branding banks for shareholder value 6.0 brand measurement
DESCRIPTION
This is the 6th section of Branding banks for shareholder value. This section covers the measurement of bank brands by market research.TRANSCRIPT
Branding Banks for shareholder value Discussion Draft Section 6.0
1
© Geoffrey Johns 25 July 2010
Branding banks for shareholder
value
Section 6.0
Measuring
bank brands July 2010
Branding Banks for shareholder value Discussion Draft Section 6.0
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© Geoffrey Johns 25 July 2010
Delivered and planned series of papers
Discussion Draft
Order.Version
Release Date
Creating shareholder value - an outline 1.0 Mar-10
1
Knowing customers 2.0 Mar-10
2
How customer perceptions develop 3.0 Apr-10
3
Why brand banks? 4.0 Apr-10
4
Why can't banks brand? 5.0 May-10
5
Measuring bank brands 6.0 TBA
6
Measuring relationship value 7.0 TBA
7
Gaps diagnosis 8.0 TBA
8
Bank structure and brand control 9.0 TBA
9
Process level brand control 10.0 TBA
10
Building the brand story 11.0 TBA
11
Communicating bank brands 12.0 TBA
12
Valuing bank brands 13.0 TBA
13
Brands and the future of banking 14.0 TBA
14
Competitive bank branding strategies 15.0 TBA
15
Introduction
My purpose, in this series of papers is to define the path from bank branding and
customer perception to shareholder value. How does investment in brand and
perceptions generate value? The exhibit below illustrates my starting point in making
this connection.
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© Geoffrey Johns 25 July 2010
Customer perceptions
Perception of specification fit to needs
Perceptions of service
experience
Perceptions of brand
Bank efficiency
Mix of businesses
Corporate centre
performance
Business unit performance
Shareholder value
Investment in brand
improves
Weakens
Bank financial
structure
Perception of price
W
Investment in brand strengthens customer perceptions but reduces bank efficiency by
necessarily increasing expenses. Most banks make this trade-off based on experience
and judgement. While I doubt that this type of decision can be reduced to any simple
equation, I do believe that better frameworks‟ for thinking about it are available.
I also argue that successful branding is vital to banks but that it is at the extreme end of
difficulty on the spectrum of all brands. The normal ways of thinking about corporate
brands do not work well for banks. Creating and managing a bank brand is so difficult in
fact that the corporate competence in surmounting the challenges is a source of
sustainable competitive advantage. This advantage can only be achieved by an
understanding of the issues and their implications. There must be a particularly
disciplined set of decisions within a well designed policy framework. In some aspects
this goes to the heart of and challenges conventional management thought.
I am serialising this series of discussion drafts on LinkedIn and slideshare and welcome
any comments. The papers are work in progress towards a book I intend to write one
day. I am recording my own journey over many years trying to come to grips with these
issues. My approach is mainly founded on practical experience but I have been dutiful in
trying to make best use of theory and whatever data I could access. I am happy to be
connected to anyone on LinkedIn who shares my interest in fiancé sector marketing.
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© Geoffrey Johns 25 July 2010
I developed much of my thinking on this subject working with the Finance & Business
Services team of TNS Australiai. I am grateful for their input and support. However any
opinions I express are mine alone. In developing my thoughts I have drawn on the work
of others. Attribution is always recorded. Should anyone reading this be concerned that
their ideas have been misrepresented or used inappropriately I should be happy to
amend or withdraw them.
Measuring perceptions of brand
In this sixth section of branding banks for shareholder value I want to discuss the
measurement of brand perceptions. If we are to make a connection between
perceptions of brand and shareholder value it is necessary to measure both.
In this section, I want to cover:
the relationship between customer satisfaction and customers‟ perceptions of
brand;
measuring customer satisfaction;
perceptions of customer satisfaction as it has been measured in three academic
studies of personal finance markets;
my findings about what customer perceptions seem to make a difference to
satisfaction and brand image in business markets;
the issue of multiple brand audiences;
The way forward, as I see it, in getting a better handle on how bank brands are
perceived.
The relationship between brand
perception and satisfaction
Brand as a store of satisfaction
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Is measuring customer satisfaction is enough to get a fix on the power of the brand?
Does satisfaction = brand?
To return to the definition of brand that I asserted in Section 4, the first part of which
(shown in blue) I accept from John Grant as axiomatic for my purposes:
“A brand is a cluster of strategic cultural ideas” that inculcates and modifies
our expectations of the way the world works. The addition in green is mine.
I have used this diagram to illustrate how I see the role of brand in modifying
experience.
Customer expectations
Customer perception of
the experience
The objective quality of the experience
BRAND
In the context of bankingii, brands modify the perceptions of experience as I illustrate
here. Experience modifies first, immediate expectations, and then the attitudes that
give rise to expectations and finally the deeper held beliefs which are articulated in the
real world through attitudesiii. Our expectations are generated through brand perception
in ways I shall discuss in more depth in a subsequent section.
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Beliefs
Attitudes(Reusable decisions)
Experience (feedback)
Choices
Outcomes
Contextualisationfeedback
Needs
Reframing feedback
Expectations
Realignmentfeedback
Interpretation
Expectations influence both the outcome and our interpretation of the outcome. The
exhibit below amplifies this a little. A customer with a favourable brand impression is
more likely to do two things. The first is to have, at the outset, a higher commitment to
the success of an interaction with the bank. By interaction I mean anything from
telephoning to make a complaint to calling into a branch to make an inquiry about
refinancing a mortgage. Banking products and services are among those that depend on
collaboration between the suppler and the customer for successful outcomes.
For example, a customer with a complaint who has a poor perception of the brand goes
into the interaction with an adversarial rather than solution seeking game plan. During
the interaction they are likely to induce a negative reaction from the bank staff members
and this, of course, can easily spiral. Similarly if the customer goes in expecting a bad
outcome the interaction is more likely to lead to one. The interaction meanders towards
the conclusion predicted in the customer‟s mind. Finally, brand influences the
interpretation of the outcome.
‘They fixed my problem just like they always do.’
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Favourable Perception of brand
Favourable expectations of the interaction
Favourable outcome
Good bank performance
Customer commitment to the interaction
Effective bank processes and
resources
Favourable interpretation of
the outcome
And there is one further feedback loop to add. Once observed, the commitment of bank
resources is reinforced, confirming the loop. The difficulty for the bank lies in the
observation of the process which is more difficult to measure than you might think.
Many banks give up on a course of action just before benefits become apparent because
their antennae are insufficiently well attuned.
Favourable Perception of brand
Favourable expectations of the interaction
Favourable outcome
Good bank performance
Customer commitment to the interaction
Effective bank processes and
resources
Favourable interpretation of
the outcome
reinvestment
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© Geoffrey Johns 25 July 2010
As I discussed in Section 4, there is a self reinforcing loop in the development of
customer perceptions as experience of the event interacts with accumulated brand
experience. Where brand experience and event experience conflict there is a clear
management issue at hand. But where they reinforce each other, either up or down,
there is momentum. It is true that banking momentum can appear almost glacial in its
pace. Deciding of the right things to do and consistently doing them over a long period
is a big part of the answer.
Tourist: How do you get these lawns looking so beautiful?
Gardener: We just keep watering them, mowing them, rolling them.
Tourist: That doesn’t sound difficult, how long does it take?
Gardener: About 400 years.
And while I have my old joke book out, I shall also fail to resist:
Man in sports car to wayside yokel: What’s the fastest road to London?
Yokel: Well, if I were you I wouldn’t be starting from here.
Bank brands tend not to be starting from the right place. A few decades ago might have
been better.
I used the diagram below in Section 4 – „Why brand banks?‟ to illustrate the momentum
imparted when brand experience and event experience reinforce each other.
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Why then doesn’t a successful bank just maintain this momentum ever onwards and upwards,
while the unsuccessful ones go down? I suspect this is largely due the cyclical and structural
factors I outlined in Section 5 and the interactions between them. The playing surface never
stays smooth and level for long enough. But also it is caused by flagging in management
resolve. Too often things happen too slowly or in ways undiscerned and management
support for a strategy is withdrawn. These things are hard to observe and measure. To do
so is an important management discipline.
To sum up, when we measure satisfaction, we are measuring the impression left by a series of
experiences modified by brand and changing brand perceptions. Favourable brand perception
has dimensions that satisfaction alone does not.
What does a favourable brand perception do that
satisfaction alone does not?
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Is favourable perception of the brand the same as customer satisfaction? I think not.
Perceptions of brand allow you enter the realms where experience has less power. This
happens in two ways:
First satisfaction with what is experienced can be transferred to things not yet
experienced; and
Secondly satisfaction can be transferred from the concrete particular to the
abstract universal.
I shall elaborate below. In the meantime, I don‟t want to imply here that there is a
simple path from repeated event satisfaction to favourable brand perceptions. This
repeated event satisfaction creates the opportunity for branding not the branding itself.
There needs to be a vehicle of mental pathways and associations to do that. As John
Grant says there has to be „a cluster of strategic cultural ideas’ acting as a conveyer. I
shall pursue this line of thought in Section 11 – „Building the brand story’.
Close to hand and heart
By „close to hand and heart‟ I mean those products and services that the customer needs
and uses now. Typically, bank customers are rarely satisfied in a way that transcends
the here and now. Too much is simply expected to go right. If an interaction with the
bank goes well today that‟s enough. Brands, I believe can extend that a little, however,
when they are well managed.
I want here to use a familiar marketing matrix in a different way to how it is usually
deployed. The customer‟s satisfaction with the „here and now‟ can be extended to
products, services and distribution channels:
offered under the brand that exist but that they don‟t yet use;
that they use now as they respond to their future needs; and
that the bank may introduce in the future.
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This last point is important to, for example, the future development of online banking.
Imagine being offered a new online banking service by a bank that consistently makes
mistakes in your paper statements.
Pre
se
nt
Existing
Fu
ture
New
Perception of events as
modified by perceptions of
brand
Perceptions of brand
Perceptions of brand
Perceptions of brand
Products, services, markets, distribution channels
Tim
e p
ers
pective
Brand here fills in parts of the matrix that satisfaction alone does not fully reach into.
The reason is that bank satisfaction tends to be passive and reactive. It does not extend
unless in some way articulated. A good brand requires customer satisfaction as a base
but it requires other things as well.
More distant but more lasting
Another set of dimensions are those shown in the exhibit which follows. They appear
less immediate but because they require a greater stretch on imagination, beyond the
self and the self‟s immediate needs can create a deeper impression. Perceptions once
extended into new territory are I believe likely to be sustained. The breakthrough into
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new territories of thought is hard to retreat from. It tends to stick in people‟s minds
because it is newly created territory in their mental map.
Pra
gm
atic
Me
Ide
al
Others
Perception of events as
modified by perceptions of
brand
Perceptions of brand
Perceptions of brand
Perceptions of brand
FocusO
utlook
I see this branding effect as having two dimensions:
First, it extends satisfaction beyond „me‟ to „us‟. „If I’m satisfied with this service so will
others be’. This inevitably carries with in people‟s mind the connotation of „us‟ as „me
and my tribe‟ or „me and the tribe I want to be in‟. The effect can be powerful. It
extends to ‘I am one of the group of people experiencing satisfaction with this brand’.
Secondly, it can go from the pragmatic to the ideal. That is to say, from the strictly
utilitarian to something socio culturally valuable independently of the user. It becomes
the right way to do things.
All the things above that I have tried to designate as „brand‟ rather than satisfaction
have one further capability. Satisfaction can be better than that of a rival bank. But it
cannot be a different kind of thing. Competition takes place along a single continuum in
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© Geoffrey Johns 25 July 2010
this regard. Brand opens competition to many dimensions creating, as it does so, more
opportunities for differentiation.
The foundation for brand is personal experiences but brands build bridges from personal
experiences to broader perspectives, aspirations and concerns.
Having said this, for customers, the foundation of favourable brand perception is indeed
satisfaction. It is to the measurement of satisfaction that I shall turn next. We also
need to consider the development of brand perception in the minds of non-customers
with no experience of the product or service. I shall return to this later in this section.
For now I want to conclude that favourable brands stretch customer satisfaction into
dimensions other than the individual customer‟s here and now. More than this a good
brand shifts the customer‟s mental focus from the concrete particular to the abstract
universal. For this to happen the customer must believe that the benefit that they
derive from the interaction with their bank results from some core value or institutional
capability that resides deep within the bank and is nurtured there.
