If you stayed the course last year and never switched banks, wireless companies, pay TV services, or any other providers, then you’re in the minority. And if you actually feel “very loyal” to your providers, then you’re part of an even smaller minority.
Among the main findings of the Accenture 2011 Global Consumer Research Study are these:
“Only an average of one in four consumers feels ‘very loyal’ to his or her providers across industries, and just as many profess no loyalty at all. Furthermore, two-thirds of consumers switched providers in at least one industry in the past year due to poor customer service.”
In the modern-day consumer-provider relationship, the typical bank, pay TV service, or wireless company plays the role of the bad, untrustworthy, borderline-abusive boyfriend that the consumer will break up with once a better option comes along. When asked in the Accenture survey what frustrates them most about providers, the most popular response from consumers is “having the company deliver something different than what they promise upfront.”
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The numbers backing up the survey’s sentiments are everywhere. Every quarter seems to bring with it new reports of hundreds of thousands of cable subscribers canceling their services. Overall, according to Accenture data, there was a 5% increase last year in the percentage of wireless phone, cable TV, and gas and electric utilities services.
The biggest upheaval may be in the consumer banking sector. The Los Angeles Times reports that 5.6 million Americans switched banks during the last three months of 2011, including 610,000 who swapped financial institutions on Bank Transfer Day or afterward to protest new debit card fees. In the fallout after Bank of America attempted to institute a $5 monthly debit card fee, BofA admitted that account closings leaped 20% in the fourth quarter of 2011.
Bank customers slowly seem to be getting wise about avoiding fees—overdraft fees in particular. Collectively, consumers paid nearly $30 billion in overdraft fees in 2011. That’s a shocking number. But it represents a decline from the year before ($33 billion), and the all-time high year for overdrafts, 2009 ($37 billion). What makes the decline especially noteworthy is that overdraft revenues decreased at the same time that the average overdraft fee rose by $2.50. What this means is that fewer customers are paying overdraft fees, and many have discovered that the easiest way to avoid fees is by switching to a bank that is less likely to charge them.
Citing data from the Moebs research firm, the Credit Union Times notes that the average number of overdrafts per household was 6.7 in 2011, representing an 18% drop from 2010, and a whopping 31% decrease from 2009.
Major banks aren’t the only financial institutions that collected less via overdrafts. Credit unions, which charge $25 for an overdraft fee, on average, compared to $30 at other banks, collected $1.4 billion less in overdraft fees in 2011—$4 billion, compared to $5.4 billion in 2010. When asked how credit unions could boost their businesses, Moebs CEO Michael Moebs told the CU Times that he’d advise credit unions to cut overdraft fees further, so that consumers see an even bigger difference between them and the major banks:
“We’re seeing credit unions sit on the sidelines of the overdraft business when they could be getting into it,” Moebs said. “If they lower their prices, the result will be an increase in checking account holders, which will raise their overall profitability.”
The propensity for customers to bounce from provider to provider is in sync with a larger phenomenon that’s risen throughout the economically uncertain recession era. It’s what a Bloomberg story describes as the “commitment-phobic” U.S. consumer.
Who is this commitment-o-phobe? He’s someone who rents housing (because he’s scared to buy in this market), who leases automobiles or opts for car sharing (because he’d rather not drop big bucks to own a car outright), and who delays being a parent (because a kid is likely to be the biggest expense of all). He’s also somebody who is very likely to have recently switched banks, cable companies, or wireless providers—perhaps even signing up with a no-contract, pay-as-you-go plan, to avoid any of those pesky longer-term commitments.
Chances are this is a consumer who sounds familiar. You probably see him in the mirror.