Bank Customer Survey Analysis
Loyalty Based Approach
Kinēsis employs a purchase intent based approach to client survey design. Our Key Driver Analysis, determines the relationship between specific service attributes and client loyalty.
Research has determined the business attribute with the highest correlation to profitability is client loyalty. Client loyalty lowers sales and acquisition costs per client by amortizing these costs across a longer lifetime – leading to some extraordinary financial results. Depending on the industry, a small increase in client loyalty (5%) translates into a 25% - 85% increase in profits.
Client loyalty is driven by the entire relationship with the company. Image, positioning, products, price, cost of switching, and service all form a value equation each client applies in their continuous decision to remain loyal.
Measuring client loyalty, however, in the context of a survey is difficult. Surveys best measure attitudes and perceptions. Loyalty is a behavior based on rational decisions clients make continually through the lifecycle of their relationship with the company. Client experience researchers therefore need to find a proxy measurement to determine client loyalty. One might measure client tenure under the assumption that length of relationship predicts loyalty. However, client tenure is a poor proxy. A client with a long tenure may leave the firm, or a new client may be very satisfied and highly loyal.
Kinēsis has had success with a model for estimating client loyalty based on two measurements: likelihood of referral and client advocacy. Likelihood of referral captures a measurement of the client’s likelihood to refer the company to a friend, relative or colleague. It stands to reason, if one is going to refer others to the bank, they will remain loyal as well. These promoters are putting their reputational risk on the line founded on a feeling of loyalty and trust. This concept of trust is perhaps more evident in the second measurement: client advocacy. Client advocacy is captured by measuring agreement with the following statement: “The Company cares about me, not just the bottom line.” Clients who agree with this statement trust the firm to do right by them, and will not subjugate their best interests to profits. Clients who trust the company to do the right thing are more likely to remain loyal.
Research has determined the business attribute with the highest correlation to profitability is client loyalty. Client loyalty lowers sales and acquisition costs per client by amortizing these costs across a longer lifetime – leading to some extraordinary financial results.