Many executives consider service failures an opportunity to delight their customers, thereby ultimately increasing customer loyalty. But this conception doesn’t hold true in the financial services industry and is a lofty goal for the majority of financial institutions. Why? Only 10 percent of customers who report a bad experience say the offending organization resolved the issue effectively.
Corporate Executive Board (CEB) surveyed 5,000 financial services customers across seven countries to shed light on how firms manage complaints. Additionally, we created a model that measures customers’ loyalty by looking at their intent to remain customers, intent to purchase additional products, willingness to pay more for existing products, and willingness to recommend the company to friends and family.
What we found surprised us. In the 12 months prior to the survey, one in three participants reported having a bad interaction with a financial services provider—significantly more than executives suspected. Furthermore, while financial services executives are convinced of the efficacy of their (mostly centralized) problem-resolution processes, only 52 percent of customers who have a bad experience say their financial institution attempted to resolve the issue. Of those customers whose issues the firms “resolved,” not even half thought the resolutions satisfactory.
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