Customers not fickle when it comes to service
(21 January 2013 – Australia) Service levels on transaction banking products continue to be the biggest driver of bank advocacy by business customers, according to the latest research from industry analyst East & Partners.
East’s most recent bi-monthly Business Banking Index (BBI) report reveals that
across all business segments the service level experienced by customers is the
most important driver for them to advocate their banks, nominated by 29.3
percent of all respondents.
East asked respondents to choose the most important of seven different drivers, and the 29.3 percent response for service levels was more than double that of the second ranked criteria for the total market - the responsiveness of the bank, which stood at 14.2 percent of all respondents.
There was, however, a significant variance between the market segments with Micro Businesses ranking pricing highly at 21.3 percent while only 4.1 percent of Institutional customers nominated pricing as a driver. Micro customers also ranked the availability and ease of accessing credit highly at 27.4 percent, while this was nominated by only 0.9 percent of Institutional customers.
Institutional customers ranked the closeness of their relationship manager highly with 24.9 percent, as well as product features and performance with 24.0 percent. These results were significantly higher in the November BBI in comparison with the previous research conducted in September, where the same criteria recorded Institutional scores of only 3.6 percent and 2.8 percent respectively.
Most Important Driver Encouraging Advocating Primary Bank
% of Respondents
Source: East & Partners Business Banking Index – November 2012
East also examined business customers on the products that had the largest influence on advocating their bank, with 32.4 percent of total respondents nominating transaction banking products. Next most important was foreign exchange at 20.4 percent.
Overall, the November 2012 BBI Index – which aggregates the results of all the research – continued to decline, suggesting ongoing disenchantment with banking providers.
The November Index score was 31.4, against 31.7 in September and 33.0 in November 2011. The BBI Index is a score out of 100, with a higher number indicating a greater level of satisfaction and advocacy among customers.
Lachlan Colquhoun, Head of Market Analysis at East & Partners said this BBI round showed that customer attitudes were changing rapidly.
"The last two BBI results have illustrated a dramatic shift in sentiment from businesses at the top and bottom end of town," said Colquhoun.
"In November, Micro Businesses focussed more on pricing and bank responsiveness, but in September these two barely rated at all."
"At the other end of the market, Institutional customers are now concerned with product features and performance and not with pricing, while the results from September were the other way around."
"The next BBI series will tell us if these changes are emerging and consistent trends, or if sentiment is still skittish in what is still an uncertain economic environment."
About East & Partners’ Business Banking Index
A bi-monthly Index of business customer behaviour toward their banks, based on interviews conducted Australia-wide with a structured sample of over 6,150 companies across four segments annually.
The Index provides a monitor of a number of important drivers of customer engagement behaviours with their banks including advocacy, detraction, empathy, satisfaction, loyalty, channel engagement, advertising recognition, product demand, product advocacy and mind share.
Index Methodology: For this round of the Business Banking Index, direct interviews have been conducted with 1,011 businesses based on a structured sample frame of the target population nationally, comprising:
› Institutional – 221 – (A$530 + million turnover enterprises)
› Corporate – 248 – (A$20 – 530 million turnover enterprises)
› SME – 289 – (A$5 – 20 million turnover enterprises)
› Micro – 253 – (A$1-5 million turnover enterprises)
For more information or to interview East & Partners, please contact:
Sian Dowling
Marcomms & Client Services
East & Partners
t: 02 9004 7848
m: 0420 583 553
e: sian.d@eastandpartners.com
East asked respondents to choose the most important of seven different drivers, and the 29.3 percent response for service levels was more than double that of the second ranked criteria for the total market - the responsiveness of the bank, which stood at 14.2 percent of all respondents.
There was, however, a significant variance between the market segments with Micro Businesses ranking pricing highly at 21.3 percent while only 4.1 percent of Institutional customers nominated pricing as a driver. Micro customers also ranked the availability and ease of accessing credit highly at 27.4 percent, while this was nominated by only 0.9 percent of Institutional customers.
Institutional customers ranked the closeness of their relationship manager highly with 24.9 percent, as well as product features and performance with 24.0 percent. These results were significantly higher in the November BBI in comparison with the previous research conducted in September, where the same criteria recorded Institutional scores of only 3.6 percent and 2.8 percent respectively.
Most Important Driver Encouraging Advocating Primary Bank
% of Respondents
|
Product |
Micro | SME | Corporate | Institutional | Total |
|
Product features and performance |
3.2 | 4.2 | 15.7 | 24.0 | 11.1 |
|
Service level experienced |
27.7 | 30.1 | 30.2 | 29.0 | 29.3 |
|
Closeness of your relationship manager |
3.2 | 6.9 | 19.4 | 24.9 | 13.0 |
|
Pricing |
21.3 | 13.8 | 3.6 | 4.1 | 11.1 |
|
Responsiveness of the bank |
19.4 | 18.3 | 13.3 | 4.1 | 14.2 |
|
Your bank being proactive on issues |
6.3 | 10.4 | 13.7 | 10.9 | 10.3 |
|
Availability and ease of accessing credit |
17.4 | 14.5 | 2.8 | 0.9 | 9.4 |
|
Other |
1.6 | 1.7 | 1.2 | 2.3 | 1.7 |
|
TOTAL |
100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
Source: East & Partners Business Banking Index – November 2012
East also examined business customers on the products that had the largest influence on advocating their bank, with 32.4 percent of total respondents nominating transaction banking products. Next most important was foreign exchange at 20.4 percent.
Overall, the November 2012 BBI Index – which aggregates the results of all the research – continued to decline, suggesting ongoing disenchantment with banking providers.
The November Index score was 31.4, against 31.7 in September and 33.0 in November 2011. The BBI Index is a score out of 100, with a higher number indicating a greater level of satisfaction and advocacy among customers.
Lachlan Colquhoun, Head of Market Analysis at East & Partners said this BBI round showed that customer attitudes were changing rapidly.
"The last two BBI results have illustrated a dramatic shift in sentiment from businesses at the top and bottom end of town," said Colquhoun.
"In November, Micro Businesses focussed more on pricing and bank responsiveness, but in September these two barely rated at all."
"At the other end of the market, Institutional customers are now concerned with product features and performance and not with pricing, while the results from September were the other way around."
"The next BBI series will tell us if these changes are emerging and consistent trends, or if sentiment is still skittish in what is still an uncertain economic environment."
About East & Partners’ Business Banking Index
A bi-monthly Index of business customer behaviour toward their banks, based on interviews conducted Australia-wide with a structured sample of over 6,150 companies across four segments annually.
The Index provides a monitor of a number of important drivers of customer engagement behaviours with their banks including advocacy, detraction, empathy, satisfaction, loyalty, channel engagement, advertising recognition, product demand, product advocacy and mind share.
Index Methodology: For this round of the Business Banking Index, direct interviews have been conducted with 1,011 businesses based on a structured sample frame of the target population nationally, comprising:
› Institutional – 221 – (A$530 + million turnover enterprises)
› Corporate – 248 – (A$20 – 530 million turnover enterprises)
› SME – 289 – (A$5 – 20 million turnover enterprises)
› Micro – 253 – (A$1-5 million turnover enterprises)
For more information or to interview East & Partners, please contact:
Sian Dowling
Marcomms & Client Services
East & Partners
t: 02 9004 7848
m: 0420 583 553
e: sian.d@eastandpartners.com
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