The 2013 Financial Institution Consumer Recommendation & Loyalty Study Advanced A study of the depth of consumer loyalty towards Australian Financial Institutions using the Net Promoter Score Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld. Page 1
Contents 1.0 Report Overview... 4 1.1 Introduction... 4 2.0 The Net Promoter Score... 7 2.1 What is the Net Promoter Score?... 7 2.2 Why is Net Promoter Score Popular?... 8 2.3 Is NPS relevant in challenging times?... 9 3.0 Comparison of Results to 2011-2012... 10 3.0 The Most Effective Marketing Channel... 11 4.0 Benchmarking Results... 12 4.1 Net Promoter Score by Financial Institution... 12 4.2 A Comparison of Net Promoter Scores Across the Different Types of Financial Institutions... 13 4.3 Comparison of Net Promoter Score s Internationally... 14 4.4 Promoters, Passives & Detractors by Brand... 15 4.5 Promoters by Brand... 16 4.6 Passives by Brand... 17 4.7 Detractors by Brand... 18 5.0 Primary Source of Purchase... 19 6.0 Net Promoter Score Analysis by Respondent Demographics... 20 6.1 Net Promoter Score Across Gender... 21 6.2 Net Promoter Score Across Customer Age... 22 6.3 Net Promoter Score Across Personal Income... 23 7.0 Brand Differentiation... 24 7.1 Percentage of Customers Across the Category Based on Brand Differentiation... 25 7.2 Net Promoter Score Based on Brand Differentiation... 26 7.3 Percentage of Customers Who Love Their Brand... 27 7.4 Percentage of Customers Who Do Not Love Their Brand or Do Not Believe It Is Better Than Other Brands... 28 8.0 Likelihood to remain a customer with current Financial Institution & NPS by Brand... 29 9.0 Satisfaction of Key Attributes / Interactions Across Financial Institutions... 30 9.1 Satisfaction with Overall Customer Service by Financial Institution... 31 9.2 Satisfaction with Overall Value by Financial Institution... 32 9.3 Satisfaction with Access to Additional Products by Financial Institution... 33 9.4 Satisfaction with Online Services by Financial Institution... 34 9.5 Satisfaction with Bank Staff by Financial Institution... 35 Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld. Page 2
9.6 Satisfaction with Branch Experience by Financial Institution... 36 9.7 Satisfaction with Call Centre Experience by Financial Institution... 37 9.8 Satisfaction with Fees and Charges by Financial Institution... 38 10.0 Customer Experiences Worthy of Recommendation... 39 11.0 Positive & Negative Comments... 40 11.1 Number of Positive & Negative Comments for the Financial Institution Category... 40 11.2 Average Number of Positive Comments by Brand... 41 11.3 Average Number of Negative Comments by Brand... 42 11.4 Average Number of Positive and Negative Comments Across Gender... 43 11.5 Average Number of Positive Comments When Source of Purchase is WOM vs Not WOM... 44 11.6 Percentage of New Product Uptake in the Past 12 Months Across Promoters and Detractors... 45 11.7 Number of Positive Comments Required to Neutralise a Single Negative Comment... 46 11.8 Neutralising Factor Across Gender... 47 12.0 Word of Mouth Business Economic Impact... 48 13.0 Respondent Reasons for their Recommend Score... 50 13.1 Analysis of Responses for Entire Financial institution Category... 51 13.2 ANZ... 52 13.3 Bendigo Bank... 53 13.4 Bank of Queensland... 54 13.5 Commonwealth Bank... 55 13.6 National Australia Bank... 56 13.7 St. George... 57 13.8 Suncorp... 58 13.9 Westpac Bank... 59 13.10 Credit unions... 60 13.11 Distinguishing Characteristics of Top Performers.... 61 14.0 Summary & Strategic Implications... 62 15.0 About Engaged Marketing... 63 Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld. Page 3
1.0 Report Overview 1.1 Introduction The 2013 Financial Institution Consumer Recommendation & Loyalty Study has been conducted to understand and measure the depth of consumer loyalty towards their chosen financial institutions. A secondary objective was to identify the key elements financial institutions must put in place to increase customer loyalty, positive word of mouth, and growth. The study allows organisations to easily compare themselves to others within their industry and, at a high level outlines the reasons behind the scores of high and low performers. The internationally renowned Net Promoter Score methodology was used to measure customer loyalty in the study. Net Promoter Score was developed by loyalty expert Frederick Reichheld