BofA + Merrill, The Customer Experience Angle

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.

Written by 

I am an experience management transformist, helping organizations improve business results by engaging the hearts and minds of their customers, employees, and partners. My "job" is Head of the Qualtrics XM Institute. The Institute is still being established, but our goal is to help organizations around the world thrive by mastering Experience Management (XM). As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. And, as many people know, I love to speak about these topics in almost any forum. Prior to joining Qualtrics, I was managing partner of Temkin Group (leading CX research, advisory, and training firm), co-founder and chair of the Customer Experience Professionals Association (, and a VP at Forrester Research. I'm a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Check out my LinkedIn profile:

3 thoughts on “BofA + Merrill, The Customer Experience Angle”

  1. you never mentioned edward jones – the uppest non big american reatiler in this ranking.. thats an interesting case because the only thing i found about them is that they responded to internet threat by putting stronger pressure on “face-to-face personal dealings with clients to offer them long-term, conservative investment advice” – its very diffcult to find any information about them though they look like number one excluding stores which entertaing people so much..

    from article on EJ
    “We have elected not to follow the crowd. We
    think online trading is for speculators and entertainment.
    We are not in the entertainment business.
    We are in the ‘peace of mind’ business.”
    How then is Edward Jones responding to the
    online threat? By purposely focusing on its established
    business model and using the Internet as an
    opportunity to improve its existing value proposition
    to its targeted customers. This means looking
    at the Internet as simply another distribution channel
    and using it to offer customers better service
    and more information. Jones’s value proposition is
    face-to-face personal dealings with clients to offer
    them long-term, conservative investment advice.
    As a result, the Internet is used not for online
    trading but as a way of enhancing the relationship
    with the customer. As the ex-CEO John Bachmann
    reiterated in a recent article in Fortune magazine:
    “You will not buy securities over the Internet at
    Edward Jones. That’s going to be true as far as I
    can see into the future. . . . If you aren’t interested
    in a relationship and you just want a transaction,
    then you could go to E*Trade if you want a good
    price. We just aren’t in that business.

  2. It’s really a shame that customer services is the first thing to go, whether it’s because of a merger, a shake-up or belt tightening. But there is definitely, as you indicate, a big difference between the big and the small banks here. Many smaller banks have not gambled with sub-prime mortgages the way that the larger brokers have, and are feeling a little more solid. Research indicates that customer satisfaction doesn’t matter as much if you are a monopoly or a virtual monopoly, but if the smaller banks can make inroads the customer experience may start to matter more to behemoths like Citibank and Bank of America.

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