How to measure customer satisfaction in financial institutions? For retail banking, the most popular method is the Net Promoter Score (NPS) – a metric based on the likelihood of the clients recommending your organisation’s products. You may also use the information gathered from your customer feedback, internal surveys, or even mobile app ratings and reviews in app stores. Retention rates, customer churn, and Customer Effort Score (CES) are also viable metrics when it comes to measuring your client’s satisfaction. Do you want to learn more? Then keep reading!
Table of Contents
- What Types of Metrics Measure Customer Satisfaction?
- How Do You Measure Customer Satisfaction with Other Methods?
- Why Do You Want to Measure Customer Satisfaction?
- Conclusions
What Types of Metrics Measure Customer Satisfaction?
First, let’s adopt the more formal approach and look at the strict metrics. What are they? How do you measure customer satisfaction with them? Here is a list answering both questions.
Net Promoter Score (NPS)
The first, most commonly used metric is the Net Promoter Score or NPS. Most retail banks use it to determine how satisfied customers are with their services. How does it work?
- Customers rate the likelihood that they would recommend the bank’s products on a rate of 0 to 10.
- Based on their ratings, customers are categorised into three groups:
- promoters (9-10),
- passives (7-8),
- and detractors (0-6).
- The score is calculated using the following formula
- %Promoters – %Detractors
What is a good NPS score? Anything above 0. Generally, the higher the NPS, the better, with 0 being the middle point between bad and good scores. However, bear in mind that 0 is still pretty low when compared to scores like 50 or 80 achieved by the best organisations in the field.
Customer Service Satisfaction (CSS)
Another helpful metric for customer satisfaction evaluation is Customer Service Satisfaction or CSS. It’s pretty simple – all you have to do is provide your customers with a short survey after their interaction with your customer service agent.
You can do this by simply displaying a short pop up in your app, a text message or a short phone call. The idea here is simple – let the customer rate their interaction to see what works and how good your customer service is.
You might adopt this metric also for other processes that do not necessarily involve your agents. For example, you can ask your clients about their experiences with your digital customer onboarding process. This way, you’ll be able to evaluate not only your team but also your procedures and technological solutions.
Customer Effort Score (CES)
Customer Effort Score is a metric used to determine how intuitive your services are. Again, it’s a pretty simple metric that requires you to ask the customer about their opinion. How to measure customer satisfaction with this metric in practice?
- Provide a customer with a questionnaire asking how easy it is to use your services/products/app.
- Give the customer 5 or 7 options – the middle one should be neutral, while an equal number of positive and negative ones.
- Calculate the score with the following formula:
- %Positive answers – %Negative answers
You can enhance this metric by adding follow-up questions. This way, you will not only learn how easy it is to navigate your services, but also what are the bottlenecks making this harder.
Mobile App Ratings
When discussing what types of metrics measure customer satisfaction, we must not forget about the simplest, sometimes overlooked ones, like mobile app ratings. These can prove a valuable tool, especially since they often come with reviews.
Naturally, as a popular bank, you might find it difficult to use this metric alone since it will take time to improve the ratings after you implement changes in your mobile app. However, it’s still a good way to measure customer satisfaction – if your app is rated higher than those of your competitors, and the ratings gradually go up after your updates, it means you’re on the right track.
What if your app has pretty low scores? In this case, we recommend our UX and UI design services. At Ailleron, we’re the experts you need to evaluate your app and find the perfect solutions to improve it.
Customer Retention and Churn Rates
Customer retention and churn rates are also helpful metrics for measuring customer satisfaction. However, in their case, you need to bear in mind that it’s best to compare them to the industry average. Why?
Customer churn is an inseparable part of any business, especially banking. Therefore, it will occur no matter what you do. To see if it’s caused by low customer satisfaction, you need to juxtapose it with the same rates for other financial institutions in your niche – if the churn is higher, this means that your customers might be dissatisfied; if it’s lower, it means that your doing fine.
Additionally, you need to remember that market variables, such as a general slowdown in the economy, may cause customer churn and retention. Hence, the only viable way to use this metric is to compare it with the industry average.
What if the churn is high? You need to reduce it. How? With machine learning services for financial institutions. A good AI model taught by ML will be able to recognise behaviours that indicate customer churn, hence giving you the opportunity to prevent it from happening. What is more, such systems will also spot opportunities for cross-sells/upsells, enabling your organisation to offer products to your customers exactly when they want them.
How Do You Measure Customer Satisfaction with Other Methods?
Apart from the traditional metrics, you can use other sources to evaluate customer satisfaction in your financial institution. In general, we mean customer feedback gathered in various forms. What exactly should you focus on, and how to measure customer satisfaction with such sources? Take a look below.
Customer Surveys
Naturally, you should start with customer surveys. These can be a valuable source of information both regarding customer satisfaction in general, and the factors affecting it. How to do this properly?
- Establish the aim of the survey – What area are you trying to evaluate? Who is your target audience?
- Craft the questions – Make them concise, relevant to your aim and easy to answer – a lengthy or demanding survey might discourage customers from filling it out.
- Distribute the survey – Consider the channels you want to use in order to send the survey to appropriate audiences and utilize them.
- Analyze the results – Look through the answers to the questions and establish how satisfied your customers are and what needs to be improved.
Focus Groups
Another helpful way to gather feedback and measure your customer satisfaction is to create focus groups. All you have to do is recruit participants (preferably with diverse backgrounds), design open-ended questions, and organise focus group sessions. Make sure that these meetings take place in a comfortable, neutral environment. Also, encourage the participants to discuss their answers and express their opinions – it will provide you with additional feedback.
Why Do You Want to Measure Customer Satisfaction?
Customer satisfaction matters – it’s the make or break of any financial institution. High customer satisfaction will help you improve your retention rates, hence increasing your profit per customer and alleviating the high customer acquisition costs. Measuring it will also show you how to improve customer experience in your organisation, leading you to become a more customer-oriented financial institution.
Customer satisfaction is the basis for building long-term relationships with your clients. Therefore, you must not overlook it – you need to constantly measure it and find ways to improve it.
Conclusions
NPS, CSS, CES, and many others – all of these are the metrics with which you can measure customer satisfaction in your institution. Use different metrics and measures to gather the most accurate feedback – the more diverse the sources, the more likely you are to find exactly what your bottlenecks are. With this knowledge, you will be able to enhance your customer experience.
You might also read: Mobile Banking Engagement – How to Reach Your Customers?