Measuring satisfaction
A (very) short history of customer satisfaction
measures in banking
Of course it has always been a good idea to keep customers happy. The „customer is
always right‟ has been with us for a while. I suspect, however, that systematic research
into bank customer satisfaction is relatively recent. Around 1990 I asked to see all the
customer research for Westpac‟s commercial banking unit and was directly to a rickety
but large wooden cupboard. Out fell a few dozen or so large, dusty, ring bound books of
research. They were all issue specific (this or that product or campaign) rather than
systematic tracking. Clearly each had be read once or twice, nodded wisely over and
chucked into the cupboard. It took a couple of decades to get to where we are now in
measuring satisfaction.
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There were two things that gave impetus to measuring satisfaction. One that appealed
to the thinkers in banks was ultimately caused by Edwards Deming‟s quality
management concept. Banks came late to quality management (many came not at all).
It did make sense, though, that measuring the quality of process depended on some
guide to the quality of output that customers required. Now this isn‟t easy in banking.
Compare it to, say, manufacturing a part to go into a larger assembly. If the
specification of the ball bearing is 14.25 millimetres diameter that‟s the target, no
question. Obviously, banking is harder to get that level of „hard and fast‟. Thereby
hangs a thought that I shall pursue later in another section. For now though the need to
measure satisfaction in some way or another became more important.
By contrast, the road to measuring satisfaction for the „doers‟ among bank executives
came with a realisation, which seemed to dawn on the whole world all at once during the
Nineties. We discovered that retaining customers costs a lot less than winning new
ones. By year 2000 at least two bank CEOs in Australia had satisfaction measures as
part of the KPIs agreed with them by their Boards (and probably all of them).
But then, after a few years, people began to question whether satisfaction was enough.
Criticism came mainly from two sources. First satisfaction alone did not appear to be a
good predictor of customer behaviour. Secondly, for some people, measurement of
satisfaction seemed to make life too easy for the people being measured. The bar had
not been set high enough.
To take the first point, satisfaction seemed not a good guide to customer defection or to
their value to the bank. Indeed some very satisfied customers were underpriced for risk,
so no wonder. Other dissatisfied customers were so because their bank, quite correctly,
was trying to manage credit default. But even so it was found that some satisfied
customers that a bank wanted to keep were defecting.
Some studies purported to show that satisfaction only predicts behaviour when
satisfaction scores are very high. I think the reason for this is less that there is a sudden
kink in the satisfaction / behaviour curve. I think it because a hidden dimension comes
into play. We see this at work in the Conversion Model, which I discuss later.
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The second point goes to the heart of bank management and I shall more to say about it
later in this series of papers. For now though consider the exhibit below. It shows the
result of a survey of about 23,000 relationship managed business customers. There was
a response rate of roughly half. The waves were carried out in the years 1995 to 1997,
inclusive. It was approximately two years after a major restructure and the relationship
managers and their support teams were getting good scores for customer satisfaction.
About 70% of customers were being giving scores of 8 or better. But in the minds of
some people at their head office that wasn‟t supposed to happen. It looked all too easy.
But then how do you raise the bar to 8 out 10, especially when many respondents don‟t
give 10s on principle. ‘It leaves no room for improvement’, they say.
It was generally decided; (by those not being measured) that something more
demanding was needediv.
As well as these things, banks, in my experience, are not good at linking satisfaction
measures to process management or design. Measuring satisfaction is seen as just a
way of keeping score rather taking decisions. As far as I can see, this is not a
widespread concern among others. It is, however, a central theme of this book.
Overall Rating of Relationship Manager
Service and Support
Wave 3
Avg Response 8.05
1
2
3
4
5
6
7
8
9
10
NA
0 5 10 15 20 25 30
Percentage of respondentsSource - CTS
Wave 1
Avg Response 7.23
1
2
3
4
5
6
7
8
9
10
NA
0 5 10 15 20 25
Percentage of respondents
Wave 2
Avg Response 7.98
1
2
3
4
5
6
7
8
9
10
NA
0 5 10 15 20 25 30
Percentage of respondents
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© Geoffrey Johns 25 July 2010
Satisfaction and the TNS Australia Business Finance
Monitor
The TNS Australia Business Finance Monitorv is a sophisticated survey of the banking
behaviour and perceptions of businesses with turnovers of up to AUD 100,000vi. For
general references to TNS and the Kantar Group, of which it is now a part, see the
endnote. I reiterate that while I am grateful for having worked with TNS Australia for
nearly a decade any views I express are mine alone and do not necessarily reflect TNS
thinking. In making reference to the BFM I use no indicators for any individual client and
only show data that is already in the public domain.
In its design the BFM survey had to do two things of special relevance to this series of
papers. One was to incorporate some measures that were a given because they were
used by one or more of the subscribing banks as part of their internal processes. For
example satisfaction measures are included in some in the Key performance indicators of
the CEOs of some banks. This means that it is vitally important to the client that the
underlying question does not change so the time series is maintained.
Secondly, the questionnaire design involved input from a group of highly experienced
and competent market research expertsvii. Naturally there was not total agreement
either on what elements to include and how to word the questionnaire. The end result
was a compromise but not, in my view, a bad one. As I progress through this section I
shall comment where my views were or have come to be at variance with the
questionnaire as it is presented here. Hindsight is of course easier than foresight and I
learned a lot during the course of my involvement.
As a result of the situation I have described, the BFM include questions from more than
one approach to measuring satisfaction:
Two different versions of a straight satisfaction question with, as far as I know,
no particular source.
The satisfaction question as it is incorporated into Jan Hofmeyr‟s Conversion
Model™;
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A version of the Net Promoter Score (NPS) question, developed by Fred
Reichheld; and
A version of the Customer Value Added question, developed by Ray Kordulpleski.
In the exhibit below I set out the text of the questions side by side. I‟m going to refer to
such questions as focal questions because they act as a bridge between understanding a
lot of detail about the customer‟s perceptions and situation and making predictions about
the customer‟s behaviour. Put simply for now.
Beliefs
Attitudes( Reusable decisions)
Experience ( feedback)
Choices
Outcomes
Contextualisationfeedback
Needs
Reframing feedback
Expectations
Realignmentfeedback
Interpretation
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Overall, on a scale from 1 to 10, where 10 means 'perfect in
every way' and 1 means 'completely
unsatisfactory', how would you rate your
experience with [name of provider] for
business banking?
Taking everything into consideration - the products, the
service you receive and the fees and charges that you have to pay - how
would you rate [main bank] overall for the value they offer your business? Would you
say they give you excellent value for
money…?
Using a scale of 1 to 10 where 1 is
'definitely would not recommend' and 10 is 'definitely would recommend', how
likely would you be to recommend [main
bank] to your business associates for their business banking needs?
Overall, how satisfied or
dissatisfied are you with your
relationship with [main bank] on a scale of 1 to 5, where 5 is as
satisfied as you could be, and 1 is as dissatisfied as you
could be. Are you…?
And thinking about all of your business
accounts, loans, investments and
service dealings with [main bank], how
would you rate their overall
performance? Is it excellent…?
Conversion Model satisfaction question
Standard satisfaction question
NPS / Advocacy question
CVA satisfaction question
Standard satisfaction question (2)
BFM Q 8-5 BFM Q 10-2 BFM Q11-6 BFM Q11-2 BFM Q11-3
Note that the Conversion Model™ satisfaction question only operates in conjunction with
the other question that combine with is to assess customer commitment. These
questions are.
Conversion Model perception of
alternatives question
BFM Q 10-1
I'd now like to ask you how you feel about different
institutions with regard to business banking. Please
indicate your feelings about each institution by giving a score between 1 and 7. If you have a very negative
attitude towards a particular institution then you should give it a score of 1. On the other hand, if you have an
exceptionally positive attitude towards it, you
should give it a score of 7.
Conversion Model importance of choice / involvement question
question
Q10-3
Thinking about the selection of a bank or other financial
institution for your business, on a scale of 1 to 5 where 5 is not important at all and 1 is extremely important, how
important to you is the decision about which provider
to go to? Is it?
[Extremely important1;Very important2;Moderately
important3;Slightly important4;Not important at
all5
Conversion Model perception of
alternatives question
Q10-4
I‟m now going to read three statements about business
banking institutions. Thinking about your business banking with each bank , please tell me which statement best
describes how you feel about this institution.
1 There are many good reasons to continue dealing with [BANK] and no good
reasons to change.2There are many good
reasons to continue dealing with [BANK] but there are also many good reasons to
change.3There are few good reasons
to continue dealing with [BANK] and many good
reasons to change.
Overall, on a scale from 1 to 10, where 10 means 'perfect in every way' and 1 means 'completely unsatisfactory', how would you rate your experience with [name of
provider] for business banking?
Conversion Model satisfaction question
BFM Q 10-2
I might be uniquely positioned to talk about these several ways of getting to the
measurement of customer commitment. Surprising there seemed relatively little client
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© Geoffrey Johns 25 July 2010
interest in making comparisons between the focal question approaches so my data is not
as rich as it might be.
The Net Promoter Score™ (NPS)
Undoubtedly, NPS has taken the market research world by storm. „It
would be difficult to overstate the impact of Net Promoter on
management‟viii The BFM Advisory council of client representatives asked
for it to be included in the questionnaire from July 2007 as a replacement
for the advocacy question it had included, hithertoix.
Net Promoter is a customer loyalty metric developed by Fred Reichheld and
Bain & Company, It was introduced by Reichheld in his 2003 Harvard
Business Review article "The One Number You Need to Grow". It is controversial in its
claim to be ‘the one number you need to grow’. Studies such as that of Timothy L.
Keiningham et al (op cit) cast doubt over claims that NPS is a superior measure. For reasons
I’ll deal with below it probably isn’t all that inferior either. For my immediate purposes,
however, it is a measure that looks beyond the respondent’s satisfaction to look a little more
broadly at how the customer sees the brand. It asks customers to interpret their experience of
the brand in the context of their relationship with other people. I think it the question is most
useful as a guide to word of mouth but it is serviceable as a satisfaction focal question
providing you don’t get carried away by its claims to unassailable superiority.
The question itself presents a problem that seems not to have been picked up by the
various critics of NPS that I have read. Two things are, conflated: the first is the
customer‟s satisfaction with the product or service. This is saying, „I, the customer, am
so satisfied that I would take the (unusual) extra step of recommending this to others‟.
In a sense that can be expressed as „I will associate my brand with your brand‟.
The second thing is the customer‟s intention to talk about the product or service at all.
This raises questions such as does the product or service appeal especially to people who
like talking about products. Does this matter in real life? I think it can do. Are, for
example Apple computers the product of choice of the „chattering classes? I think they
Using a scale of 1 to 10 where 1 is
'definitely would not recommend' and 10 is 'definitely would recommend', how
likely would you be to recommend [main
bank] to your business associates for their business banking needs?
NPS / Advocacy question
BFM Q11-6
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© Geoffrey Johns 25 July 2010
are and that this has a positive impact on the Apple brand. My main point here is that
any attempt to modify the focus question in a satisfaction survey will raise complicating
issues of interpretation. This matters more when the focal question is used for deep
analysis as opposed to merely keeping score.
We have seen that the BFM asks the NPS question as well as other satisfaction related
questions. I don‟t see why this shouldn‟t be done. In point of fact, I‟d ask the word of
mouth question, ideally, a little differently. But given its apparent popularity with senior
executives I see no real harm in adopting the Reichheld wording. I should prefer to ask
other questions though concerning the frequency with which and circumstances in which
people seek and offer opinions about banksx.
A bigger question in my mind is how is that this form of satisfaction question became so
popular so quickly, a point to which I shall returnxi as I believe the underlying causes are
central to my argument.
The exhibit below compares, the NPS with commitment s measured by the Conversion
Model. The data is for Australian business banks and customers up to AUD 5 million
turnover. NPS is measured as the aggregate of scores 9 and 10 on a ten point scale
minus the aggregate of scores 1 – 6. The conversion model rating is measured by the
percentage of committed customers to all customers. I am not revealing the names of
specific banks in these papers. But it does seem useful to distinguish here between
small (S) and big (B) banks.
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© Geoffrey Johns 25 July 2010
You‟ll have to take my word for it that I can explain the outlying among the smaller
banks. The difference shown between the big and smaller banks is interesting, however.
Big banks seem to score less well on the NPS than measured by commitment. I think
there are a couple of reasons:
First, the smaller banks tend to have come from a background of personal
banking (mainly home loans) and are growing into their business banking
footprints attracting initially firms that are especially attracted to their business
models. I suspect that these firms tend to have a something of an evangelical
relationship with their banks;
Secondly, the smaller banks tend to have a larger proportion of customers
outside the main cities of Sydney and Melbourne in smaller towns and rural areas
where there is greater community spirit and supportiveness;
Thirdly, the smaller banks tend to have stayed closer to businesses managed-at-
the-branch model which means that there is a greater sense of community in
dealing with the bank.
