BofA + Merrill, The Customer Experience Angle
September 16, 2008 3 Comments
With Bank Of America buying Merrill Lynch, I thought I’d weigh in on the deal. Rather than joining the discussion about what it means to mega issues like the economy and financial markets, I’ll talk about the impact on customer experience. Let me start with my overall assessment: it can’t hurt too much.
In Forrester’s Customer Experience Index (CxPi) which ranked 112 US firms, Merrill Lynch came out 49th overall and next to last out of 10 investment firms; only beating out E*TRADE. It’s key problem: The investment firm is not easy to do business with.
Bank of America came out even lower, 91st overall, which was 10th out of 14 banks in the rankings. The bank’s problems spanned all areas of the CxPi.
My research has shown that there’s a high correlation between customer experience and customer loyalty in financial services. So there’s an enormous opportunity. But the questions is: Which firms will benefit?
If Bank Of America takes the opportunity to overhaul it’s customer experience as part of the integration, then it could mean a siginficant improvement in customer experience in a few years; good news for both its banking and investment clients. But the integration will likely take the financial giant’s focus away from customer experience in the short-run.
So there’s significant opportunity for other financial institutions to beef-up their customer experience and grab some market share. My guess at some of the winners in this battle: Wells Fargo, Wachovia, and some smaller banks. It might also be a good opportunity for TD Bank to expand its Commerce Bank footprint and for someone to buy Umpqua Bank. And, I’m adding Edward Jones to the list of firms that could be winners (see the comments on this post, thanks Eva).
The jury is still out on what this means to the behemoth Citibank, which was the worst ranked bank on the CxPi and near the bottom of the entire list of firms. My suggestion to Citi is the same as in my post from late last year: Two Words For Vikram Pandit (Citigroup CEO): “Customer Experience”
The bottom line: I’d make customer experience improvement a core tenet of the BofA/Merrill integration effort.