The People Agree: Twitter, Facebook, and LinkedIn Are All Worse than Bank of America

The most recent data from the American Customer Satisfaction Index (ACSI) is in, and there is one industry whose customers dislike it more than banks: Internet social media. 

It should come as no surprise that Bank of America (NYSE: BAC  ) has a customer satisfaction rating of 69 versus a broader banking sector average of 78 and trails top ranked megabank peer JPMorgan Chase (NYSE: JPM  ) , which tips the scales at 76. However, what may be surprising is that Bank of America actually beats the Internet social media ranking of 68.

Yet it isn't just that Bank of America beat out social media as a whole, but it actually resoundingly beats Twitter (NYSE: TWTR  ) , Facebook (NASDAQ: FB  ) , and LinkedIn (NYSE: LNKD  ) , as shown in the chart below:

Company / Industry

ACSI Benchmark

Banks

78

JPMorgan Chase

76

Bank of America

69

Internet Social Media

68

Twitter

65

Facebook

62

LinkedIn

62

Source: The American Customer Satisfaction Index.

The banks
Interestingly, this benchmark reading of 78 for banks came even despite the fact that fees rose for the 15th year in a row. Yet customers have found more ways to avoid such fees through using only bank-specific ATMs and maintaining account balance thresholds.

While the banks led the way with high marks when it came to interactions with staff and their courtesy and helpfulness, one of the biggest points of satisfaction from banking consumers was -- surprisingly -- satisfaction with the bank's websites.

The ASCI noted, "Website satisfaction with banks (85) is much higher than the national average of 78. Well-functioning websites are critical to cost efficiency as banks need to have customers do more of their banking online."

Unsurprisingly, the consumer satisfaction of banks fell following the financial crisis and subsequent missteps (like the $5 debit card fee fiasco at Bank of America), but the benchmark reading of 78 is back to pre-financial crisis levels, and well above the reading of 68 seen in 1999.

Is this thumb right-side-up?

The social media giants
Although the social media stalwarts Twitter, Facebook, and LinkedIn are all exclusively online enterprises whose businesses are made through customers spending time on their websites, they scored very low because they need advertisements to generate revenue; these ads often draw the ire of customers.

Yet it isn't simply just the advertising that contributes to the low scores, but also concerns about privacy, difficulty to use, and changing website interfaces. Even though users can often opt-out of certain features, the trouble of doing so often outweighs the benefits.

Troublingly for both shareholders and users, these problems have persisted over the years, and their satisfaction ratings are all flat over the last year. As the ASCI puts it, "[e]ven though users seem to be quite committed to social media, they rate the quality of these websites the lowest in the e-business category -- pages are deemed poorly organized and information difficult to find."

The Foolish bottom line
There is no denying that banks have faced countless troubles over the last few years, but the industry has recovered from the problems it encountered during the financial crisis and customers are increasingly more and more likely to be satisfied. While the social media giants still rate highly when it comes to customers' likelihood to continue to use the services, less satisfaction often means more opportunity for disruption.

While we may not know from where the disruption will come, keep an eye on how customers perceive these well-known institutions, because in both banks and social networks, a satisfied customer often means a satisfied shareholder.

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  • Report this Comment On January 05, 2014, at 10:22 PM, alexander774 wrote:

    It does not really matter the hottest stocks of 2014 will be Facebook and Twitter. And there is no doubt Facebook will hit $140 per share in the next 6 months.

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