B
B
B
B
SS
S
S
S
S
S
S
R² = 0.7141
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
40% 50% 60% 70% 80% 90% 100%
Net P
rom
ote
r S
co
re
Commitment
Comparison of Commitment and Net Promoter Score
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© Geoffrey Johns 25 July 2010
To the extent that these things are true, the NPS does pick up on intention to promote
as opposed to being merely an expression of extreme customer alignment with the bank.
This may support my view that the NPS is more useful as a measure of word of mouth
than it is of satisfaction per se.
Customer Value Analysis™ (CVA)
Ray Kordupleski, author of Mastering Customer Value Management: The Art and Science
of Creating Competitive Advantage introduced CVA and, among clients I know, it
achieved nearly the same popularity as NPS. One bank I have dealt with, Suncorp is one
of the main examples given in Kordulpleski‟s book. CVA is based on the idea that
satisfaction should be related closely to perceptions of value for money.
With candour (almost defying belief), Kordulpleaski states in the introduction to his book
that he chose the name CVA because it resonated with the Stern,
Stewart term Economic Value Added (EVA), which lent it credence as a
business. Actually, customer value measurement is vital and I shall turn
to it in the next section in this series of papers. CVA has nothing to do
with this and is simply another way of adjusting the basic satisfaction
question to get a supposedly better result. The basic thought is
customers can be satisfied with a product or service but don‟t think its
value for money. This assumes that when asked about satisfaction they
won‟t, in their assessment, take account of what it costs them. It also
directs attention towards cost away from the other three elements
recognised by Croxford et al, in the work I cite in Section 1 of this series of papers and
adapt in the exhibit below.
Taking everything into consideration - the products, the
service you receive and the fees and charges that you have to pay - how
would you rate [main bank] overall for the value they offer your business? Would you
say they give you excellent value for
money…?
CVA satisfaction question
BFM Q11-2
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Perception of price
Customer perceptions
+
Perception of specification fit to needs
Perceptions of service
experience
Perceptions of brand
+
+
+
It is quite difficult to get survey respondents to think about all four elements at once. As
with all surveys the part of the totality that their mind snaps to in the instant they have
to respond will depend on factors including:
the sort of person they are (refer back to Section 2, where I introduce
segmentation by attitudes to finances);
their situation at the time they respond (for example people‟s first reactions can
change depending on whether they are at home or a work);
their most recent salient experience with the product / service;
the positioning of the question in the survey questionnaire.
As far as possible I prefer the question to be as simple as possible to avoid any leading
of the respondent.
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The exhibit above shows a rather similar position to what we saw for the comparison
between the Conversion Model and the NPS but for different reasons I believe. I believe
it is indeed more likely that the customers of larger banks are more fully priced. Larger
banks tend to be more attuned to shareholder expectations of return. Moreover, they
can rely less on a growth premium in their share price than can smaller banks. In
addition to this their greater share of customers in urban centres may indicate a greater
focus by these customers on the cost of banking.
How the Conversion Model works
I have already introduced the Conversion Model in Section 3 of this series of papers. It
is a psychological measure developed by Jan Hofmeyr that segments customers into
eight groups as illustrated below.
B
B
BB
SS
S
S
S
S
S
S
20%
30%
40%
50%
60%
70%
80%
40% 50% 60% 70% 80% 90% 100%
CV
A s
core
Commitment
Correlation of Commitment with CVA
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Entrenched
committed
Average
committedShallow Convertible Available Ambivalent
Weakly
unavailable
Strongly
unavailable
Committed Uncommitted Open Unavailable
Customers Non- customers
Total market
I have only worked with a slightly older version of the Conversion Model than the one
currently used. This is the one I discuss here. I understand that the version to which
TNS has proprietary rights has been simplified somewhat in application without any loss
of information content. I also understand that Jan Hofmeyr has developed a similar
model to which Synovate, a market research company, has a proprietary right. I have
no knowledge of this model.
The central satisfaction measure in the BFM is commitment derived from the Conversion
Model. In the version with which i am familiar it derives from four elements:
Satisfaction / needs fit;
Importance of the purchase decision to the customer;
Perception of alternatives;
Ambivalence.
It is a key feature of the Conversion Model that all studies which use it enter data into a
central database from which norms are generated that place the results within the
context of the country and industry. There are approximately 7,000 such studies at
present.
Satisfaction / needs fit
The Conversion Model does not abolish satisfaction. In fact satisfaction is the „active
ingredient in commitment. The other factors in commitment are primarily influenced by
satisfaction but also to some extent by intrinsic factors. I shall explain this below. The
exhibit here emphasises the dynamic nature of the development of commitment of which
the Conversion Model takes a snapshot in time.
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Adverse experiences
Leads to
Leads to
dissatisfaction
More negative ambivalence
Increased importance of choice of bank
Enhanced perception of alternatives
Loss of business
Need for new product / service
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Importance
The Conversion Model view of the world is that customers cannot be committed to a
product or service that is unimportant to them. Choosing a bank is more important than
choosing the office cleaners. To which a sceptic might respond – but for any category
the importance of the buying decision is of much the importance across all users.
However, this is not the case. In my research, among Australian SMEs with turnover up
to AUD 5 million, two thirds of them rated importance in the top two categories in a 5
point scale and one third in the bottom 3 categories. This confirms what many bankers
believe about the market. There are two fairly distinct groups. In the words of Alan
Pricexii „the customer you win on price today you’ll lose on price tomorrow’. In
Conversion Model terms the transition paths of ‘low importance’ customers are indicated
by the red arrows and those of „high importance’ customer by the blue arrows.
Overall, on a scale from 1 to 10, where 10
means 'perfect in every way' and 1 means
'completely unsatisfactory', how would you rate your
experience with [name of provider] for business
banking?
Conversion Model satisfaction question
BFM Q 10-2
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Entrenched
committed
Average
committedShallow Convertible Available Ambivalent
Weakly
unavailable
Strongly
unavailable
Committed Uncommitted Open Unavailable
Customers Non- customers
When we talk of satisfied customers who still defect, it seems likely to me that some of
them do so simply because a relationship with any bank is simply not that important to
them. They can be tempted on price or relaxed lending conditions.
Adverse experiences
Leads to
Leads to
dissatisfaction
More negative ambivalence
Increased importance of choice of bank
Search for alternatives
Loss of business
Need for new product / service
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Deterioration of economic conditions
Leads to
Changes in intrinsic customer
management beliefs
Can lead to
Perception of alternatives
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The Conversion Model also takes into account customer‟s perception of alternatives. A
satisfied customer may defect simply because they might be even more satisfied with a
rival bank. This process is illustrated below.
Adverse experiences
Leads to
Leads to
dissatisfaction
More negative ambivalence
Increased importance of choice of bank
Enhanced perception of alternatives
Loss of business
Need for new product / service
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Ambivalence
The Conversion Model‟s variable it describes as „ambivalence‟ is very like an intention to
switch question common in many surveys. In a sense a poor rating on this measure is a
culmination of a series of events adverse to the bank. Dissatisfaction leads to an
intensified search for alternatives weakening the position of the incumbent bank as
shown in the exhibit below.
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Adverse experiences
Leads to
Leads to
dissatisfaction
More negative ambivalence
Increased importance of choice of bank
Enhanced perception of alternatives
Loss of business
Need for new product / service
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Leads to
Dissecting the Conversion Model
None of the questions that constitute the Conversion Model are unusual. Each for them
could easily appear in any survey questionnaire. For example, the ambivalence question
is just a version of an „intention to switch‟ question. What is special about the
Conversion Model is the way in which it brings the four elements together into
commitment, based on statistically derived norms.
The following exhibits are taken from a study I did of the Australian farm sector some
years ago. From the exhibit below you can see that among farmers, frequently reported
in the Australian media as hating their banks, few fall into the South West quadrant of
the matrix. That is the quadrant where respondents don‟t like their bank but there is
inertia because they think that all banks are the same. The majority are in the quadrant
where they quite like their bank but are also open to at least one other bank.
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1 2 3 4 5 6 7 8 9 10
7
6
5
4
3
2
1
Satisfaction / Needs fit
Attitu
de
to
ward
s a
ltern
ativ
es
5% 62%
1% 3%
29%
Looking more closely, I next introduce the ambivalence question. Of the 5% of the
market less satisfied with their bank there are still relatively few (37%) who say they
believe there are few good reasons to stay and many to change. This is where we see
the inertia in the market. It is not caused by the „all banks are bastards‟ mindset.
1 2 3 4 5 6 7 8 9 10
7
6
5
4
3
2
1
Satisfaction / Needs fit
Attitu
de
tow
ard
s a
lte
rna
tives
20%
43%
37%
74%
23%
3%
77%
19%
4%
0%
43%
57%
5 62
1 3
I offer this glimpse to make the point that the dynamics of the commitment over time
should be understood to see how the situation is unfurling. As a group, these farmers
have reached the point where they are open to alternatives but see no compelling
reason to change at this point.
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Conversion model weaknesses
The primary problem clients seem to have with the Conversion Model is its black box
effect. Four questions are askedxiii and these are brought together in a proprietary
algorithm into a classification in to one of eight commitment segments. This has the
beneficial effect of maintain some central control over the use of the Conversion Model
that I don‟t think applies to the same extent to NPS and CVA where researchers can just
incorporate the question into a survey. They do not necessarily have a comparative
database to work with.
This is obviously an advantage for the Conversion model in normalising outputs by
industry and country. But it does have a serious downside. A great issue that client side
market researchers have is this. Consider when they are being questioned by segment
managers as to why, say, the commitment measure (on which their performances might
be measured) has fallen. How well does it go down, do you think, when they have to
say they don‟t know what happens when the responses to the four questions goes into
the black box?
Now this doesn‟t much worry me. I don‟t see why, for performance measurement,
banks don‟t just use the satisfaction / needs fit part of the Conversion model measure.
Nothing is lost from what they would have anyway. The reply then seems to be, “ah but
people might measure me by commitment anyway. It is part of a wider problem in
using research data. It is one I shall return to after a brief discussion of some related
issues.
General issues with measuring satisfaction
Statistical validity
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Users of satisfaction scores no matter how they are derived seem to spend a lot of time
considering the „statistical validity‟ of the results. Well I can sort this out for everyone
straight away. There is none: well, none worth speaking of – not in a scientific sense..
The first rule of sampling is that every member of the population has an equal chance of
being selected. With customers, this never happens, ever. It doesn‟t even happen with
a staff survey over which you have more control.
I‟ve never seen good evidence about who responds to surveys but, like pretty much
everyone else, my experience suggests to me that it is people towards the high end of
satisfaction and the dissatisfied. Mind you, I haven‟t really seen the twin peaked
distributions that you‟d expect if this were true.
With panels you get people who want to be on panels. With incentives you get people
for whom the incentive means something. But whatever you get is not going to be
statistically valid.
Let me offer two anecdotes and you can make a judgement about how rare you think
these instances might be.
An elderly woman I know took pity on a cold wet door-to-door research woman one
Yorkshire Sunday. She answered some door step questions and accepted £5 to fill out a
„phone directory sized questionnaire. But as she was frail and tired my partner and I
took on the task of completing the questionnaire on her behalf. Much of it didn‟t apply,
for example cosmetics, overseas travel and theatre going. It still took us, taking turns,
on and off the best part of a week. We did do our best though to reflect what we
thought he lady‟s thoughts would be.
I once had dinner with a half a dozen Barossa Valley winemakers and their accountant –
himself a winemaker. They were all customers of my bank. When I asked about the
client survey I had used recently, the accountant told me that all the others gave him
the questionnaire to complete for them. He told me he did try to reflect the individual
experiences of each of them.
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Well, did you expect every bit of market research to come to you in dust free laboratory
condition?
Sample sizes
Sample sizes are rarely what we should like them to be. In my experience we
sometimes say that around thirtyish is enough. It is, sometimes. But that is in limited
circumstances where the dimensions we are sampling for are few (well one actually). So
in predicting the proportion of red billiard balls in a bag of red and white ones it might be
ok. But in ascertaining the loan balances of a sample of customers it is less so. I expect
it‟s always hard to satisfy statistical standards. In my practical experience it‟s best to be
nervous with any sample shy of 100 or so.
Incomplete population data
What actually is the population that is being sampled? This is not as straightforward as
it sounds. Take the segment, often used in Australia of SMEs with turnover less than
AUD 5 million. From memory there are an very large uncounted number not captured
by government Goods and Services Tax returns alone. These returns are the main basis
for keeping count od Australian businesses.
What is being measured, actually?
