NatWest’s recent technology glitches with ATM machines and the resulting outcry of disgruntled customers on twitter, demonstrated only too clearly that a customer’s relationship with their bank is something that can be undermined with tremendous speed by any channel. We recently carried out a study in which we looked at customer loyalty towards retail banks, surveying a nationally representative sample of 1,322 bank customers. The idea was to examine how people interact with their main financial service provider (identified as the bank where they had their current account) and to find out how satisfied they are with their overall customer experience.  Specifically, we explored:

1. How frequently do customers interact with different channels of their main bank (i.e. branches, online banking and call centres)?

2. How does the use of different channels relate to perceptions of the overall experience at a customer’s main bank and towards overall customer loyalty?

4. What stands out as most memorable about their experiences of different channels?

5. How do customer experiences influence customer loyalty to their main bank?

Guidance on how to improve customer experiences
These questions unearthed useful indicators on ways banks can reach out to customers using their preferred contact channel; how banks can resolve a customer’s issues and how they might cement loyalty by increasing satisfaction at specific touch points.

Most customers choose online banking for their regular banking needs. 60% of customers claim to access their online bank account regularly (once a week or more often). Customers are less likely to use branches for regular banking needs. Only 38% of customers say they visit their branch regularly (once or twice each month or more often). Only 10% of customers contact the call centre on a regular basis (once or twice each month or more often).

We found that regular users of online banking are most likely to the stay with their main bank (54%) whilst regular users of the call centre are the least likely to stay (41%). Customers who regularly use both branches and online banking systems were no more loyal that those who solely use branches or online banking regularly – suggesting multichannel customers are no more loyal than single channel customers.

While it may not be surprising that the use of call centres indicates least loyalty – it may be that customers are calling to discuss a problem or issue – this is still a big opportunity for banks to build better relationships. The difference in satisfaction between best and worst contact channels (36% versus 31%) gives the banks immediate areas of opportunity to work on. Think too of the benchmark set by First Direct a bank with no bricks and motor branches yet consistently achieves high experience ratings by its customers.

What makes a memorable experience?
Maritz looked at what stands out as a positive, memorable experience with each type of customer interaction with their bank.  For branch experiences 47% of customers state the friendliness of staff, 35% state staff competence and 30% state staff communicating clearly as the most memorably good experience (top 3 items – customers could select more than one item from a list of 12).For online banking systems 48% of customers state speed of account access, 45% stated conducting the transaction I want and 42% stated website security as the most memorably good experience (top 3 items – customers could select more than one item from a list of 10). Finally, call centre customers state speed of getting through to a real person;6% of customers state ability of the first person I speak with to help me and 5% of customers state ability to completely resolve my issue as memorably bad experiences (top 3 items – customers could select more than one item from a list of 12).

Customer satisfaction and its impact on the lifetime value of the customer 

We also asked customers to rate how satisfied they were with the overall experiences they have with their main bank, to state which retail banks they would not consider and to state which main bank they would consider if they were to open a new financial product over the next 12 months.

If a bank is doing a good job then you would expect its own customers to look no further for a new product, but if the bank is not doing a good job that bank might not even get on their customers shopping list next time around. So we came up with a simple measure of ’Net Brand Consideration’. This is calculated by taking the percentage of current customers who say they would consider their existing provider as the main provider for their next product and subtracting from this the percentage of customers who say they would not consider their existing provider at all.

Chart showing relationship between retail bank experience and bank consideration

As you can see from the chart, we found that Co-operative Bank, First Direct and Nationwide lead in Net Brand Consideration, with 63%, 53% and 50% respectively. Other retail banking brands such as Lloyds TSB, Barclays and NatWest have net brand consideration ratings well below 50%. Customer satisfaction ratings from existing customers for these banks are low. RBS performed very poorly with a net brand consideration of a mere 4%.

There is no magic wand to wave over all contact channels. In our experience most organisations have pockets of excellence, where customers get great service. The big challenge for banks is to achieve a level of consistency so that every interaction is remembered for the right reasons. Maybe that is one reason why customers of online systems have the greatest loyalty. They know what they want to achieve with each visit and they know they can do it quickly, easily and securely on each occasion. If you want your customers to love you, you need to deliver consistently great experiences no matter how they choose to contact you. With mobile banking and social media channels that challenge just gets tougher.

 

About the Author: Dr Jeremy Griffiths, Business Services Director, Maritz Research has been at Maritz Research since 1998, drawing upon his Marketing Science background and Social Media Analysis experience to design integrated research solutions. He has worked across a range of sectors and with clients such as  HSBC, Nationwide Building Society, Bank of America, O2, T- Mobile, Best Western, The Cooperative Group, Volkswagen Group, and Adidas. He’s led both qualitative and quantitative projects involving customer experience, mystery customer, employee engagement and social media insights. Jeremy has also been instrumental in the development of the Customer Dimension of the Maritz Customer Experience 3D Framework.

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