US credit card issuers are working tirelessly on
improving customer service, but still trail significantly behind
not only major retailers, but other financial services product
providers, according to a recent report. Charles Davis
reports.

Market research company Forrester’s recently
published report’ Customer Experience Index Snapshot: Credit Card
Providers, based on 5,000 US consumers surveyed online during the
third quarter of 2007 about their interactions with a variety of
companies to gauge the usefulness, usability, and enjoyability of
their experiences, found mediocre responses at best for the 11
credit card providers included in the index.

Of the nine industries studied, credit card
issuers finished fourth overall, and while American Express led the
way in the rankings, none of the issuers delivered enjoyable
interactions. With an overall Customer Experience Index Snapshot,
or CxPi, of 67 percent, credit card issuers studied found their
overall ratings dragged down by a low enjoyableness rating of just
49 percent.

Five credit card providers ended up with “good”
ratings: American Express (77 percent), Wells Fargo (73 percent),
Juniper Bank (72 percent), US Bank (71 percent), and Discover (71
percent). Amex was at, or tied for, the top in each of the three
elements of the CxPi, while Bank of America (60 percent), HSBC (62
percent), and Capital One (62 percent) ended up at the bottom of
the list.

In terms of usefulness, four credit card issuers
received an “excellent” rating: American Express (85 percent),
Juniper Bank (82 percent), US Bank (82 percent) and Discover
Financial Services (80 percent). In terms of being easy to work
with, only two issuers received an “excellent” rating: Amex (86
percent) and Discover (81 percent).

On the question of how much consumers enjoy doing
business with company, credit card firms fared worse, with Amex,
Wells Fargo and Juniper each receiving an “OK” rating (60 percent
each). Five issuers received a “very poor” rating in consumers’
enjoyment of doing business with them: Bank of America (42
percent), HSBC (46 percent), Capital One (46 percent), JPMorgan
Chase (46 percent) and Citibank (47 percent).

The lack of enjoyability in dealing with credit
card firms is consistent with some of Forrester’s earlier findings.
In previous research, the firm found that 44 percent of credit card
customers fell into an “at-risk” segment based on their lack of
enjoyment of, and willingness to switch away from, their current
providers.

CUSTOMER SERVICE

That is a real cause for concern for issuers, because Forrester’s
research shows that these at-risk consumers are young and affluent.
These consumers most often complain about poor sales help. The
at-risk segment represents the youngest (average age 44) and
highest income (median income of $57,500) group. The risk is
greatest for issuers in precisely the demographic they covet most,
and will worsen unless issuers take aggressive steps to target
these cardholders.

To make experiences more enjoyable for this
younger audience, providers will need to design interactions that
meet their particular needs and interests, the report said.

The report found that in many companies, key
decisions are made based on a very limited (and sometimes
inaccurate) view of customers. Companies need to shift this
“inside-out” thinking to a more “outside-in” perspective by
systematically incorporating the voice of the customer.

The key to improving the customer experience may
lie in ensuring that the firm has a dedicated executive in place to
spearhead improvements.

“The place where a customer experience problem is
identified is often not the place where systemic solutions need to
occur,” the report said. Improvements need to encompass more than
just front-line employees and customer-facing processes. That’s why
customer experience requires a cross-functional initiative. Given
the enterprise-wide span of these efforts, firms need a dedicated
executive to lead the effort.”

When placed against the rest of the industries
studied, the weaknesses of the credit card sector are made plain.
Retailers take nine out of the top 10 spots. It’s worth noting that
of the bottom 10 companies of 112 studied, Citi and JP Morgan Chase
finished just above cable companies, telecommunications giants and
the US Medicaid system.

Credit card issuers trail not only mainstream
retailers, but also lag significantly behind investment firms and
insurance companies. Other consumer banking products, from checking
accounts to online banking services, also scored higher, though not
by much. Clearly, much work remains to be done.