In my experience this is often a poorly understood issue, even among market research
specialists. In banking what to you want to measure? Is it something about the
customers themselves or something about their value to shareholders? For example,
supposing you discover that the proportion of customers with turnover < AUD 5 million
committed to their bank is 50% by number. It could easily be the proportion of their
(say) loans from the bank held by committed customers is 70% a big difference. So
what do you want to measure? In most cases i would want to know the characteristics
of my balance sheet rather than of my customers. But most bank research doesn‟t tell
you that.
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Measurement scales
A variety of scales are used. Sometimes people get very hung up on this. I tend to use
1 -10 because respondents are most used to it and it presents as little barrier as possible
between them and the script. But even discrete data can be deceptive. The gap
between 1 and two rating, for example is 100%. The gap between 9 and 10 is 10%.
Valid responses
Having met the cost of getting through to a valid respondent, naturally you want to ask
as much as you can. My best information is that there is deterioration in response and
an increase in the dropout rate if an interview goes much longer than 20 minutes.
Telephone seems to work best as far as I can see but is expensive and increasingly will
run counter to privacy regulation. Panels will become important but while a panel can
tell you a lot about the voice of the market it is less useful for the voice of the customer.
It is hard to find a panel that can be made representative of a defined customer base.
The auto pilot response to ratings
My experience of people answering any form of satisfaction question on the telephone is
that they immediately get what the questioner is on about and translate that in their
minds directly to he / she wants to know how much I like it. This actually mostly gives
you the right answer but doesn‟t add much for the case for subtly worded questions.
Respondents screen out the subtlety because they get what you mean almost before you
say it.
Also, people have some tendency to get into a rut when answering a series of questions.
‘How responsive are they?.... 6
How consistent are they? ....6
How well do they support the community?...6
What’s your favourite colour?...6’
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Questionnaire design issues
There is never a perfect design but be aware of this. Introducing a satisfaction question
in the wake of a series of questions about face to face service will almost certainly
condition the respondent to answering about their satisfaction with face to face service.
If you wanted to know about their satisfaction with the bank as a whole, including,
products and other distribution channels, you are not likely to get it.
So what is the big problem I was talking about earlier?
All these little problems come together as one very big problem when mixed with one
important fact of banking. Some people have a vested interest in looking hard for and
imperfections in the data. As we have seen these are inevitable so a hard look need not
take that long. These people are really anyone in a management position who is being
measured by satisfaction scores and for whom the numbers come up wrong. I am
reasonably certain that I know of specific cases where senior management have adopted
market research policies designed to disguise their failure.
This is a really big problem with using satisfaction research for measuring performance
as opposed for to taking marketing decisions. And some clients, perhaps most clients
see performance measurement as the main or sole purpose of satisfaction surveys. In
these circumstances there will also be a tendency for clients to try to discredit the
research. Market research is always a bit like holding an X-ray up to the light and
wondering if the patient really did swallow a hammer. If it suits a senior manager to
render the research process toothless is usually possible to do so. But it isn‟t something
that can be turned on and off. There are banks that are opportunistic and banks aren‟t.
I‟m going to hold off for a bit before I decide on the right work for them. But in the
meantime I will say that a bank can‟t have it both ways. Or at least they can only fool
some of the people some of the time. Handling market research well is a demanding
organisational skill. It takes a certain kind of maturity. This must be based on a realistic
understanding of what research can achieve coupled with profound understanding of the
industry context.
The relationship between quantitative and qualitative research
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Qualitative research never measures anything. This shouldn‟t need saying but I‟ve
heard clients drawing conclusions about what the market thinks from a couple of focus
groups too often to know that it does.
Quantitative research
Qualitative research
DesignInterpret
„We’ll run it past a couple of focus groups’ is one of those marketing phases that give a
pretty good clue that not a lot of thinking is going on.
Qualitative research can be very useful indentifying things like:
The way customers related to the product or service;
The language and terminology they use to talk about it;
How they use it;
What they see as benefits;
How they compare providers;
How central it is to their lives.
But it tells you next to nothing about how much the respondent‟s views are shared by
others. These things though do help in formulating quantitative surveys and interpreting
results. But is only the quantitative survey that is in any way helpful to the
measurement of brand.
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Why the obsession with asking just one question?
Would CEOs be happy if the CFO said he or she could tell them all they needed to know
about the business with just one line of the profit and loss statement?
Too much emphasis gets put on the focal satisfaction question. It is never the only
question you need to ask. It is next to useless if you can‟t go backwards from it to
comprehend the underlying reasons. Also you need to be able to identify the
characteristics of respondents in terms of their underlying characteristics and their
banking behaviour. Without this, measuring satisfaction no matter what question you
prefer is unattainable. It is just keeping score.
The exhibit below outlines the overall research framework that needs to be established.
I have heard managers saying that their approach, say, CVA is best and then go on to
describe the framework of questions and analyses that interprets the CVA question in
terms of the framework below and predictions of its outcome. They believe that all of
this is integral to CVA. It is important to realise that these are common to all focal
satisfaction questions. The overall framework is the same whatever the focal question.
The framework can vary a lot depending on the industry and sometimes the individual
organisation. These difference must not be attributed, however to the satisfaction
question being used be it CVA, NPS, Conversion Model or anything else.
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Facts about the respondent‟s banking
behaviour
Facts about the respondent
Facts about the respondent‟s
perceptions of specific banks
Predictions about the respondent‟s behaviour
Projected stimuli
Affluence
Age
Attitude to finances
Products held, which bank(s)?
Distribution channels used, frequency
Satisfaction with bank A
Perception of brand A
Alternatives
Customer defined perception criteria
Action threshhold
Customer defined switching, seeping
criteria
Some concluding thoughts on measuring satisfaction
I have tried to outline the satisfaction measurement approaches with which i am
familiar. There are surely others of which I am unaware. Those i have described,
however, are all used extensively in banking and other industries. I hope they are at
least representativexiv.
Here is my verdict. I would prefer, given a blank sheet, to use the Conversion Model
rather than any other approach I know of. I like it because while it contains a simple
unadorned and uncontaminated satisfaction it has, in the concept of commitment, more
predictive power.
It is a segmentation tool that is calibrated to a large number of studies even though the
mechanism by which this is achieved is opaque.
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However, I do understand that it hard for bank to move away from an existing approach.
The break has to be for a significant and demonstrable improvement. Otherwise the
disruption to management thinking and the loss of historic data is hard to justify. For
these reasons, approaches such as CVA and NPS are not far inferior (though they are
not, in my view in any sense, superior) to the Conversion Model PROVIDING:
All respondent ratings of other institutions that they deal with or know of are maintained
AT THE RSPONDENT RECORD LEVEL. That is to say that an approach that gives, say, a
CVA score of 40% to one bank and 55% to another based on their customers is inferior if
we do not know how each is rated by each respondent. This is possible with the
Conversion Model but not intrinsically, unless specified, with any other methodology.
Three academic studies in personal
finance
I want to turn to exploring some of the drivers of customer satisfaction in personal
banking. Fiordelisi and Molyneux (op. cit.) refer to three academic studies of customer
satisfaction in relevant fields. Not being an academic and not have access to the
necessary search tools, I don‟t know if these are comprehensive. I expect that they
might be, Fiordelisi and Molyneux are thorough, I‟d say, and know their way round
academic research. But even if they are not, they are, in my experience, representative.
In any event, these studies are a good starting point. The exhibit below shows indicates
where we are in analysis of satisfaction. We are attempting to uncover the descriptive
criteria attributes in which customers think about what makes them satisfied by a bank‟s
services.
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Facts about the respondent‟s banking
behaviour
Facts about the respondent
Facts about the respondent‟s
perceptions of specific banks
Predictions about the respondent‟s behaviour
Projected stimuli
Affluence
Age
Attitude to finances
Products held, which bank(s)?
Distribution channels used, frequency
Satisfaction with bank A
Perception of brand A
Alternatives
Customer defined perception criteria
Action threshhold
Customer defined switching, seeping
criteria
My purpose here is to begin to work towards a useful taxonomy of perceived benefits
that is valid across all banking markets and across all brand audiences. This might not
equate exactly to the design of a survey questionnaire but at some level of aggregation
it is desirable to express a total brand view. An element, say „responsiveness‟ may
require different wording in the personal banking market than for rating agencies. But
the broad concept should remain the same. In this case, that concept is the banks
willingness to interact with an external group with a willingness to interact and respond
to their needs. In my experience of deterioration of bank brands a failing in this area at
the branch level is mirrored in a failing at the top floor of the head office.
Conceptual Model of Service Quality (Parasuraman et alxv)
This study focused on service firms in general. They identified ten dimensions of
customer satisfaction. These were reduced to five as the elements shown below showed
a high rate of correlation. They were brought together under the term „empathy‟.
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access
courtesy
communication
credibility
security
understanding / knowing the
customer
empathy
I‟m wary of this. I am indeed wary of letting statistical analysis over-ride business
judgement rather than acting as a pointer to something interesting. The above elements
may all correlate but that doesn‟t make them much the same from a customer‟s
perspective. Moreover, I doubt if a high level of correlation would be found in personal
banking. Access would not be seen as much the same as understanding / knowing the
customer, for example. It is quite easy to experience courtesy from a banker who quite
evidently has no understanding of your financial situation. In business banking, where I
have deeper experience, „understanding my business‟ is a key discriminator between
banks from a customer‟s experience.
In general, however, I don‟t doubt that empathy does matter. Key elements, I believe,
include:
Knowing me and my situation;
Knowing how I like to communicate and deal with people; and
Engaging with my values and aspirations.
However, to go along with Parasuruman et al, the dimensions we are left with are now:
Reliability (the consistency of performance and dependability eg the company
performs the service right first time and honours any promises);
Responsiveness (the willingness or readiness of employees to provide services);
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Assurance (the knowledge and courtesy of employees and their ability to inspire
trust and confidence);
Empathy (the care and individual attention that a company provides its
customers);
Tangibles (the physical evidence of the service).
These are close to my own understanding of what matters in the market.
The determinants of Service Quality: Satisfiers and Dissatisfiers” R Johnstonxvi
This study identifies these drivers of satisfaction.
reliability
commitment
ability to answer customer‟s need
flexibility
integrity
competence
functionality
access
aesthetics
courtesy
care / attention
friendliness
communication
tidiness
comfort
safety
Johnson distinguishes between hygienic factors – those that do not create satisfaction if
well managed but create dissatisfaction if poorly managed – and those that create
satisfaction, more or less in proportion to how well they are managed. This is related to
Kano Analysis, which is discussed in detail elsewhere in this series of papers. The
elements in italic font above are seen as hygiene factors.
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Also Johnson contains elements that parallel some that Parusuraman groups under
„empathy‟. I show the correspondences below.
access
courtesy
communication
credibility
security
understanding / knowing the
customer
competence
reliability
commitment
flexibilty
ability to answer customers‟ needs
courtesy Care, attentionfriendliness
communication
functionality
access
comfortaesthetics
tidiness
integrity
safety
Not comparable
Parusuraman Johnston
Of these, it seems to me access matters too much to be grouped under empathy.
Access is not easy to define. It is about providing customers with ease to access to the
bank, in branches and offices, though Point of Sale machines and Automatic Teller
Machines; through „phone and online. More importantly it is about integrating these.
Most of the studies I discuss here were made at a time when this integration was not so
important.
Courtesy, friendliness are certainly important. They matter because much of banking
is a commodity so a smile does make a difference. They also matter because banking of
anything is a a little stressful for customers. They could come under the heading
empathy but I wonder if perhaps they should be there in their own right and, in the
questionnaire at least not masked by an abstract term.
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Communication is another masking abstraction. Also it covers many media, face to
face, „phone, letter. Is it communication by the bank or the customer? It should be kept
in mind but expressed in another way.
Credibility is a rather complicated. It is in a slightly different category to, say,
responsiveness. Credibility is a customer‟s belief about future bank actions. It is
somewhat akin to trust or brand in that regard.
Security means different things in different circumstances. To take two polar extremes,
on the one we have „all customers have the right to feel safe on our premises’. Which is
true but which is a bit specific to events that are fairly rare and sometimes trivial. They
are not my „top of mind‟, for a satisfaction survey.
Security from fraud and identify theft are another matter. How banks react to this sort
of thing is a subject of much concern to customers. Expectations that a bank would
aggressively try to prove the breach was the fault of the customer and there for no
liability to the bank can be a major source of customer concern.
Understanding / knowing the customer can have a different emphasis in different
markets.
Demographic Discriminators of Service Quality in the Banking Industry –MR Stafford
MR Stafford Demographic Discriminators of Service Quality in the banking Industry
(1996) identifies these drivers of satisfaction.
reliability and fairness
tellers
ATMs
availability and convenience
relationship with customers
rates and costs
branch atmosphere
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It should be noted here that, in the minds of many people, retail banking is mass
consumer banking. Various forms of private banking and business banking tend not to
be “top of mind” for people without experience of retail banking.
Reliability and fairness is a double barrelled criteria that, in market research, we are
enjoined to never to use. The reason is that respondents may have a bank that is one
or the other. Customers are thought to be unable to weigh up a score for both together.
I‟m more easy going than most on this but I‟d say that reliability and fairness are a bit of
a squeeze in one line.
The word tellers is too vague. Tellers do matter lot but they can be a problem in
satisfaction in several ways including: being insufficient in number. Being poorly trained;
being unfriendly; not spending enough time customers facing. It is hard to be specific
about what are teller issues, teller supervision issues; policy issues; equipment issues
and so forth. On a somewhat narrower range of things ATMs present much the same
problem.
Relationship with customers is just too broad to be useful.
Rates and fees. This is the only element in these three surveys to cover this one of
Croxford et al‟s four drivers of customer satisfaction.
Bank marketers make much effort in deciding on the ideal branch configuration (within
the constraints of the buildings they inherit. I guess branch atmosphere is important
to satisfaction.
Summary of the three academic studies
As you might expect there is not a lot of conflict in the three studies.
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In the exhibit which follows, I have tried to line up the drivers of satisfaction identified in
the academic research into similar categories and also group them against the headings
I have taken from Croxford et al.
Shareholder Value creation
Improve the
relationship
between shareholders
and other
stakeholders
Optimise
customer
satisfaction
Optimise bank efficiency
Optimise bank’s
financial
structure
Optimise the
mix of business
activities
Controllable at business unit level
Final Goal
Endogenous
goal
Endogenous drivers
Controllable at corporate level
Adapted from Shareholder Value
in Banking, Franco Fiordelisi ,
Philip Molyneux 2006
Brand = trust
comfort
Customer service =
customer
experience
Bank costs =
price to the
customer
Products /
services (fitness
to the purpose)
= what I want
Customer
satisfaction
Source: Adapted from The Art of Better Retail
Banking, Hugh Croxford, Frank Abramson,
Alex Jabonowski John Wiley & Sons Ltd 2005
Customer perceptions
Perception of price
Perception of specification fit to needs
Perceptions of service experience
Perceptions of brand
Bank efficiency
Bank financial structure
Mix of businesses
Corporate centre
performance
Business unit performance
Shareholder value
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A diagrammatic summary of correspondences
reliability
responsiveness
competence
empathy
tangibles
assurance
reliability
commitmentflexibilty
ability to answer customers‟ needs
courtesy Care attention friendliness
communication
functionality
access
comfortaesthetics tidiness
integrity
reliability and fairness
tellers ATMs
availability and convenience
relationship with customers
Rates and costs
branch atmosphere
safety
Pro
duct,
serv
ices
specifia
ction
Bra
nd,
trust
Serv
ice c
usto
mer
experience
Fees,
charg
es,
rate
s
Croxford
Parusuraman
Johston
Stafford
Commentary
Service quality / customer experience
Perception of price
Customer perceptions
+
Perception of specification fit to needs
Perceptions of service
experience
Perceptions of brand
+
+
+
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The four elements identified by Parusuraman et al seem to be fairly well confirmed by
Johnson and Stafford. Courtesy, friendliness, care / attention and communication,
identified by Johnson seem to correspond to the several factors grouped by Parusuraman
et al under the umbrella of empathy. Some confirmation is offered by Stafford.
My interpretation is that at the heart of customer experience are two things:
Stability, consistency, reliability; and
Adaptability, flexibility, responsiveness.
There are a couple of things to be said about these as satisfaction criteria.
First they can be contradictory: „I want a bank that is consistent and reliable so i
understand the ground rules and can predict their behaviour BUT when I want them to i
want them to bend the rules specially for me’. This means that banks have a bit of a
juggling act to perform. Customers are quite capable of changing their attitudes
overnight as their interests change.
Secondly, from the customer‟s perspective stability and adaptability relate both to the
bank itself and a business organisation and to the bank as it is part of the system of
which they are the centre. A bank that cannot both adapt and stabilise is not strong
enough to help them.
Thirdly, the qualities of adaptability and stability are familiar ones. We find that they are
goals of all open systems that desire viability. This of course is not evidence that these
criteria are the right ones. But is does give some confidence that we are on the right
track. Can we integrate into this though pattern the two other elements that came from
Parusuraman.
The other elements (putting aside tangibles) are:
Empathy (something of a ragbag that I want to strip of some of its elements);
and
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Assurance, (by which as i take it Parusuraman something more like perceived
competence than trust in the meaning of Croxford.). Stated by Fiordelisi &
Molyneux as: ‘the knowledge and courtesy of employees and their ability to
inspire trust and confidence’. It actually goes a bit beyond objective competence
to highlight the customer‟s perception of competence.
Let‟s summarise a favourable customer perception.
My bank is consistent so I know where I am with them;
I have a relationship with them, they understand me, and we get on; so
they are flexible in managing my accounts. and
they have the competence to create solutions for me.
reliability
responsiveness
empathy
competence
stability
adaptation
Internal within the bank
Brought to my service
Compare this to the stories that customers tell themselves in their heads that i described
in Section 3 – How customer perceptions develop.
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They value me
as a business
customer
Understands my
business
Responsive and
flexible
Helpful and
supportive
Helps
businesses
achieve their
business goals
Primary
causality
Positive
feedback
We can begin to see how satisfaction research can begin to evaluate and measure the
power of these stories.
reliability
responsiveness
empathy
competence
stability
adaptation
Internal within the bank
Brought to my service
Reaches back to organisational or personal
skills and resources
Reaches forward towards customer needs
Within the framework of the four key customer experience / service attributes we can
cover most of the related attributes. For example and bank being classed as proactive
in its customer service has really taken responsiveness one step forward away from a
reactive stance.
Product / service fit to needs
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These are the elements of the three academic studies that seem most closely related to
product / service needs fit.
functionality
access
tellers ATMs
availability and convenience
Pro
duct,
serv
ices
specifia
ction
It doesn‟t really seem to cover the field. Let‟s look at some of the elements. These are
the product features that the bank has designed to respond to customer perceived
benefits. The Croxford approach separates these features from the actual service
delivery of them.
Perception of price
Customer perceptions
+
Perception of specification fit to needs
Perceptions of service
experience
Perceptions of brand
+
+
+
In terms of the Gaps model I have referred to earlier, and illustrated in the exhibit
below, we are trying here to distinguish between the effects of two separate failings.
The first is the design of the product service offering in response to indentified customer
needs (Gap 2). The second is the failure to deliver that offering through service.
Ideally, these two separate performance gaps should be distinguished as a guide to
management action.
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Comprehension of customer beliefs, needs, values and behaviour
Design of product service offering range
Executing the solution
Selecting / specifying the market
Shareholder value
Communicating the product service offering
Creating the solution
Gap 1
Gap 2
Gap 3
Gap 6
Gap 7
Gap 4
Gap 5
Gap 8
Price
Perception of price
Customer perceptions
+
Perception of specification fit to needs
Perceptions of service
experience
Perceptions of brand
+
+
+
Bank pricing involves, interest rates, fees and charges is relatively complex. The
academic studies under review have only one reference to it. They are, of course,
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focussed on service but service I believe can only be interpreted in the light of
functionality and price.
reliability
responsiveness
competence
empathy
tangibles
assurance
reliability
commitmentflexibilty
ability to answer customers‟ needs
courtesy Care attention friendliness
communication
functionality
access
comfortaesthetics tidiness
integrity
reliability and fairness
tellers ATMs
availability and convenience
relationship with customers
Rates and costs
branch atmosphere
safety
Pro
duct,
serv
ices
specifia
ction
Bra
nd,
trust
Serv
ice c
usto
mer
experience
Fees,
charg
es,
rate
s
Croxford
Parusuraman
Johston
Stafford
I shall return to the issue price in my discussion of measuring business banking
customer satisfaction below.
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Comprehension of customer beliefs, needs, values and behaviour
Design of product service offering range
Executing the solution
Selecting / specifying the market
Shareholder value
Communicating the product service offering
Creating the solution
Gap 1
Gap 2
Gap 3
Gap 6
Gap 7
Gap 4
Gap 5
Gap 8
Brand
Perception of price
Customer perceptions
+
Perception of specification fit to needs
Perceptions of service
experience
Perceptions of brand
+
+
+
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reliability
responsiveness
competence
empathy
tangibles
assurance
reliability
commitmentflexibilty
ability to answer customers‟ needs
courtesy Care attention friendliness
communication
functionality
access
comfortaesthetics tidiness
integrity
reliability and fairness
tellers ATMs
availability and convenience
relationship with customers
Rates and costs
branch atmosphere
safety
Pro
duct,
serv
ices
specifia
ction
Bra
nd,
trust
Serv
ice c
usto
mer
experience
Fees,
charg
es,
rate
s
Croxford
Parusuraman
Johston
Stafford
In much the same way as I believe service cannot be divorced from functionality and
price, I also believe that it must be seen against the backdrop of brand.
Business banking case study
Having covered some of the academic studies around satisfaction in personal banking
markets, I want to turn to the business market. I see this as covering all businesses
from the smallest up to low range corporate. The latter I define broadly as ones more
likely to turn to banks for finance than securitised debt. However, the evidence I shall
use is based on the part of the TNS Business Finance monitor that deals with businesses
with up to AUD 5 million annual turnover.
First, some background.
TNS
At the time of writing, TNS is the second largest market research company in the world
and the largest in custom research. The finance sector is one of its main areas of
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industry expertise. In Australia the TNS Finance and Business Services team and I
developed and worked on the BFM.
The Business Finance Monitor (BFM) The BFM surveys the banking behaviour and attitudes of 2,000 agricultural businesses
and 10,000 non-agricultural businesses with turnover up to $300 million each year, and
has collected data from over 79,000 businesses since its inception. Prior to October
2002, the BFM interviewed businesses with annual turnover up to $40 million. Sample
quotas align businesses to the market by activity, size and location. The data is also
weighted to Australian Bureau of Statistics information to ensure the results are
representative of Australian businesses. The Business Finance Monitor is conducted by
TNS using computer assisted telephone interviewing (CATI). The BFM interviews the key
financial decision maker in the business, whether this is the owner or an employee of the
business. Interviewing is conducted continuously on weekdays during business hours 50
weeks of the year. Continuous quality control (monitoring and call backs) is
administered to ensure data accuracy.
The Conversion Model™ The Conversion Model is a TNS proprietary methodology, which I have fully described in
this and other papers in this series.
The imagery component of the BFM
The imagery component of the BFM was introduced by Gary Lembit. I wasn‟t wholly
behind the idea at the time but I have through experience learned to appreciate the
depth it adds to analysis. It allowed the collection of the data I am going to refer to here.
In another part of the BFM, respondents are asked to rate their main bank (only) against
performance attributes on a 1-5 scale. Imagery is dealt with differently.
Respondents are read a series of statements and are asked what banks they associate
with those statements whether they deal with them or not. We record the incidence of
nominations for each bank against each statement. The list of statements that we offer
respondents is shown below listed alphabetically. In the actual interviews the order they
are asked in is rotated by the CATI system to help eliminate order bias.
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Best Bank for Women in Business
Clear, simple and consistent processes
Competitive rates and fees
Convenient
Helpful and supportive
Helps businesses achieve their business goals
Honest and trustworthy
Innovative products and services
Investment expertise
Offer a full range of products and services
Proactive service
Responsive and flexible
Reputation as a business bank
Responsive and flexible
Support the broader community
They value me as a business customer
Understands my business
Very professional
The list was established at the outset of the BFM. As I said above it was partially the
result of a process of negotiation between banks and TNS Australia. However, as the
imagery component was new to business banking tracking, there was less need to
replicate what had been done in the past. Some elements such „Best bank for women in
business‟, Support the broader community‟ and ‘Investment expertise’ which may appear
to stand out a bit were in response to the strategies at the time of one or more of the
participating banks.
As a first step to coming to grips with this I have analysed the imagery attributes
according to the main drivers of customer perceptions that I took from Croxford et al.
They don‟t exactly dovetail to each other but all bases are covered in one way or
another.
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Best Bank for Women in Business
Innovative products and services
Clear, simple and consistent processes
Competitive rates and fees
ConvenientHelps businesses
achieve their business goals
Honest and trustworthy
Helpful and supportive
Reputation as a business bank
Provides value for money
Proactive service
Offer a full range of products and
services
Investment expertise
Understands my business
They value me as a business customer
Support the broader community
Responsive and flexible Very professional
Pro
duct,
serv
ices
specifia
ction
Bra
nd,
trust
Serv
ice c
usto
mer
experience
Fees,
charg
es,
rate
s
I shall now compare the BFM imagery questions with the framework developed by
Parasuraman et al having eliminated the attributes that are outside Parasuraman‟s scope
– shown in orange below.
Best Bank for Women in Business
Innovative products and services
Clear, simple and consistent processes
Competitive rates and fees
ConvenientHelps businesses
achieve their business goals
Honest and trustworthy
Helpful and supportive
Reputation as a business bank
Provides value for money
Proactive service
Offer a full range of products and
services
Investment expertise
Understands my business
They value me as a business customer
Support the broader community
Responsive and flexible Very professional
Pro
duct,
serv
ices
specifia
ction
Bra
nd,
trust
Serv
ice c
usto
mer
experience
Fees,
charg
es,
rate
s
The comparison with Parasuraman then looks like this.
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Reliability
Responsiv
eness
Em
path
yAssura
nce Innovative products
and services
Clear, simple and consistent processes
Convenient
Helps businesses achieve their
business goals
Helpful and supportive
Proactive service
Understands my business
They value me as a business customer
Responsive and flexible
Very professional
Bear in mind that a full comparison would also take into account the BFM‟s performance
attributes which comprise:
Offering flexibility;
Pricing competitively;
Responding to your needs quickly;
Offering sound business banking advice;
Recognition for the business you do with them;
Providing the latest in electronic and internet banking services;
Understanding your business and its history;
Providing a comprehensive product range;
Providing access to specialists;
The knowledge and expertise of the bank‟s representatives;
Service provided by senior bank representatives you deal with.
In particular the attributes above cover the two things important to customers that are
not present among the imagery attributes – quick response and access to specialists.
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With the wisdom of hindsight I should like to see more on reliability and something more
direct on competence (covered by Parasuraman under „Assurance’ ).
I want now to understand better what customers see as the main differentiators among
banks.
The sample size used in this analysis The sample for this analysis is taken from the BFM for the three years to March 2007.
This gives a large sample to work with. I believe that how people form impressions of
banks to which they are committed or otherwise changes little over a three year span.
By working with such a large sample it becomes possible in subsequent analysis to break
down the data in a number of different ways that clients may require.
It should be noted that the observations are based on all respondents irrespective to
who they bank with. Therefore a respondent may be committed to more than one bank
and may be open to several banks. The exhibit below summarises the overall results.
This part of analysis is concerned with the perceptions that shift respondents from
ambivalence to availability as indicated by the red arrow. I have omitted weakly and
strongly unavailable respondents from this chart as they are large in number so they
distort the picture and are irrelevant to the analysis. Broadly we can think of ambivalent
non-customers of a bank as being ones that don‟t have any particular aversion to it and
don‟t have a strong connection to their existing bank(s). On the other hand available
non-customers of a bank are somewhat well disposed towards that bank (although they
may be well disposed towards other banks too).
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Sample size by category
5,014
9,955
13,64315,842 14,975
45,140
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Entrenched Average Shallow Convertible Available Ambivalent
Category
Observ
ations
Entrenched
committed
Average
committedShallow Convertible Available Ambivalent
Weakly
unavailable
Strongly
unavailable
Committed Uncommitted Open Unavailable
Customers Non- customers
Total market
Contextualising the results Using a shorter form of the attribute descriptions for ease of graphical presentation, we
looked at the relationship between the attributes that were:
most often nominated by respondents; and
showed most differentiation between ambivalence and availability.
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Our first conclusion is that there is a tendency for that factors that best discriminate
between availability and ambivalence to be the hardest to achieve. The line of least
squares shown on the chart above has a somewhat downward slope. I interpret this to
mean than there is a tendency for the most important discriminators between available
and ambivalent customers to be difficult to achieve in the perceptions of non-customers.
In any event the incidence of any nominations among non customers is harder to achieve than
among customers, which have experience of a bank. For example the percentage of
entrenched committed customers nominating ‘They value me as a business customer’ is 79%.
We are interested in the joint effect of the two measures on the axis of the graph because the
more nominations an attribute has which associate it with bank the more likely it is that the
bank can project this attribute to the market. So, for example, the most nominated attribute
above is ‘Offer a full range of products and services‟. This is relatively easy for non-
customers to observe by the presence of branches and volume of advertising. But is
does little to make an ambivalent customer available. The rate of nominations among
Discrimination v difficulty
women
investment
communityinnovativeproactivehelps goals
rates and fees
reputation
responsive
clear processes
trustworthy
full range
convenient
professional
value me
supportivevalue for money
understands
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0%
Incidence of nominations by available customers
availa
ble
/ a
mbiv
ale
nt
nom
inations
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available customers is about 50% higher than for ambivalent ones. On the other hand
the attribute - Understands my business is a better discriminator. For every nomination
by an ambivalent customer it gets more than three from an available one. The problem
here is it doesn‟t get many nominations at all – a bit more than a third of those for ‘Offer
a full range of products and services‟. This means that a bank will find it hard to convey
to non- customers.
So if a bank has to focus its brand message to win business from non-customer
businesses the „sweet spot‟ is where there are a number of nominations and powerful
discrimination. I shall look more closely at those but first at the individual attributes.
Detailed commentary They value me as a business customer
This factor is the most significant discriminator but is rarely nominated. It is perhaps
difficult to understand how business people can feel valued by a bank they don‟t use.
Nonetheless nearly thirteen hundred respondents in our sample nominated a bank they
did not use. The statements specifically refers to business bank so it is unlikely they the
response is based on a personal banking relationship. Nor does they question in which
banks that are used refer to a bank the respondent has dealt with in the past.
The most likely explanation is that the respondents feel that this bank would value them.
A feeling of being valued is an important part of the story that customers frame in their
minds about the relationship they have with their bank.
‘Because my bank values my business they are responsive and flexible in
their dealings with me.’
Understanding how these stories develop is an important element in designing marketing
communications.
Provides value for money
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Along with Helpful and supportive, this is the second most important discriminator. At
least part of the way a business bank prices its services is opaque, even to customer.
This is another general impression that has formed in some peoples‟ minds. It is a
significantly stronger discriminator than Competitive rates and fees. This suggests that
respondents‟ minds are more on the „value‟ part of the equation than the „money‟.
It seems likely that value for money becomes a strong discriminator when a business
respondent feels they are not getting it from their present bank(s)
Helpful and supportive
Businesses that value a relationship with a bank are likely to do so because they are
looking for a bank that would be supportive in times of difficulty. Two-thirds of all
respondents rate the importance of who they bank with as extremely important or very
important. This indicates that they want a mutual relationship with their bank.
Responsive and flexible
Responsiveness and flexibility are to a large extent about the customer‟s perception that
they somehow get special or individual treatment. At one level it can be judged by how
a bank deals with a problem it has caused by making a mistake. At a completely
different level it can be judged by how the bank responds when it is the customer that
has made the mistake. In particular, business customers prefer a bank‟s credit
standards to be tempered with an understanding of their business.
Best Bank for Women in Business Best bank for women is a significant discriminator with a low incidence of nominations. I
expect that this is because a large majority of nomination are made by women. I have
not been able to measure this but, if true, it is an important piece of information.
Understands my business This factor normally rates highly as a driver of customer satisfaction. However, it is
often seen as something that business people do not really expect a bank to be able to
do. It is important to customers because they often believe it underpins a bank‟s ability
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to offer responsiveness and flexibility. Because a banker understands their business, the
banker is able to be more flexible. For example, they might understand the demands
place on credit by seasonality. In this analysis, however, understanding of the business
in not frequently nominated and is not a high discriminator.
Clear, simple and consistent processes I believe this to be connected to reliability. As such it tends to be expected of a bank
rather than being a motivator in itself. It is likely to be associated with a bank that a
business does not deal with when the business‟s present bank or banks are perceived to
be deficient.
Competitive rates and fees
As I say above, rates and fees tend to be opaque even to businesses that deal with the
bank. Nominations for this are, therefore likely to be impressions and related to
perceptions of inability of a businesses‟ present bank or banks to deliver on this criteria.
Proactive service / Innovative products and services
These rate less well; than impressions of supportiveness and responsiveness as a
discriminator.
Helps businesses achieve their business goals
This has relatively few nominations and is not a particularly strong discriminator. I
suspect that this is something business customers do not really expect from a bank.
However, it may delight them when they experience it.
Support the broader community This factor gets a relatively large number of nominations and is also quite an important
discriminator. It would be interesting to see how it rated for individual banks (e.g.
Bendigo) which emphasise this aspect.
Honest and trustworthy
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By contrast to some of the other elements this is one that is expected by customers and
is most valued only in its absence. This may be one of the factors that comes to the fore
when a respondent perceives that their present bank lacks it.
Very professional
Possibly this factor may be one that can be readily influenced by a bank‟s marketing
communications. People do have a clear idea of what „professional’ looks like.
Sometime it might be difficult to elicit it from them but not impossible. Certainly it‟s
worth a try as it is one of the higher nominations attributes if not a particularly good
discriminator. The fact that it may be relatively easy to communicate and may be one of
the more easily recognised factors comes together fortuitously.
Investment expertise This appears to be a weak discriminator with few nominations. More detailed analysis
may interest banks with a strong interest in cross-selling investment products.
Certainly, this is a key factor in achieving economies of scope as I shall discuss in a later
section in this series of papers.
Convenient / Reputation as a business bank / Offer a full range of products and services
These are all factors that are relatively easy to observe for non-customers. They get a
large number of observations but are weak discriminators.
Interpretation I suggest that the criteria circled in red below are those that a bank should first examine
in deciding the messages it should send to the market in order to convert ambivalent
non-customers to available ones. However, for each individual bank this generalised
comment should be modified in the light of its unique commitment profile.
The factors circled in blue are less strong as discriminators but may well be necessary to
instil in the minds of ambivalent non-customers before they consider the elements that
will truly attract them towards availability.
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To summarise, the top three things to communicate for acquisition in the Australian less
than AUD 5 million turnover business segment are being:
helpful and supportive;
responsive and flexible; and
value for money.
Discrimination v difficulty
women
investment
communityinnovativeproactivehelps goals
rates and fees
reputation
responsive
clear processes
trustworthy
full range
convenient
professional
value me
supportivevalue for money
understands
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0%
Incidence of nominations by available customers
availa
ble
/ a
mbiv
ale
nt
nom
inations
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The point I wanted to make here is that it is possible to get a good measure for the
attributes to
Measuring brand among stakeholder audiences
In Section 5, I argue that one of the challenges facing banks in branding is that these
brands have multiple audiences. Correspondingly we need to measure brand
perceptions in each of these audiences. Ideally, also we need a way to integrate the
pictures we derive of each brand audience‟s reaction to the brand.
Hitherto, in this section, I have spoken only if customers (shown in orange in the exhibit
below).
Retention discrimination v difficulty
full range
convenientcommunityinvestment
reputationinnovative
professional
women processes
proactive trustworthy
rates and fees
value for moneyhelps goals
supportiveresponsiveunderstands
value me
1
1.5
2
2.5
3
3.5
4
4.5
5
9% 14% 19% 24% 29% 34% 39% 44% 49%
Incidence of shallow nominations
Sh
allo
w / c
on
ve
rtib
le n
om
ina
tio
ns
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Brand audiences
Staff
Customers
Suppliers of
capital
Regulators
Stock analysts
Credit ratings
agencies
Personal
business
Mass market
Affluent
Institutional
Corporate
Medium
Small
Commentators Media
Consumer groups
Politicians
Suppliers
Management
Operational
ICT
Management
Consultants
Asset advisors
Independent
intermediaries
Unions
Ad agencies
Mortgage brokers
Financial Planners
Insurance brokers
Institutions
Bank Supervisors
Consumer / trade
Employment
Affiliates
Joint ventures
Card schemes
There are several categories within the aggregate of customers representing different
markets in which the bank can participate. Each of these segments has different needs
– or why segment them? The survey instrument that the bank uses for each will be at
least slightly different in each case. However there should be an overarching framework
that supports bringing together a bank-wide view. At this point I have to confess, in the
two senior bank marketing roles I have held I would have been mad as hell to be told I
had to conform to the overall design of a another division of the bank. In fact in one
bank I decided to ignore the fact that I was supposed to use the market research
department of the personal banking division. I mention that just so no one
underestimates the difficulty of the achieving the cross corporate, integrated view that I
am speaking about. And is this is difficult across customer segments, it is harder still
among non-customer brand audiences. I shall talk about the organisational problems
more in Section 9 – Bank structure and brand control.
