J.D. Power: Don’t Sell, Advise

What do consumers think about their financial service providers? In a recent report, J.D. Power surveyed 1,000 customers in order to answer just that question and to reveal the perceptions consumers had of their experience with financial services.

What they found is that most customers are pleased with their bank or lender, and these companies are enjoying strong customer loyalty. Eighty-one percent of those surveyed believe their bank acts ethically, 82 percent trust their bank to do the right thing, and 79 percent feel their bank acts in their best interest. However, 17 percent of mortgage customers regretted choosing their lender. Out of this 17 percent, 72 percent said there was too much pressure on them to choose a specific product. Only 6 percent of customers with no buyer’s remorse say they felt pressured.

With so much pressure put on them, customers may be confused about what product they are being offered. Among that 17 percent of mortgage customers who regretted their final choice of product, 24 percent say that the loan rep did not explain the loan terms. Mortgage customers experiencing buyer’s remorse or sales pressure are three times less likely to consider using the same lender on a different mortgage and over twice as likely to not recommend a lender.

J.D. Power’s study finds that 67 percent of customers who “strongly agree” that their bank/lender works with them to find the right product say that they “definitely will” be a returning customer. Sixty percent of customers act on the advice that they have been given and 62 percent open new products, but only 34 percent of customers who did not receive advice open new products. J.D. Power suggests approaching customers with a mindset of advising customers rather than selling a product. Avoid the hard sell when a customer is choosing a mortgage product and focus on assisting the customer in making the best decision to gain customer loyalty.

View the full report from J.D. Power here.