Customer sentiment falls again
(24 January 2007 – Australia) Customer sentiment towards Australia’s banks fell again in East & Partners’ latest Business Banking Sentiment Index, an indication of banks continuing struggle to improve relationships with business customers.
East’s monthly Business Banking Sentiment Index for November/December, which monitors businesses turning over A$1 to 100 million, reveals that business banking customers rated commercial banks more poorly in this latest Index.
Businesses awarded their business banks a Sentiment Score of just 42.4 (out of 100) compared with 42.7 in October. It is the fifth consecutive month the Sentiment Score has dropped – from its highest point of 45.0 in June.
The Sentiment Score is an aggregated score of four different measures of customer sentiment – Empathy, Satisfaction, Loyalty and Advocacy. The scores are a rating given by customers, not responses to a Yes/No question.
Although St George remains the best performing bank in terms of overall customer sentiment, with a Sentiment Score of 55.1, up from 54.7 points the previous month.
ANZ, National Australia Bank, Bank of Queensland and HSBC also improved their sentiment scores in the November/December Index.
Commonwealth Bank’s Sentiment Score dropped for the fifth month in a row to a new low of 35.7 against a market average of 42.4. Westpac again slipped backwards to 37.4 compared with 38.3 the month before.
Micro Businesses (A$1 to 5 million) continue to be the least happy customers, awarding the banks a Sentiment Score of just 31.1, down from 32.1 in October. SMEs (A$5 to 20 million) also rated their banks less highly in October, giving their business banks a Sentiment Score of just 36.5, down from 37.4 in the previous Index.
The performance of banks to Lower Commercial companies (A$20 to 100 million), which are typically more relationship managed than SMEs and Micro Businesses, recovered in November/December after deteriorating in October. These companies gave banks a Sentiment Score of 62.4 compared with 60.8 in October.
Queensland businesses continue to more positive towards banks than other states, awarding the banking sector a Sentiment Score of 51.9, up from 51.2 the previous month.
Business banking customers in Victoria and NSW were less positive, giving the banks Sentiment Scores of 45.5 and 34.1 respectively.
"The consistently declining overall Sentiment Score indicates that businesses do not feel particularly attached to their banks," East & Partners senior consultant Paul Bartholomew said.
"Whilst the demand for additional services is increasing there is a frustration that few bankers are willing to sit down and really get to know these businesses. This lack of a connection between banks and their customers is resulting in poor or at best average scores.
"Along with shrinking margins driven by competition, the shallowing of relationships between banks and their small business customers that the Index has consistently highlighted was definitely the key theme in the business banking markets in 2006," Mr Bartholomew said.
The East & Partners Business Banking Sentiment Index is a monthly survey of business customer sentiment towards banks, providing a monitor of customer satisfaction, loyalty, advocacy and empathy towards business banks. Each month East & Partners’ research team will conduct telephone interviews with a sample of 500 businesses nationally, turning over A$1 to 100 million per annum.
For further information, please contact:
Paul Bartholomew
Senior Consultant
East & Partners
Tel: 02-9004 7848
Mob: 0410 400 156
paul.b@eastandpartners.com
Businesses awarded their business banks a Sentiment Score of just 42.4 (out of 100) compared with 42.7 in October. It is the fifth consecutive month the Sentiment Score has dropped – from its highest point of 45.0 in June.
The Sentiment Score is an aggregated score of four different measures of customer sentiment – Empathy, Satisfaction, Loyalty and Advocacy. The scores are a rating given by customers, not responses to a Yes/No question.
Although St George remains the best performing bank in terms of overall customer sentiment, with a Sentiment Score of 55.1, up from 54.7 points the previous month.
ANZ, National Australia Bank, Bank of Queensland and HSBC also improved their sentiment scores in the November/December Index.
Commonwealth Bank’s Sentiment Score dropped for the fifth month in a row to a new low of 35.7 against a market average of 42.4. Westpac again slipped backwards to 37.4 compared with 38.3 the month before.
Micro Businesses (A$1 to 5 million) continue to be the least happy customers, awarding the banks a Sentiment Score of just 31.1, down from 32.1 in October. SMEs (A$5 to 20 million) also rated their banks less highly in October, giving their business banks a Sentiment Score of just 36.5, down from 37.4 in the previous Index.
The performance of banks to Lower Commercial companies (A$20 to 100 million), which are typically more relationship managed than SMEs and Micro Businesses, recovered in November/December after deteriorating in October. These companies gave banks a Sentiment Score of 62.4 compared with 60.8 in October.
Queensland businesses continue to more positive towards banks than other states, awarding the banking sector a Sentiment Score of 51.9, up from 51.2 the previous month.
Business banking customers in Victoria and NSW were less positive, giving the banks Sentiment Scores of 45.5 and 34.1 respectively.
"The consistently declining overall Sentiment Score indicates that businesses do not feel particularly attached to their banks," East & Partners senior consultant Paul Bartholomew said.
"Whilst the demand for additional services is increasing there is a frustration that few bankers are willing to sit down and really get to know these businesses. This lack of a connection between banks and their customers is resulting in poor or at best average scores.
"Along with shrinking margins driven by competition, the shallowing of relationships between banks and their small business customers that the Index has consistently highlighted was definitely the key theme in the business banking markets in 2006," Mr Bartholomew said.
The East & Partners Business Banking Sentiment Index is a monthly survey of business customer sentiment towards banks, providing a monitor of customer satisfaction, loyalty, advocacy and empathy towards business banks. Each month East & Partners’ research team will conduct telephone interviews with a sample of 500 businesses nationally, turning over A$1 to 100 million per annum.
For further information, please contact:
Paul Bartholomew
Senior Consultant
East & Partners
Tel: 02-9004 7848
Mob: 0410 400 156
paul.b@eastandpartners.com
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