Exclusive research carried out for MAPS by the National Opinion Poll (NOP) is at the heart of this report. Almost 1,000 adults were asked which aspects of customer service were important to them, and the most striking result is:

The paramount importance of knowledgeable and courteous staff.

There is no substitute for a direct relationship between the consumer and the company. "The more you treat your customers as individuals, by meeting and exceeding their needs, the more loyal they will be and the more inclined to buy further into the brand," said Simon Avison, managing director of New Solutions, in Marketing (June 6 1996). "The customer needs to see that the company uses. information to enhance the brand's benefits to him, rather than as a means to shower him with unsolicited promotions. Banks and building societies could use customer information constructively. Selling new services to their customers should be easy; the bank already holds a customer's details. And, with the data on screen, could offer those customers preferential facilities."

Other main findings include:

· There are many layers of loyalty, resulting from monopoly, inertia, attractive pricing, incentives, and emotional attachment.

· From the early years of the 21st century, the government will not be able to afford adequate pensions for all without a punitive increase in taxation.

· Household spending on financial services is at a relatively low level. Average weekly expenditure ranges from £17.82 on pension contributions and life assurance, down to 62p a week for insurances other than motor, contents and medical. Payments vary substantially according to income. The lowest decile paid £1.59 a week on life assurance and pensions, the top decile £57.63; the bottom decile saved 30p a week, the top decile £17.43.

· The national lottery has reduced by over £2 billion a year the amount of disposable income available for the purchase of financial services. This is 0.4 percent of all disposable income.

· More consumers are borrowing. In the year to the end of September 1996, the number of store credit accounts grew by 20 percent. The average size of households continues to fall, and consequently the number of separate households is rising. Each is a potential customer for contents insurance, and every mortgaged home must have buildings insurance.

· Deregulation in financial services, starting in 1982, has resulted in intense competition. Financial companies are diversifying into new sectors, and companies from outside finance are jumping in. At the same time, electronic technology has enabled companies to improve efficiency at the same time as reducing staff.

· Centralised call centres are enabling companies to reduce their branch networks, but NOP research for this report shows that 89 percent of adults regard convenient location of their bank or building society branch as important, and 69 percent like to deal with a small company that understands their needs.

· Profiling techniques such as descriptive customer classification help companies make effective use of their customer databases for targeting and marketing.

· The top six aspects of customer service, according to our NOP survey, are:

1.Well-informed staff who give advice

2.Easy-to-understand information and literature

3.Rapid response to queries

4.Courteous staff

5.Proper recompense for mistakes

6.Convenient location.

· Women are more likely than men to require convenient location, a small company understanding their particular needs, and 24 hour availability. They also rate rewards and discounts more highly. Differences between age groups are not substantial overall, although the 15-24s rate rewards and discounts much more highly than any other group, and the over 45s are less inclined to require 24 hour availability, and less enthusiastic about telephone and computer banking.

· Poor customer service is costing hundreds of millions of pounds annually. A customer with a complaint tells nine other people on average. Over five years of poor customer service, sales are likely to be a third lower than if service were good. Lost sales have disproportionately severe effects on profits.

· Nine customers out of 10 attach importance to receiving recompense if a bank or building society makes a mistake.

· Supermarket multiples Tesco, Sainsbury and Safeway have all announced their entry into banking, in partnership with National Westminster, Bank of Scotland, and Abbey National respectively. Tesco is offering 5.12 percent interest on credit balances, fixed until the end of 1996.

· Home visits are of importance to less than half the adults questioned by NOP.

· Direct sales have made little headway in the life and pensions markets. Telephone sales are a significant element of customer service for only 61 percent of those questioned, although this rises to 75 percent for those aged 15-24.

· Rewards and discounts are significant for 76 percent of adults questioned. They are of most importance to those aged 15-24 (87 percent).

· Employee satisfaction is crucial to customer satisfaction.

· Fewer than 4 adults in 100 have a bank TESSA or a unit trust holding in a PEP. Fewer than 3 in 100 have shares in an investment trust, fewer than 2 in 100 a building society term account, a gold or premier card, or an American Express card.

· More than 60 percent of women, and more than 60 percent of C2s and DEs expect to rely on the state pension or other state benefits at some stage of their lives.

· PEPs and TESSAs - tax efficient savings - are expected to show fastest growth to 2000, to £36 billion and £43 billion respectively. Life and pensions and unit trusts are likely to show steady growth ahead of inflation, to £131 billion and £133 billion. Deposit accounts are expected to increase only in line with inflation. In the insurance sector, accident and health premium income is expected to rise little more than the RP1.

· Consumers need education in personal finance. The launch of the Personal Finance Education Group is a move in the right direction. There is considerable scope to widen the uptake of financial services among sections of the population which can afford to provide for themselves, but who at present do not see the need, or who find the financial world too complex.