Survey: good service makes investors loyal

By IR Web Report Staff

Even when they are not specifically designed to answer IR questions, surveys of investors provide useful insight for investor relations communicators.

Take the the J.D. Power and Associates 2006 Full-Service Investor Satisfaction Study released yesterday. It analyzes the key factors that make investors loyal and satisfied with full service brokerage firms.

One of the key findings from the survey, which covered 5,000 investors, is that overall satisfaction is driven not only by the advisor/broker, but also by the support staff, particularly customer service representatives.

Overall satisfaction levels decline significantly when even one issue is encountered. However, if an issue is resolved by only having to work with one person, satisfaction levels are higher.

“Highly satisfied and committed clients must be viewed as an investment firm’s most valued asset,” James Lohmann, senior director of investment services research at J.D. Power and Associates, said in a press release.

“By efficiently and effectively handling customer service issues, investment firms can increase and maintain satisfaction among their clients, which in the long run places a greater share of liquid assets under management.”

In fact, the study found that investors who are highly committed to their full-service investment firms generate 12 times more new investment dollars per year compared to clients with lower commitment.

They are 33 times less likely to leave their primary investment firm than are those with low commitment levels. They are also nearly five times more likely to recommend their firm.

Although this survey is focused on investors’ views of full-service brokerages, it still offers useful insights for IR communications professionals.

The message seems to be that providing online services for shareholders and being fast and efficient with service enquiries can build shareholder loyalty. Excellent service may also encourage investors to add to their holdings in the company and recommend the company to friends and family.

One measure of how well your company is doing in this regard is its score in the Service dimension of the user experience evaluation we include in your six monthly reports.

Also relevant are your site’s category scores for contact information; shareholder services and resources; push technologies and navigation and document formats.

We expect that service features on IR websites will become increasingly important in the future. In part, this is because new technologies like corporate blogs are creating an expectation that big companies should be more accessible and responsive to their stakeholders.

Related posts:

1. Why almost no one is complying with Regulation FD
2. Broadridge’s social network for investors launches
3. How to do IR in a bear market
4. SEC survey a reality check on retail investor web use
5. SEC’s new guidance for websites and blogs posted

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