Chapter 2
USAA: Millions of Customers, One Bank Branch
USAA [http://bi.galegroup.com/essentials/company/201767?u=tlearn_trl] (United States
Automobile Association) maintains only one bank branch to serve more than 8 million
consumers worldwide, yet it boasts a 98 percent customer retention rate and often ranks way
ahead of competitors in surveys of customer service and satisfaction. Hundreds of banks,
brokerage firms, and other financial services firms offer checking and savings accounts,
insurance, mortgage loans, and credit cards; some of these have extensive branch systems and
ATM networks. So why do consumers choose USAA—and why do they remain customers, year
after year?
USAA specializes in serving military personnel and their families, including those on active
duty and those who have left the military due to retirement or honorable separation. Although
some of its products are available to the general public, the firm’s marketing efforts are primarily
geared toward consumers in uniform and their spouses and children. Many of these consumers
have much in common with nonmilitary consumers: They marry, start a family, buy cars or
trucks, look forward to buying a home, save for their children’s college education, and as
retirement approaches, worry about financial security. However, consumers in this segment also
face difficult challenges unique to the military life, such as being deployed many miles from
home, frequent or unexpected transfers, lengthy separations from family members, and eventual
transition to civilian life.
In marketing [https://www.youtube.com/user/usaa] to this segment, USAA focuses on these
consumers’ particular needs, goals, values, and self-concepts. All members of a military family
may not be on the same continent for weeks or months at a time, but each adult in the household
will still need access to the family’s accounts, insurance, and so on. In response, USAA offers a
variety of ways to manage money matters at any hour from any location via phone or Internet. It
was an early adopter of apps for cell phone banking, including an app for scanning and
depositing checks without an in-person branch visit. Customers receive daily text messages with
updated balance details, whether they’re at home or on overseas assignment. The website is full
of details that are available 24/7, and e-mail assistance is just a few clicks away.
For more personalized attention, customers can make a call and speak with one of USAA’s
12,000 representatives, who will discuss their needs, inquire about their goals, and then offer
advice on choosing the right product. In the past, customers had to determine who to call at
USAA when they wanted information—should they contact the banking department or the
financial advisory department about retirement accounts? Now USAA makes it easier to get
information by phone or online according to life event (getting married or divorced, planning for
retirement) or product (home insurance, car loans). And instead of pushing for an immediate
purchase, USAA’s phone reps are trained to make suggestions that will best serve the customer
in the long run. “The answer may be to not buy that product, if that is the right thing to do for the
[customer] in that situation,” says a top USAA official.
Online at the USAA site [https://www.usaa.com/inet/ent_logon/Logon?redirectjsp=true],
customers can get information at their own pace, including watching video seminars, reading
experts’ blog entries, and posting questions or comments on customer-only forums. While
researching complex issues such as retirement options, any customer can arrange an individual
consultation with USAA’s financial advisors via videoconference. USAA’s professionals do
more than answer questions and educate customers about their choices: They also communicate
respect for their customers. As one customer observes: “It’s not every day I get addressed
‘sergeant’ by a customer service agent.”
i
CASE QUESTIONS
1. How does USAA enhance consumer motivation by making itself and its offerings
personally relevant to customers?
2. What is USAA doing to facilitate consumers’ ability and opportunity to process
information about its services and make informed financial decisions?
3. What types of needs (functional, symbolic, hedonic, social, nonsocial) are USAA’s
customers likely to experience? How does USAA respond to these needs?
4. Does USAA do anything to reduce perceived risk? Explain your answer.
i