By Chuck Rogers
The results are in for Market Force Information’s 2018 U.S. Banking Consumer Experiences and Competitive Benchmarks Study and they show some significant movement in the rankings. For years, large retail banks have been striving to attain the famously high levels of customer satisfaction and loyalty that seem to be routine for USAA Federal Savings Bank. Despite the best of intentions—and significant investments made in technology, processes and personnel—even the best performing large retail banks have remained clustered together in the rankings as they compete for a distant second-place finish. This year, however, we’re seeing one of them break away from the pack and close the gap.
A snapshot of the 2018 rankings.
The study, which surveyed more than 7,400 U.S. consumers, found that all of the featured large retail banks demonstrated improvement in their performance as measured by the Composite Loyalty Index (CLI), an aggregation of consumer satisfaction and likelihood to recommend.
As a group, the top five large retail banks (Regions, Chase, Capital One, PNC, and U.S. Bank) saw their CLI scores increase an average of 8 percent, from 47 percent in 2017 to 55 percent this year. Given that USAA also improved its performance on the CLI, but only by 7 percent, the satisfaction gap was reduced by 1 percent.
Digging deeper, we discover that one of these large retail banks had a breakout year in 2018—Regions Bank. In fact, the sheer magnitude of Regions’ performance improvement as measured by the CLI on a year-over-year basis, indicates that they are well on their way towards joining USAA in delivering a best-in-class customer experience—not just in the category of large retail banks, but for the broader consumer financial services sector as a whole.
Regions’ customers awarded the bank with an impressive 14 percent improvement in its satisfaction and loyalty scores, far outpacing the improvement of the next-best performing large retail bank, Chase, which achieved a 10 percent increase. Most notably, Regions is now within 20 percent of USAA as measured by the CLI. While the margin is still substantial, it represents a significant reduction in the satisfaction gap.
What drives customer satisfaction and loyalty in banking?
Using advanced predictive data modeling techniques, Market Force’s team of data scientists have identified six key satisfaction drivers for retail banking customers. In order of importance, they are:
- Understands my unique needs
- Has my complete trust
- Resolves issues efficiently
- Easy frequent transactions
- Excellent reputation
- Charges fair rates/fees
Regions surpassed all other retail banks on every key satisfaction driver, with the exception of easy frequent transactions, where it trailed Chase by only 2 percent. Its performance was particularly strong when it came to understanding the customer’s needs, having their trust, resolving issues efficiently, and having an excellent reputation. Customer feedback on these drivers demonstrates Regions’ ability to create strong,
trust-based relationships with its customers through consistent execution of the behaviors that drive customer satisfaction.
Measuring the effects of customer satisfaction on customer delight.
When customers rate their bank as a five on a five-point scale, we call that “customer delight.” And how does a bank earn that honor? It goes back to those six drivers of customer satisfaction. When a bank performs well on just three of the six satisfaction drivers, it experiences a 51 percent lift in customer delight. If a bank performs well on all six satisfaction drivers, its customers reward it with a 90 percent lift in overall customer delight.
So why is delighting customers—rather than merely satisfying them—so important? Because delighted customers are 3.9 times more likely to recommend their bank to friends and family than merely satisfied customers.
Extending the momentum.
While credit is due to all the top performing retail banks in this year’s study—and their overall growth in customer satisfaction—it may be particularly instructive to take a closer look at what is happening at Regions. What’s behind its dramatic increase in customer satisfaction? Several things. Regions is executing well on virtually every key satisfaction driver. It also rates the highest satisfaction levels of any large retail bank featured in the 2018 study for the personal banker, teller and call center categories.
By observing companies that have successfully protected their brands, delighted their customers and increased sales, a framework of best practices emerges:
- Creating strategic alignment around the importance of the customer experience.
- Establishing multiple lenses to capture a comprehensive view of the customer experience (mystery shopping, surveys, social reviews, etc.).
- Conducting advanced predictive analytics to identify what’s most important—as well as opportunities for improvement that will deliver the greatest ROI.
- Launching platform reporting technology to create a single source of truth that helps people understand how they are performing and where they need to improve.
- Driving enterprise-wide transparency and accountability for taking action on data-driven insights.
Picking up the gauntlet.
The gauntlet has been thrown down. Despite the inherent challenges that come with competing with large and member-based financial institutions, banks are making great strides in customer satisfaction and loyalty. Will your bank pick up the gauntlet and accept the challenge?
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.