.5); and account manager (-0.8).
- Account managers play major role in relationship: Overall satisfaction is 135 points higher among small business customers who have been assigned an account manager and who say they feel they have a full partnership with that account manager (887) vs. those who do not have an account manager (752). However, customers who indicate having an account manager that does not fully understand their needs are even less satisfied (743) than those who have no account manager at all. Currently, just 52% of small business customers say they have been assigned an account manager.
- Small business lending is a window to improving customer relationships: Small business customers who have borrowed money from their banking institution are significantly more satisfied than non-borrowers (822 vs. 757, respectively). The borrowing process is an important opportunity for small businesses to build a trust-based relationship with their banks.
- Customers with account managers more likely to promote bank:Net Promoter Scores, which measure the percentage of customers who are loyal enthusiasts who keep doing business with a company and urge their friends to do the same, are a significant 29 points higher among small business banking customers who have an account manager assigned than those who do not.
The 2017 U.S. Small Business Banking Satisfaction Study includes responses from 8,378 small business owners or financial decision-makers who use business banking services. The study was fielded in June-August 2017.
For more information about the U.S. Small Business Banking Satisfaction Study, visit http://www.jdpower.com/resource/us-small-business-banking-satisfaction-study.
J.D. Power offers advisory services, data, and analytics.
(Update: A previous version of this story did not list Delaware as a Southern state).
