Put simply, Bank of America (NYSE:BAC) has struggled in recent years. But it turns out that's all changing.
The difficult stretch
Following the financial crisis and its subsequent missteps like the $5 debit card fee fiasco, countless people began to truly hate Bank of America. After all, the latest poll from Harris evaluating the reputation of the 60 largest companies in America revealed Bank of America had the lowest reputation of all firms, with a score of 55 on a 100 point scale.
There is much to be done when it comes to improving its reputation, but one of the principal places it needs to start with is its customers.
And it turns out, Bank of America has been doing just that.
The remarkable improvement
At its latest annual meeting, which was met by outbursts and protests, and a bizarre marriage proposal to CEO Brian Moynihan from a shareholder who said she loved him, Bank of America confronted many of the troubles that continue to plague it. Yet a particular slide from its presentation revealed the turnaround indeed is under way:
In typical banking fashion, the chart is communicated in basis points. But in short, it's showing if 50% of its customers were satisfied in 2011 that number now stands at 60%.
I say "if 50%" because the baseline numbers aren't shown, but an improvement of 10 percentage points from any number, whether it be 80% to 90% to or 30% to 40% would be a significant improvement.
Through online and mobile banking, time of processing requests, or more generally broader satisfaction, Bank of America is undeniably making significant improvement in the eyes of its customers.
Remember it was just a few weeks ago when we learned Bank of America's improvement in the J.D. Power customer satisfaction rating across the eleven areas outpaced the industry average.
With 92 million accounts, a gain of 10% means millions upon millions more are happy.
The key takeaway
When customers at Bank of America go from simply having a checking account to establishing more borrowing and investing relationships, the increase in revenue generated skyrockets from $340 to $3,000. By focusing on customer satisfaction, the company is rightly banking on developing these deeper -- more profitable -- connections, which means big impacts to both the top and bottom lines. Goldman Sachs Presentation, slide 18
There's clearly still a lot of room for improvement at Bank of America. And while we may be years away from a full turnaround, evidence like the chart above prove it's moving in the right direction, which could mean big things in the years to come.