Business banking sentiment has fallen to its lowest level in nine years

http://www.australianbankingfinance.com/banking/cover-story--making-the-customer-king/ “There has been a concerted effort over this period by banks to focus more on the customer, which has included providing more flexible and convenient ways to deal with banks without having to rely on the more traditional branch focus,” he said. “An example of this is the high level of internet banking and its satisfaction levels across the Big Four.”

Unfortunately, business banking is not doing as well. The latest East & Partners’ Business Banking Index (BBI) reveals that business banking sentiment has fallen to its lowest level in nine years. It found that the Big Four achieved an average score of 24.4 (where 10 is low and 100 is high), 10 per cent below the market average and nearly three times lower than the best performing bank, Bank of Queensland (BOQ). “The Big Four’s relatively lower aggregate score reflects persistent dissatisfaction, compounding over an extended period of time,” said East & Partners analyst Jessica Gao. Since March 2012, sentiment towards three out of the four majors has fallen by almost 20 per cent.

The BBI confirmed that poor business banking relationships were more prominent among small businesses. The micro business segment, with an indicative BBI score of 11.4, was more than five times less satisfied than the well-serviced corporate segment which had a BBI score of 60.6. And almost no business customers would currently advocate their Big Four bank to friends or colleagues. “The Big Four’s business customers are clearly disengaged,” observed Gao. “Advocacy and loyalty are now practically non-existent. This is excellent news for competitors outside of the Big Four, with business owners actively seeking alternative solutions across the full product suite.” She noted that small businesses in particular were exploring working capital and cash flow relief options outside of traditional channels. BOQ, Suncorp and St George  consistently scored above average across all four contributing metrics and were set to benefit from business owners  exasperation when it came to dealing with their relationship bank, she said. Spreading the word Peter Kriss, a senior research scientist at Medallia, and Robert Schiff, vice president and general manager, financial services at Medallia, noted that as an industry, banking did a terrible job of creating loyalty among its customers. They stress that customer experience isn’t just about service — it is the way that a bank approaches its products, processes and customer interactions. “Great customer experience means that customers accomplish all their banking needs with minimal effort and a high degree of delight and trust. “The proliferation of word-of-mouth online is driving up consumers’ power to shape brands. The sum of individual, concrete interactions drives retention and increases good oldfashioned word of mouth. Marketing campaigns entice, but loyalty is built by focusing on individual customers.” Indeed, a recent McKinsey & Company study showed that word-of-mouth is the only factor that ranks in the top three consumer influencers at every stage of the purchase decision journey.

Kriss and Schiff added: “Not only do companies need to provide great experiences to generate positive referrals, they also recognise that it’s essential to have robust systems in place to save dissatisfied customers and prevent negative word-ofmouth. Word-of-mouth hits the bottom line on an individual-byindividual basis. It is often conflated with branding and marketing efforts, but it is driven by real experiences that customers have with banks. “That is where word-of-mouth gets its authority and that is why it is such a great determinant for purchase decisions. And now that there are so many online channels for word-of-mouth, the days when people can be fooled by clever ads are coming to an end. That money is better spent on creating great experiences.”