Do Brands Sell?

January 1, 2017

United States

Bob Allexon

Glory

Do brands sell

Though there have been some positive developments, when it comes to customer satisfaction available evidence suggests that banks still have an issue. Recent surveys such as the UK Customer Satisfaction Index are disappointing in that they demonstrate the banking industry has significant opportunity for improvement in comparison with other sectors.

Let’s get back to basics. What do we mean by customer satisfaction and how do we measure it? Isn’t the internet wonderful! I recently read an article by an academic from the Transylvania University of Brasov that certainly challenged my thinking on the issue,

In terms of how you measure satisfaction, the article refers to the work of Ron Kaufman who goes beyond ‘good, bad and indifferent and suggest there are six levels of satisfaction starting with ‘criminal’ and reaching the giddy heights of ‘unbelievable’. Perhaps I should point out that only one company has ever achieved this highest ranking. Where I found myself on firmer ground was the idea of customer satisfaction being linked to people’s expectations – ‘service quality is a function of the gap between perception and expectations’. As changes in technology change the way services can be delivered so the expectations of today’s banking customers will be very different from those of customers ten or twenty years ago. As customer expectations increase so the achievement of high levels of customer satisfaction becomes more of a challenge.

Why is customer satisfaction important and do surveys provide the answers banks need in order to identify where action is required and what the particular response should be? As you will imagine there are very different ideas as to the correct approach. In banking it is all about stickiness or customer retention. For a progressive institution it is also about attracting new customers. At a time when the influence of social media provides new opportunities to change customer behavior one measurement of a company’s success is the response to the question ‘would you recommend it to a friend or colleague?’ Indeed, some would argue this is the only question that matters. The 2016 Cap Gemini World Retail Banking report considered the likelihood of customers to stay, refer and buy from their Primary bank. 38.4 percent reported that they would recommend their bank, which suggests there is room for improvement. The report confirms that customers are significantly more likely to recommend the bank if their experience is positive.

Of course it’s not a simple yes or no. Some might feel so strongly that they would recommend their friends not to use a service. This is where we come to the concept of Net Promoter Score. On balance would more people recommend the service? I’m still not convinced. This presumes that all views are equal and as those of us that use Trip Advisor in choosing a hotel or restaurant already know, one really bad review can undo the impression given by a series of fairly positive reports.

Where does this leave us? I think we can all agree that the measurement of customer satisfaction levels is an important if complex matter. The bar is continually changing as customer behaviors and expectations evolve. Indeed different age groups want different things. Can you satisfy everyone? If not, who are your most important and profitable customers? Does the 80-20 principle apply? Do you know who your most profitable customers are and what they require from you? Do the same rules apply when it comes to attracting new younger customers?

I don’t pretend to know all the answers but when it comes to customer surveys the important thing will always be ‘are we asking the right questions?’

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