Recommendation Index Identifies Banks Most Recommended by U.S. Consumers

by News Guy on May 4, 2010

RECOMMENDATION INDEXSM IDENTIFIES BANKS MOST RECOMMENDED BY U.S. CONSUMERS – PNC, CREDIT UNIONS
AND WELLS FARGO LEAD PACK

Positive word of mouth (WOM) driven by customer service, interest rates and rewards
Negative WOM highlighted through poor customer service, overdraft fees and rate changes

CHICAGO, April 29, 2010 – As banks nationwide have closed, restructured or struggled to retain credibility, those institutions that are regarded by consumers as “friendly,” “polite” and “trusted” are most likely to be recommended, according to the latest quarterly Recommendation Index, a joint effort by Zócalo Group and M/A/R/C Research. Unlike other metrics that seek to identify whether or not consumers would recommend a brand, the Recommendation Index analyzes the action of consumers who actually are recommending brands and the specific words and themes they use in their conversations.

Leading the Recommendation Index among the most recommended consumer banks are: PNC Bank, Wells Fargo, Capital One, ING, Bank of America, HSBC, Merrill Lynch, Wachovia and JPMorgan Chase. It is important to also note that credit unions placed second on the list overall behind PNC Bank. While not a specific brand, credit unions are included as a group to reflect strong consumer sentiment for that definable category.

The Recommendation Index represents how much more likely a brand is to be recommended positively rather than negatively, accounting for not just the volume of conversation about a brand but also the nature of the recommendation. In addition to providing an overall ranking of both positively and negatively recommended brands, the Recommendation Index also creates a score that marketers can use to compare against other brands in the same category.

Top drivers of recommendation in the consumer banking category include: positive customer service experience, good interest rates, rewards programs and incentives, convenience (foremost online, followed by brand locations), and the perception of being trustworthy and dependable.

Not surprisingly, leading causes for negative consumer word of mouth include: poor customer service, followed by overdraft fees, changes to rates or services without adequate warning, the perception of being untrustworthy, and additional fees or charges.

“Positive word of mouth and recommendation are the leading drivers of a consumer’s intent to buy or purchase a product or service in most every category,” said Paul M. Rand, president and CEO of Zócalo Group. “Even with advanced banking products and services, successfully paying attention to basic customer service really matters for consumers.”

“The Recommendation Index doesn’t just look at how consumers talk, it also looks at their actions – making a positive or negative recommendation,” noted Merrill Dubrow, president and CEO of M/A/R/C Research. “Unlike other research that simply asks consumers if they would recommend a brand, the Recommendation Index looks at how and why consumers make those recommendations.”

Recommendation Index Results

The Recommendation Index represents the proportion of positive to negative recommendations and is calculated based on the brands most often talked about positively and negatively in the consumer banking category. It is a single score that provides a brand with a method for benchmarking how it is being recommended in relation to specific competitors and within the overall industry.

The Recommendation Index for the entire consumer banking category is 13.5, which was compiled from consumers’ online conversations of more than 40 banks. The index indicates that in this category consumers – on average – provide positive recommendations 13.5 times more often than negative recommendations. This industry average provides brands with a means for gauging their own level of recommendation against that of the overall industry. The table below lists the 10 banks with the highest volume of conversation and their corresponding Recommendation Indices.

Recommendation Index for the Top 10 Consumer Banks By Volume

1. PNC 22.0
2. Credit unions (general) 20.6
3. Wells Fargo 18.5
4. Capital One 17.3
5. ING 16.0
6. Bank of America 16.0
7. HSBC 12.5
8. Merrill Lynch 12.5
9. Wachovia 11.6
10. JPMorgan Chase 11.5

“Marketers who understand why and how brands are recommended in their category can ensure they pay attention to and are recognized for things that consumers value most,” said Dubrow. “And, of course, how the services are delivered makes all the difference.”
Methodology

The Recommendation Index was created by word-of-mouth-marketing firm Zócalo Group and research firm M/A/R/C Research and was compiled through both offline and online analysis of conversations about consumer banking. An offline questionnaire of 1,000 consumers captured the brands most often recommended and the attributes consumers used to make those recommendations.

The top brands identified in the offline study were then analyzed based on online conversations occurring through blogs, forums, Twitter and other discussion venues. Online analysis focused on the naturally occurring, organic conversations about those brands and the words consumers use in talking about the most recommended banks.

The Recommendation Index is the ratio of positive recommendations to negative recommendations. The Index is released quarterly with a focus on different industries and brands with the intent to show changes in recommendation by industry year over year.

Consumer banking is the second category profiled through the Recommendation Index. The casual dining industry was studied in the previous quarter.

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About Zócalo Group

Zócalo Group is a full-service word-of-mouth-marketing agency, helping clients become the most talked about and recommended brands in their category. Based in Chicago, Zócalo Group was named the Holmes Report’s 2009 “New Media Agency of the Year” for its work in social media, and was also honored for the 2009 Best Social Media Program by the Business Marketing Association. Zócalo Group is a unit of Omnicom Group, Inc. (NYSE: OMC). For more information, please visit www.zocalogroup.com or www.therecommendationindex.com.

About M/A/R/C Research

M/A/R/C Research is a brand development firm dedicated to helping clients create, evaluate and strengthen their brands. M/A/R/C designs and executes qualitative and quantitative, traditional and online solutions while adhering to a client-service ethic built on being easy to work with and delivering what is promised. A core competency is measuring attitudes and behaviors to accurately explain and predict market share, revenue and bottom line impact of a client’s actions. M/A/R/C has been successfully designing, executing and analyzing studies to help clients across a range of industries since 1965. M/A/R/C Research is a unit of Omnicom Group, Inc. (NYSE: OMC). For more information, please visit www.marcresearch.com

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