Over the past month, we received lots of questions about better defining what we mean when we talk customer satisfaction. Banks use predominately one or more of four key measures. If your bank prides itself on service then it should be tracking satisfaction in some fashion in order to improve. If not, you never really know that your main value proposition is any better or any worse than it was last year or is it any better than your competition. Aside, from the general trend, measuring customer satisfaction at banks results in five distinct advantages that accrue directly to net income:
- Increases lifetime value and thereby profitability
- Focuses staff on what a prioritized list of what is really important
- Highlights those customers that are most likely to defect
- Increases word of mouth, while reduces negative sentiment
- Provides an accurate predictor of future cross-sell
To find, track and manage customer satisfactions, banks use a variety of survey tools to include online applications designed specifically for satisfaction, survey applications adopted for customer satisfaction and specialty tools to include mobile and website pop up applications. Of these, here are our favorites: SurveyMonkey, Customer Sure, Client Heartbeat, Temper, and Customer Thermometer.
However, before you decide on a survey tool and a method, first decide what measurements you want to track. Here, you have four ways to accomplish obtaining customer satisfaction measurement:
Openness For Referral Measurement
This theoretical behavior measure in one of the most popular in banking circles but is also the most controversial. This is the basis of a Net Promoter Score which is the closest thing that customer satisfaction has to a Desperate Housewives of Whatever fan club. The measure is not terrible complicated, it is fun to track, its volatile and some say results in little substance. It asks the question: “Would you recommend [Insert Bank] to your family and friends?”
Fans say that industries and even major banks are well-benchmarked using this approach so comparisons are easy. More importantly, customer loyalty is one of the best predictors of cross-sell success so this easy to use measure is said to give you very actionable data.
Detractors on the other hand, say that such a simple measure can’t tell you much and is not actionable despite what proponents say. If your bank has a low score, what do you do? Is it hard to tell if the score is about the bank, the rates, the product or the branch location? By itself, the number tells you little and must always be used in comparison.
Because of the issues with the Net Promoter Score, some bank measure loyalty using a combination of measures including likeliness to recommend, overall satisfaction and likelihood of transact other products. Using this trifecta, some banks claim to have a better measure.
General Satisfaction Measure
Unlike the behavior measure of openness for referral, this emotional measure asks the question, “How satisfied are you with [Insert Bank Name]?”
This line of questioning is often expanded on as banks ask about separate ratings for a wide variety of attributes including:
- Banker helpfulness
- Hours of operation
- Rates and fees
- Service consistency
Attribute Satisfaction and Ranking
This is the most complicated of the group, but tends to give the best actionable information. If you don’t poll too often, this is thought to be the best all-around methodology by experienced bankers. Here two questions are asked for each attribute. For example:
“On a scale to 1 to 10, rate your satisfaction with the checking account’s value.”
How important is value to your decision to choose the checking account?”
Bankers can now tell overall satisfaction as well as component satisfaction and understand the weighting of each. This rating system is taxing for some customers, which is why it is often paired with a focus group or a reward. Measuring affect (the registration of liking or disliking) and satisfaction are closely related concepts and can be used as a single combined number, or as a trend.
Intentions to Transact
This behavior measure is probably the least used by banks of the bunch, but it asks the question, “If you needed a [insert product], would you consider [insert bank name]?”
Because the question is worded about future or hypothetical behavior, customers project the bank’s or product’s impression onto that theoretical decision. Results of this question tend to reflect past experiences and overall brand impressions and are said to sum a feeling of real or perceived value. Detractors say intentions are a poor form of gather opinion and satisfaction information and are not an accurate predictor of future sales.
No matter what methodology you use, customer satisfaction plays an important role in building a valuable banking franchise. Not only can scores be used to project sales, improve the customer experience, stop unhappy customers from leaving, reduce churn and increase cross-sell, but the measurement of satisfaction will also point the way on how to differentiate value compared to competing banks. This will result in a strategic advantage few banks can match.
Submitted by Chris Nichols on August 27, 2014