Going to Extremes: Customers Run the Gamut in Their Loyalty to Banks

What kind of industry would represent the extremes of customer engagement and loyalty – from the strongest and most-likely to be recommended to the worst and least-likely to be recommended? No, it’s not the airlines, healthcare or telecom industries -- it’s banking and financial services, according to a new research report from Temkin Group (Waban, Mass.).

Based on a survey of 5,000 consumers, Temkin’s “Net Promoter Score Benchmark Study, 2012” calculates the Net Promoter Score (NPS) for 180 companies across 19 industries. According to Temkin, NPS identifies the likelihood of consumers to recommend a company to their friends and family.

In keeping with its frequent high rankings in customer service/loyalty studies, diversified financial services provider USAA earned the highest NPS scores on the Temkin list for two of its businesses: 77 percent in banking and 75 percent in insurance. Credit unions (as a category, not any specific organization) also ranked highly. However, a number of banks, card companies and insurers showed up at the opposite end of the customer loyalty spectrum. According to the Temkin research, HSBC earned the lowest two NPS scores across all companies for its banking and credit card businesses, with NPS scores below zero. Other companies at the bottom of the NPS ratings include Capital One and Citibank (for its banking and credit card businesses), as well as health insurers Anthem and Aetna.

Looking at the range of NPSs across the industries surveyed, which included auto dealers, software companies, retailers, wireless carriers and car rental agencies, what was most striking to me was that the range for banks not only represented the lowest and highest scores, but also was by far the widest of any industry -- from -18 percent to 77 percent. That’s a 95-point range, compared to 54-point ranges between highest and lowest scores for TV service providers and hotel chains, and a 48-point range for insurance.

What factors into the ways consumers evaluate all these different service providers? According to the Temkin Group executive summary of the research:

We also asked consumers what would make them more likely to recommend the companies and found that promoters are more likely to select lower prices and detractors are more likely to select better customer service. While there is some debate about the efficacy of NPS, our analysis shows that promoters are much more likely than detractors to purchase more in the future across all industries.

Given the continuing negative public perception of the banking industry, I guess it’s not all that surprising that financial services firms are heavily represented in this research among companies with a high number of service detractors. To some extent, there probably is going to be negativity toward banks no matter what they do. Still, USAA’s success and high ratings show that it doesn’t have to be this way. Granted, USAA has a relatively homogenous customer base of active and retired military personnel. But it also has a long-standing corporate culture based around good service, customer insight and technology innovation. Clearly, those investments are paying off, in more ways than one.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio