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These days, a high customer satisfaction score means almost nothing when it comes to winning new business.

It’s easy to believe that if customers are happy your bank must be meeting their needs, providing the services and products they want and doing so in a way that outshines your rivals. That’s no small feat in the retail banking industry, where seismic changes in technology and shifting customer preferences, coupled with the coming of age of Millennials, have ramped up competition like never before and put billions of dollars in revenue and profit at stake.

So surely, banks with high customer satisfaction scores have the “secret sauce” for winning new business, right?

Nope.

Many customer satisfaction scores were designed years ago with the laudable goal of measuring the interaction between customers and banking staff. A promoter score, for instance, aims to weigh customer loyalty by asking a single question -- Would you recommend our business to someone else?

Yet these measuring sticks for customer behavior provide little real information into why customers stay with a bank (or leave) and how deep their loyalty goes. A low promoter score doesn’t tell you what needs fixing. A high score doesn’t reveal if you’re missing opportunities to better connect with existing customers. Without that kind of insight, there is no way to know if a customer remains because they truly value your services and products, or if your high score is the byproduct low expectations and customers too apathetic to bother switching banks.

Those same benchmarks do next to nothing to reveal if you’re missing opportunities to lure new customers in the door.

The opportunity to capture new customers is out there. Data show that bank customers rarely use one bank for all their financial needs. And even so-called “satisfied customers” will defect to greener pastures under the right circumstances, especially younger customers. Data from Informa Research Services’ SEA Score, which measures member and customer engagement, show that the Millennials expected to drive the banking industry’s future growth are 73% more likely than Baby Boomers to depart to another financial institution.

But beware. Pushing products at customers to build stickiness and boost profitability does not guarantee that the bottom line will swell. According to Informa Research Services’ SEA Score, there is almost no correlation between a customer’s intention to stay with their current financial institution and whether they would use that same bank’s other financial products and services.

 

For more information on Informa Research Services' customer engagement and loyalty research and The SEA Score™ program, contact us at 800.848.0218 or email info@informars.com.

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