The exhibit below shows some of the key satisfaction criteria for the customer brand
audience. I have attempted to group these by the four main groupings of customer
perceptions that I have identified in this section:
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Reliability;
Responsiveness;
Capability; and
Empathy.
It is these that I propose to use as the key unifiers of the data to be collected across all
customer segments and brand audiences.
I have also tried to align the perceived attributes against the three Kano Analysis
groupings of attributes:
Dissatisfies;
Satisfiers; and
Delighters.
I want to do this because, I believe that they offer thresholds that once crossed can take
brands into new dimensions. By using the categories I define above, there thresholds
can be delineated.
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Customer perceptions of primary service attributes
Reliability
Responsiv
eness
CVapability
Em
path
y
Proactive
Convenient
Consistent
Flexible
Helpful
Supportive
Knows / understands me
Innovative products / processes
Values me
Shares my goals
Open / transparent
CapableProfessional
Integrity
Access how I want
Communicates what I need to
know
Tailored solutions
Access to experts
Timely
Accurate
Kano dissatisfiers Kano satisfiers Kano delighters
Good network
Innovative solutions
In addition to the four attributes above I have done a similar exercise for the other three
elements that I have identified as determinants of customer perceptions. (Note that as I
work through the key brand audiences below, I shall only show the non-service
classification where is relevant.
Capability
Reliability
Empathy
Flexibility
Perception of price
Perception of specification fit to
needs
Perception of service
experience
Perception of brand
Customer perceptions
Bank efficiency
Bank financial structure
Mix of businesss
Business unit performance
Corporate centre
performance
Shareholder value
Perception of event
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Customer perceptions of non service satisfaction attributes
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Change flexibilty
Supportive of the community
Innovative solutions
The bank for people like me
Clear specifications / documentation
Product specific capability
Integrated with society
Access / transact how I
want
Easy to track / integrate with my records
Tailored solutions for me
Product expertise support
Accurate / timely reporting
A range that meets my needs
Good range integration
Right mix of distribution
channels for me
Value for moneyCompetitive
pricingInnovative
pricingTailored pricing
to my needs
Tax effective pricing
A bank that moves things
forward for the better
Prestigious
Fair
Kano dissatisfiers Kano satisfiers Kano delighters
Staff
Staff should be surveyed in conjunction with customer surveys although survey
frequency need not be the same. The exhibit below tells part of the story. There may,
however need to be greater granularity in practice. In practice I have in the past
conducted staff surveys in parallel with customer surveys. However, I lacked at that
time the prescience to develop questionnaire surveys instruments capable of integration.
The staff surveys, at a time of rapid organisation change were half-yearly and the
customer surveys were annual, supplemented by quarterly syndicated studies.
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Brand audiences
Staff
Customers
Suppliers of
capital
Regulators
Stock analysts
Credit ratings
agencies
Personal
business
Mass market
Affluent
Institutional
Corporate
Medium
Small
Commentators Media
Consumer groups
Politicians
Suppliers
Management
Operational
ICT
Management
Consultants
Asset advisors
Independent
intermediaries
Unions
Ad agencies
Mortgage brokers
Financial Planners
Insurance brokers
Institutions
Bank Supervisors
Consumer / trade
Employment
Affiliates
Joint ventures
Card schemes
Staff perceptions of primary service attributes
Reliability
Responsiv
eness
Capability
Em
path
y
Consistent treatment of
staff
Friendly and supportive
Knows / understands me
Financially succesful bank
They value me
I can realise my goals here
Open / transparent
Capable managementProfessional
Integrity
Timely, open staff
communication
Flexible working condtions
Access to colleagues as
needed
Par of a winning team
Good counselling and
feed back
Training based on my needs
Good growth prospects
Good working standards and
policies
Clear personal and team goals
Kano dissatisfiers Kano satisfiers Kano delighters
Fairness
Exposure to leading edge
work
Access to external experts
in my field
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Staff perceptions of non service satisfaction attributes
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rew
ard
sRole
specific
ation
Supportive of the community
Integrated with society
A bank that moves things
forward for the better
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Clear objectives
Clear rewards system
Clear incentives
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rew
ard
sRole
specific
ation
Supportive of the community
The employer for people like
me
Integrated with society
A bank I can be proud of
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Clear rewards system
Clear incentives
Fair pay
Good rewards relative to the
industry
Objectives well integrated with those of others
Clear hierarchy and reporting
lines
Clear directions / delegations
Providers of capital and commentators
The third key stakeholder group are the providers of capital. My preference is to group
those media commentators directly concerned with the share price with providers of
capital and those concerned with other aspects of a bank‟s performance and role in the
community with regulators. However this is largely a matter of choice.
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Brand audiences
Staff
Customers
Suppliers of
capital
Regulators
Stock analysts
Credit ratings
agencies
Personal
business
Mass market
Affluent
Institutional
Corporate
Medium
Small
Commentators Media
Consumer groups
Politicians
Suppliers
Management
Operational
ICT
Management
Consultants
Asset advisors
Independent
intermediaries
Unions
Ad agencies
Mortgage brokers
Financial Planners
Insurance brokers
Institutions
Bank Supervisors
Consumer / trade
Employment
Affiliates
Joint ventures
Card schemes
Financial media
Providers of capital perceptions of non service satisfaction
attributes
Reliability
Responsiv
eness
Capability
Em
path
y
Capable management
Professional
Timely, open communication to
market
Capable Board
Kano dissatisfiers Kano satisfiers Kano delighters
They mean what they say
Management understand the needs of the finance
market
Adequate statutory financial statements
Clear relevant strategy
Well defined position in industry
Investment in key resources
Ownership of strategic assets
Effective response to unexpected
events
Capable CEOCapable CFO
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Intermediaries
Intermediaries‟ needs are broadly a cut down version of customers‟ needs. My
qualitative research into intermediaries of various kinds, including mortgage brokers and
financial planners strongly suggests to me that they greatly value consistency,
predictability and reliability. They tend to value these things more highly than what
banks think of as the more value added aspects of service. Intermediaries I have found
often judge their own performance by throughput of deals. Moreover, they tend
mentally to discount things that might strengthen the banks‟ relationship with the end
client at the expense of their own.
In many ways intermediaries are similar in their perceptions of banks to affiliates and
suppliers. They are most distinguished by being smaller organisations, sometimes one-
person businesses. Under some circumstances they could be more susefully grouped
together.
Brand audiences
Staff
Customers
Suppliers of
capital
Regulators
Stock analysts
Credit ratings
agencies
Personal
business
Mass market
Affluent
Institutional
Corporate
Medium
Small
Commentators Media
Consumer groups
Politicians
Suppliers
Management
Operational
ICT
Management
Consultants
Asset advisors
Independent
intermediaries
Unions
Ad agencies
Mortgage brokers
Financial Planners
Insurance brokers
Institutions
Bank Supervisors
Consumer / trade
Employment
Affiliates
Joint ventures
Card schemes
Accountants
Other
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Intermediary perceptions of primary service attributes Reliability
Responsiv
eness
Assura
nce
Em
path
y
Convenient
Consistent
Flexible
Helpful
Open / transparent
CapableProfessional
Integrity
Access how I want
Communicates what I need to
know
Access to experts
Timely
Accurate
Kano dissatisfiers Kano satisfiers Kano delighters
Intermediary perceptions of non service satisfaction attributes
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rew
ard
sRole
specific
ation
Supportive of the community
Integrated with society
A bank that moves things
forward for the better
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Clear joint objectives
Clear rewards system
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rew
ard
sRole
specific
ation
Integrated into the communities in which they do
business
Known in the industry to be
solid performers
The best partner among all those available to us
Prestigious to be connected to
Kano dissatisfiers Kano satisfiers Kano delighters
Clear relationship agreement
Fair division of jointly created
value
Alignment with co related
organisations
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Affiliates and suppliers
It has been said that a key determinant of success in banking is to be linked into the
best networks. Card schemes are of course important. But as a more general point it is
the placement of a bank within the networks of suppliers of technology that matters
most. I have discussed earlier how the primacy of banks in the development of their
own technology has been somewhat eroded over time. A large part of the institutional
skill associated with technology is dispersed and possibly mercenary. Given that ICT is
such a large part of the future (quite possibly fronted at the customer interface by
intermediaries) this needs some thought. The patterns of institutional relationships that
banks construct around themselves now will involve some big decisions that may be
hard to reverse. And brand is a large part of this. Brands that are enviable, brands are
compatible, brands with a future will all matter a lot.
Brand audiences
Staff
Customers
Suppliers of
capital
Regulators
Stock analysts
Credit ratings
agencies
Personal
business
Mass market
Affluent
Institutional
Corporate
Medium
Small
Commentators Media
Consumer groups
Politicians
Suppliers
Management
Operational
ICT
Management
Consultants
Asset advisors
Independent
intermediaries
Unions
Ad agencies
Mortgage brokers
Financial Planners
Insurance brokers
Institutions
Bank Supervisors
Consumer / trade
Employment
Affiliates
Joint ventures
Card schemes
Accountants
Other
Outsource
providers
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Affiliates and supplier‟s perceptions of non service satisfaction
attributes Reliability
Responsiv
eness
Capability
Em
path
y
They are friendly and supportive to deal
with
They knows and understand our
organisation
Financially succesful bank
They value the relationship with
us
The relationship helps us realise our own
goals
Open / transparent
Capable managementProfessional
Integrity
Timely, open communication
Good feed back on our
contribution
Good growth prospects
Sound operating procedures
Kano dissatisfiers Kano satisfiers Kano delighters
They give us exposure to leading edge work
They have world class expertise in key areas that affect us jointly
They have a thorough understanding of the sector in which we
cooperate
Affiliates and suppliers perceptions of primary service attributes
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Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rew
ard
sRole
specific
ation
Supportive of the community
Integrated with society
A bank that moves things
forward for the better
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Clear joint objectives
Clear rewards system
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rate
s,
fees
charg
es
Pro
duct
/ serv
ice s
pecific
ation
Supportive of the community
Integrated with society
Prestigious
Kano dissatisfiers Kano satisfiers Kano delighters
Clear job description
Bra
nd
Rew
ard
sRole
specific
ation
Integrated into the communities in which they do
business
Known in the industry to be
solid performers
The best partner among all those available to us
Prestigious to be connected to
Kano dissatisfiers Kano satisfiers Kano delighters
Clear relationship agreement
Fair division of jointly created
value
Alignment with co related
organisations
Commentators and regulators
I group commentators and regulators together just for convenience and sample size.
Regulators clearly have more „skin in the game‟ when things go wrong. I suggest taking
out those media commentators whose field is valuing securities. They are more usefully
grouped with the suppliers of capital.
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Brand audiences
Staff
Customers
Suppliers of
capital
Regulators
Stock analysts
Credit ratings
agencies
Personal
business
Mass market
Affluent
Institutional
Corporate
Medium
Small
Commentators Media
Consumer groups
Politicians
Suppliers
Management
Operational
ICT
Management
Consultants
Asset advisors
Independent
intermediaries
Unions
Ad agencies
Mortgage brokers
Financial Planners
Insurance brokers
Institutions
Bank Supervisors
Consumer / trade
Employment
Affiliates
Joint ventures
Card schemes
Accountants
Other
Outsource
providers
household money
consumer
general
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Commentators and regulators‟ perceptions of non service
satisfaction attributes
Reliability
Responsiv
eness
Capability
Em
path
y
Capable management
Professional
Timely, open communication to
market
Capable Board
Kano dissatisfiers Kano satisfiers Kano delighters
They mean what they say
Management understand the needs
of regulators
Adequate statutory financial statements
Clear relevant strategy
Well defined position in industry
Effective response to unexpected
events
Capable CEOCapable CFO
Capable Board Risk Rommittee
Strong sense of corporate responsibility
Rapid and effective
response to queries
Some concluding comments
My main purpose in this subsection has been to try to show that there are strong
commonalities among the research attributes for each brand audiences and that these
can be brought together into a common framework to allow a stakeholder wide
perception of brand.
The actual wording I have used may not be exactly what I would use in a real survey.
That are certainly indicative, however, of the main things I should want to test. I offer
them in some detail in this paper so that if you wish to pursue this line of thought, you
will at least not be starting with a blank sheet of paper. It is a difficult task and one that
I have not been able to achieve more than cursorily. I wish, however, that I had.
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Grouping attributes by Kano Analysis categories should of course be done through
surveys of the market. However, I attach as an Appendix an instrument I used once for
an internal rating when I was trying to get some feel for it with no funds for proper
research.
