By Chuck Rogers
To identify where gaps exist, we begin by reviewing the current competitive landscape, as revealed in Market Force Information’s most recent annual U.S. Banking Customer Experiences and Competitive Benchmarks Study.
While the five traditional retail banks that perform highest in customer satisfaction and loyalty (Capital One, Regions Bank, US Bank, PNC Bank and Chase) are clustered together in the middle of the study’s Competitive Landscape chart, Navy Federal and USAA sit far to the upper right, demonstrating a superior ability to delight their members.
The ramifications of this gap get very real when one considers that the latest research shows customers of the top-performing traditional retail banks are more than twice as likely to consider switching banks in the next six months as those of Navy Federal and USAA.
When isolating bank satisfaction, it should be noted that the average level of delight (defined as the percentage of consumers that rate their overall satisfaction a 5 on a 5-point scale) among customers of the highest-performing traditional banks is 44%, whereas the average level of delight among Navy Federal and USAA members is markedly higher at 71%.
So why is delighting customers so important? Because delighted customers are 4.4 times more likely to recommend their bank to others than merely satisfied customers (according to predictive analytics conducted by Market Force’s team of data scientists).
In other words, it is no longer okay just to be okay.
To drill down deeper into the “top-line” satisfaction metrics, the same team of data scientists identified key satisfaction drivers using advanced predictive data modeling techniques. The six drivers, in order of importance, include:
- Understands my unique needs
- Has my complete trust
- Resolves issues efficiently
- Easy frequent transactions
- Excellent reputation
- Charges fair rates/fees
In combination, optimizing performance on these key drivers results in as much as a 90-point lift in customer satisfaction scores. And that translates into a significant increase in the percentage of customers who are likely to recommend their primary bank.
Sizing up the gap in satisfaction driver performance.
Let’s explore the relative performance of the leading traditional retail banks versus Navy Federal and USAA on the drivers that have the greatest impact on retail bank customer satisfaction.
On the two most impactful satisfaction drivers—“Understands my unique needs” and “Has my complete trust”—Navy Federal and USAA outperform the leading traditional banks by a factor of 2 to 1.
For the third and fourth most impactful drivers—“Resolves issues efficiently” and “Easy frequent transactions”—Navy Federal and USAA outperform the leading traditional retail banks a by a slightly more modest margin of 1.7 to 1 and 1.4 to 1, respectively. Lastly, Navy Federal and USAA outdo the best performing traditional retail banks on “Excellent reputation” and “Charges fair rates/fees” by 1.8 to 1 and 2.1 to 1, respectively.
A roadmap for closing the gap.
Over the last couple of decades, customer experience has emerged as a strategic priority for traditional banks. Not surprisingly, the industry has seen a parallel emergence of significant investments in customer experience consulting, training and technology. Despite the millions of dollars that have been spent to create world-class customer experiences, maximize customer loyalty, and reap the attendant financial rewards, the journey has proven to be more difficult than expected.
In speaking with customer experience professionals at large traditional retail banks across North America, I am hearing a common theme—they are acquiring an abundance of data, but are often hampered by inconsistent or, in some cases, non-existent data-driven execution.
The reality is that customer experience technology is advancing far more quickly than their ability to leverage the insights that emerge from that technology.
By observing and partnering with customer experience leaders from across multiple verticals, Market Force has captured the following best practices for improving the customer experience.
The foundational component of this framework is strategic alignment. In other words, ensure that the customer experience program’s objectives and the organization’s broader objectives are in sync. This is a critical step that includes creating an effective communication strategy and a process to continually assess and align KPIs, incentive plans, training, hiring practices, and technology.
Next, establish multiple lenses to secure a comprehensive view of the customer experience. The more relevant data streams you can capture, the better. Broadly speaking, these should include objective measures—such as those derived from mystery shopping—as well as subjective, perception-based measures acquired from customer surveys, employee surveys, and social media listening, to name a few. Include financial and operational data that is often viewed as outside the realm of customer experience. If you are only capturing one or two of these data streams, you are operating at a severe disadvantage. Oftentimes you’ll discover the blind spots only when you hit the proverbial brick wall.
As you capture an increasingly diverse array of data streams, you can then apply advanced predictive analytics to uncover three things:
- What’s most important
- Opportunities for improvement
- Which opportunities will drive the greatest return on your customer experience investment
Your customer experience team should then disseminate and leverage these data-driven insights throughout the organization. This can be accomplished through the use of an integrated technology reporting platform that provides everyone in the organization—from the CEO to line management—with an understanding of how they are doing across each performance metric (KPI) and where they need to focus their efforts to improve performance.
The final best practice is arguably the hardest. It involves creating a process to establish enterprise-wide transparency and accountability for taking action on data-driven insights. Once improvement begins, the bank must hold teams accountable for the new elevated level of performance.
As straightforward as these best practices sound, they are more easily described than executed. That being said, if traditional retail banks create the vision, commit themselves to the achievement of the vision and follow the best practices of customer experience leaders, they can shrink—if not altogether eliminate—the customer satisfaction and loyalty performance gaps that currently exist between them and their non-traditional competitors.
Chuck Rogers is the financial services practice leader for Market Force Information, a customer experience management company that helps businesses, including banks, protect their brand, delight customers and improve financial performance.