of Bain & Company and Satmetrix Systems. The concept is outlined in detail in Reichheld s bestseller The Ultimate Question: Driving Good Profits and True Growth and is used by major organisations worldwide. The Net Promoter Score is calculated by asking respondents their likelihood to recommend their brand on a scale of 0-10 where 0 is highly unlikely and 10 is highly likely. Respondents that score 9 or 10 are called Promoters, 7 to 8 are called Passives and 0 to 6 are called Detractors. The Net Promoter Score is the percentage of Promoters less the percentage of Detractors. What this report includes: Effectiveness and importance of word of mouth in comparison to other marketing channels Net Promoter Scores for the following financial institutions and the overall category score: o ANZ o Bank of Queensland o Bendigo Bank o Commonwealth Bank o National Australia Bank o St. George o Suncorp o Westpac o Credit unions (amalgamated) Ranking of the above brands by the percentage of Promoters, Passives and Detractors Net Promoter Score analysis comparing Australia to the US, UK, France & Germany An analysis of the reasons consumers attribute to their likelihood to recommend a brand Number of positive and negative comments consumers make about their respective brands Percentage of consumers that selected their brand primarily because of word of mouth Quantification of the economic impact of both negative and positive word of mouth Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld. Page 4
NPS across demographics such as: o Age o Gender o Personal income Brand Differentiation & the impact on NPS o The percentage of customers that love their brand and the percentage of customers that believe that their brand is the same as other brands or worse than other brands or even hate their brand The key functional and emotional customer experience factors which Promoters consistently attribute to their brands. New Insights: In the Advanced version of the study for the first time the study includes the following: Propensity to renew with current provider graphed against the NPS of each financial institution Satisfaction mean scores by brand across: o Online services o Bank staff o Call centre experience o Branch experience o Access to additional products o Fees & charges o Overall customer service o Overall value Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld. Page 5
Though this study is comprehensive to gain further insight we can, upon request, tailor a detailed presentation based on your brand and 2 competitor brands. A more detailed presentation would include: A Customer Experience Health Check Find out what your customer experience signature looks like in terms of functional and emotional elements compared to your key competitors and industry norms Key Driver Analysis - Using advanced correlation analysis we can identify the key drivers of recommendation specific to your brand and two competitor brands Competitor gap analyses across various dimensions such as customer experience elements and open comment analysis Word of Mouth (WOM) economics for: o Promoters & Detractors of your brand o Your brand VS two of your competitors o Your brand s performance VS the industry average A sample of open comments Purchase propensity of Promoters VS Detractors High level recommendations to improve your Net Promoter Score Please contact us on 07-3168 1015 or enquiry@engagedmarketing.com.au for more information. Survey Methodology This is an independent survey conducted by Engaged Marketing Pty Ltd. Fieldwork for this benchmarking study was collected from 3365 respondents via an online opt-in survey in the second quarter of 2013. Respondents were recruited from throughout Australia. Care was taken to ensure the survey met the strict conditions for an NPS survey. All respondents were actual users/customers of the various brands. Only scores for brands with sample sizes equal to or greater than 100 were displayed. Hence the study only displays results for the most popular Australian financial institutions. However, the smaller organisations scores were included to calculate the overall industry scores. Certain responses, such as the neutralising factor, number of positive comments and negative comments, were capped to ensure that a few outlier respondents did not skew the economic analysis. Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld. Page 6