The exhibit below suggests the direction in which a bank should be attempting to take its
brand.
EmpathyCompetence Reliability Responsiveness
Capability underpins everything. Without
it a brand doesn't get to first base
Capability means little if the
customer can‟t rely on it
Responsiveness channels
capability to the customer
Empathy relates capability to
customer needs
Dissatisfiers
Delighters
Satisfiers
The way forward in measuring
bank brands
It is a theme of this series of papers that being serious about branding is a choice each
bank has to make. Being serious about branding is difficult, expensive and making
certain decisions about the sort of organisation you want to be. These choices are
defining ones not easy to reverse although much easier to lapse from. I shall discuss
this in more depth in later sections. However, as I say elsewhere deciding not to brand
in any serious way is certainly an option for a bank. Branding, of course, to some extent
happens anyway, well or ill. Purposeful, favourable branding does not just require time,
effort and money. It also more that you might think defines the sort of organisation a
bank will be and will become. I believe a bank can be successful without good branding.
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I will explain how in the papers of this series in which I deal with implementation. Such
banks, however, are not the ones that I would wish to work in.
I‟m not arguing that to measure its brand successfully a bank must do everything that I
say in this section. Much of what I say here is to offer bank marketers starting points in
deciding what is best in their circumstances. I think, however, there are some key
points.
1. Measurements are necessary if progress is to be managed.
2. Satisfaction is an important starting point but it is not the whole story of brand
measurement.
3. There are several approaches to selecting a focal satisfaction question. I would
choose the Conversion Model, given a blank sheet of paper to start with.
4. However, there are other approaches that would probably work just as well
providing:
each respondent‟s satisfaction data with all providers is maintained at the
respondent record level; and
the framework of explanatory attributes is well designed.
5. It is not enough to measure customer segment satisfaction. There must be
measures for all key brand audiences.
6. There must be a viable framework of attributes to allow the integration of
responses.
7. Ideally, these should include something like the service classification that I have
adopted above of:
a. capability;
b. reliability;
c. responsiveness; and
d. empathy.
8. Kano analysis should also be supported. In this way thresholds are created that
allow the progress of brand development to be better measured.
9. There needs to be corporate skill in understanding market research and
interpreting its findings. This skill must be based on a certain management
maturity in working with the limitations of research.
10. None of this can be achieved unless designed into management structures and
processes.
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In the next section I shall turn to valuing customer relationships.
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Appendix 1 – An instrument I used to be able to experiment with Kano Analysis without the expense of
surveying clients
Background to the survey I foreshadowed this survey at the TNS Business Finance Monitor Advisory Council meeting on 20 April. I emphasise that I'm
asking for your input as part of my private research into using customer satisfaction (or commitment) to improve shareholder
value. At some point this information may be of use to TNS and its clients but right now it is only a priority for me. You are
under no obligation to respond but, of course, I hope you do.
Purpose
The end purpose of this survey is to help TNS and its clients to be better able to use understanding of the drivers of customer
commitment in the BFM to design organisational responses that create shareholder value.
Your response I am seeking the response of individuals with some experience and an involvement in the industry. You were selected because
you attended the Advisory Council meeting. I am not seeking a bank response. If you believe that other people in your
organisation should also respond who meet the criteria of having and interest in and knowledge of the subject, I should be
delighted to include their response separately. Please note I have not asked you to rate the relative importance of the attributes.
This is because these can be derived from the BFM and a separate study is dealing with this aspect.
How the research will be used
I shall report the results to all respondents with my commentary. If, as a result of that report, respondents wish to change their
assessments, they are welcome to do so. I shall report to BFM subscribers further on my findings of how investment in
customer satisfaction can create shareholder value. Any BFM subscriber who wishes to use the classification of BFM
attributes in the reports they receive from TNS can do so by consulting their TNS relationship manager.
Timing
I shall begin my analysis of responses on June 1.
The BFM imagery and performance attributes The imagery attributes can be associated by respondents with any bank, whether they deal with them or not. The performance
attributes are rated by respondents for their main bank only.
The Questionnaire About you
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Individual responses to this survey will be confidential. I will not reveal them to TNS. However, I do want
to report accurately the names, titles and experience levels of the people who contributed. The
classifications I shall use in reporting the results will not include the financial institution the respondents
work for.
Your name
Job title
Department / business unit
The name of your financial institution or market research provider
Which of the following statements best describes your background in relation to this survey? Please type X next to one only
market researcher - client side
market researcher -agency side
marketing in a financial institution but not specifically market research a line management role in a financial institution
Approximately how many years of work experience do you have that you think are in some way relevant to retail banking?
How controllable are the attributes? I want to get your estimate of how easy it is for a bank to control this attribute from the corporate centre. Some
performance attributes are relatively easy to control from the centre others are not. For example decisions about the terms and conditions of a banking product can be relatively easily made by the heads of business banking, credit, or products whereas changes to the way a field force of relationship managers deal with their customers day to day are harder. Please use your judgement to rate each of the attributes below on a scale of 1 to 10 where 10 means :highly controllable by the corporate centre and 1 means uncontrollable by the corporate centre. Remember, I am not asking what happens in your bank just for your opinion of what is likely for business banks in general. .
Your rating
Best Bank for Women in Business
Clear, simple and consistent processes
Competitive rates and fees
Convenient
Helpful and supportive
Helps businesses achieve their business goals
Honest and trustworthy
Innovative products and services
Investment expertise
Offer a full range of products and services
Proactive service
Provides value for money
Reputation as a business bank
Responsive and flexible
Support the broader community
They value me as a business customer
Understands my business
Very professional
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Offering flexibility
Offering sound business banking advice
Pricing competitively
Providing a comprehensive product range
Providing access to specialists
Providing the latest in electronic and internet banking services
Recognition for the business you do with them
Responding to your needs quickly
Service provided by senior bank representatives you deal with
The knowledge and expertise of the bank's representatives
Understanding your business and its history
How do the attributes affect customer perceptions?
Your rating
Best Bank for Women in Business
Clear, simple and consistent processes
Competitive rates and fees
Convenient
Helpful and supportive
Helps businesses achieve their business goals
Honest and trustworthy
Innovative products and services
Investment expertise
Offer a full range of products and services
Proactive service
Provides value for money
Reputation as a business bank
Responsive and flexible
Support the broader community
They value me as a business customer
Understands my business
Very professional
Some people use a classification of attributes based on Kano Analysis. In this, some attributes are
considered to be dissatifiers. That is to say they are expected by customers. They do not
especially satisfy the customer when they are done well but cause dissatisfaction when they are
managed poorly. An example might be the accuracy of bank statements. Other attributes are
satisfiers in that they engender customer satisfaction more or less in direct proportion to the
customer’s perception of how well they are managed. An example might be bank representative’s
responsiveness to expressed customer needs. Still other factors are sometimes called delighters.
These are not usually expected by customers but, when managed well, can delight the customer
beyond mere satisfaction. An example might be assisting the customer with a risk management
problem that the customer did not know they had. Please use your own judgement to classify the
attributes below by using the following numerals:Dissatifiers = 1; Satisfiers = 2; Delighters = 3.
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Offering flexibility
Offering sound business banking advice
Pricing competitively
Providing a comprehensive product range
Providing access to specialists
Providing the latest in electronic and internet banking services
Recognition for the business you do with them
Responding to your needs quickly
Service provided by senior bank representatives you deal with
The knowledge and expertise of the bank's representatives
Understanding your business and its history
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Note and comments to Section 6
iAmong TNS people whose contributions I especially value are:
Gary Lembit;
Sharon Taggart;
Duncan Rusby;
Danny Meisels;
Tania Kullmann;
Jenny Powell.
I am sure there are other names that I have inadvertently omitted.
ii Possible in other sectors also, However, in this series of papers, where I can speak
authoritively at all, it is only about banking and related financial services.
iii As I have said before in this series, I am not a psychologist but that model has been
useful to me over the years.
iv Actually bank customers seen to rarely get cross with the bank staff that they actually
deal with. They instinctively know that the people they deal with work within the
constraints of the system. However, the head office designers of the system naturally
prefer to measure satisfaction with the people at the customer interface.
v TNS, which recently merged with Research International, is the world‟s largest custom
research agency. TNS offers comprehensive industry knowledge within the Consumer,
Technology, Finance, Automotive and Political & Social sectors, supported by a unique
product offering that stretches across the entire range of marketing and business issues,
specialising in product development & innovation, brand & communication, stakeholder
management, retail & shopper, and qualitative research. Delivering best-in-class service
across more than 70 countries, TNS is part of Kantar, the world‟s largest research,
insight and consultancy network.
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In Australia, the TNS Finance and Business Services team is a dedicated division with
extensive experience and expertise in financial services. They conduct qualitative and
quantitative research in both the B2B and B2C arena, on behalf of the leading players in
Australia‟s finance and business sector. The team of consultants has expertise and
qualifications in finance, management, human resources, psychology, statistics,
commerce, business and marketing. www.tnsglobal.com.
The Kantar Group is one of the world's largest research, insight and consultancy
networks. By uniting the diverse talents of more than 20 specialist firms the group aims
to become the pre-eminent provider of compelling and actionable insights for the global
business community. It has 26,500 employees working across 80 countries. The group‟s
services are employed by over half of the Fortune Top 500 companies. The Kantar
Group is a wholly-owned subsidiary of WPP Group plc. www.kantargrouptns.com.
The TNS Business Finance Monitor is the Australian Industry currency in measuring
the attitudes and behaviour of Australian businesses towards their finances and financial
institutions, and is subscribed to by Australia‟s leading banks.
This report provides insights into business banking customer satisfaction trends in
Australia. It tracks long-term trends since inception in June 2002 and more recent trends
over the last two years.
The BFM collects information on an extensive range of topics including: business
characteristics, business health, banking profile, banks used, products used, transaction
profile, satisfaction levels (the topic addressed in this report), commitment levels
towards each bank (using the TNS Conversion Model™), relationship management,
business needs, bank image, and external influences.
This report is available to all current subscribers of the satisfaction data (which is
collected as part of the TNS Business Finance Monitor) with the intention of providing a
standard comparable measure across the industry.
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Each year, the BFM surveys the banking behaviour and attitudes of 2,000 agricultural
businesses and 10,000 non-agricultural businesses with an annual turnover up to $300
million. It has collected data from over 93,000 businesses since its inception. It is
important to note that the data in this report is based on a rolling six-month sample and
a rolling twelve-month sample; the latter is comprised of approximately 9,900 non-agri
businesses with annual turnover up to $100 million.
vi In fact for some clients this figure rises to AUD 300, 000 but the main part of the
survey is up to AUD 100,000.
vii These included at the time Gary Lembit, then of TNS now at Macquarie Bank,
Catherine Paton for the Commonwealth Bank, Peter Harrington for Westpac, now
Managing Director, Director at QAI Consulting, and John Marinopolous, then of NAB now
Managing Director of the Strategic Intelligence Group. The latter two can be found on
LinkedIn.
viii Timothy L. Keiningham, Bruce Cooil, Tor Wallin Andreassen, & Lerzan Aksoy
A Longitudinal Examination of Net Promoter and Firm Revenue Growth
ix Which one of these statements best describes how you feel [MAIN BANK]? Do you?
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[SINGLE response. Read out]
Definitely make a point of speaking favourably about them 1
Mention them favourably if they came up in discussion 2
Mention them unfavourably if they came up in discussion 3
Definitely make a point of speaking unfavourably about them 4
Wouldn't talk about banks at all 5
Refused 8
Don't know 9
Actually, I like this question because it includes the option „wouldn‟t talk banks at all‟, I
rather suspect there‟s a lot less talking about banks that bankers think..
x Which is not to imply thay these need to be asked as part of a tracking study along
with satisfaction questions.
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xi My first experience of this type of question actually came in around 1993 when Dr
Robert Joss then CEO of Westpac introduced it into a staff questionnaire I had drafted as
his only amendment – would you recommend Wespac to a family friend or relative as a
place to work. So I think the basic idea has been around quite a while.
xii At that time Chief Manager, Commercial banking at Westpac.
xiii Three in the more recent version of the Conversion Model.
xiv One TNS proprietary approach that i should know more about than I do is TRI*M™. I
apologise to its adherents.
xv Parusuraman, Zeitaml and Berry “A conceptual Model of Service Quality and its
Implications for Future Research”, 1985 Journal of Bank Marketing 49,
xvi “The determinants of Service Quality: Satisfiers and Dissatisfiers”, International
Journal of Service Industry Management (1995), and “Identifying the Critical
Determinants of Service Quality in Retail Banking: Importance and effect”, International
Journal of Bank Marketing 1997