“I don’t think any bank values your business. We are only cogs on a wheel”… “I would dump them in a heartbeat.”
These are real quotes from Canadian Bank customers from the Retail Banking Industry Canada Survey earlier this year. Only 27% of bank customers are advocates today. The larger banks face the biggest organic growth challenge related to advocacy. In this study, we establish the link between advocacy and higher profitability, and explore three critical questions:
- How well are banks positioned to grow on a client-by-client basis?
- Can a focus on improving advocacy unlock growth potential?
- How can banks capture and exploit this opportunity?
Canadian banks may find new opportunities to attract new clients, improve client retention, and gain market share if they increase their awareness of the link between clients’ attitudes toward their organizations and the impact these perceptions have on profitability.
Abstract
By identifying which clients are advocates, apathetics and antagonists, banks can more precisely target client experience improvement initiatives based on a more informed understanding of future value.
Clients who have a positive attitude toward the bank are advocates, while those whose experiences shape negative opinions become antagonists. As such, a bank’s ability to effectively manage and influence client attitudes becomes paramount to sustained growth and profitability.
Despite significant investment, the largest banks are not well positioned to grow their client bases: our research shows the majority of clients will be reluctant to commit to a deeper relationship as a consequence of their cumulative experience with the bank. We consistently hear banks touting their commitment to meeting the needs of their clients and putting their clients first. Accordingly, branches are once again in vogue, and executives have declared improving the client experience is the first priority for many organizations. Building the base one client at a time through cross-sell, retention and new customer acquisition is a top priority in nearly every retail bank’s agenda.
Many banks have yet to identify advocacy based segment strategies, marketing and sales programs, employee incentives, and process and technology improvements to produce higher returns. In order to acquire more clients and keep the ones they have, bank executives need to understand client attitudes and their impact on behaviour.
Identifying bank clients who can be converted into advocates must be a tenet of any customer focused growth strategy. To move customers into advocate-level relationships, the customer experience must be well understood, continuously monitored and proactively managed. We believe banks that effectively improve operations to align with the desired customer experience can create a new and sustainable competitive advantage.
Contact us to discuss a change management plan to transform your organization or for a complimentary presentation on a business problem your team would like to solve.