Satisfaction with big four banks up in December but high-value customers left well behind for satisfaction and advocacy

In contrast to the high satisfaction levels in the bottom quintile, the highest quintile—which represents nearly two thirds (62.9%) of total market value—is least satisfied with the big four. With such a large (and potentially profitable) group being well below the average satisfaction level for each bank, it highlights the need for increased attention if overall satisfaction levels and growth rates are to be improved. The scope for business growth in the top quintile is very significant, as all the major banks are only achieving an average share of around 30% of the potential business (‘share of wallet’) from their customers in this segment.

Once again, the CBA achieved the highest level of satisfaction of the big four, satisfying 75.6% of this quintile, followed by Westpac (74.3%), ANZ (71.3%) and NAB (70.6%).

Tough competition for top-quintile customers

The smaller banks’ satisfaction levels among their high potential value customers (top quintile) are much higher than the big four. The best performer of the 12 largest banks was Teachers Mutual Bank with 96.1% satisfaction, followed by Bendigo Bank (91.6%) and ING Direct (87.8%).

Consumer Banking Satisfaction by Top Value Quintile¹ Customers: 12 Largest Consumer Banks²

The chart above illustrates how much better the smaller banks are doing in satisfying this segment, the best of the big four being the CBA (75.6%). It is interesting to note the large difference between banks in the same group such as Westpac (74.3%) and St George on (82.9%).

Performing well in satisfaction among this important segment is critical in order to achieve greater ‘share of wallet’ and hence overall growth.

Top-quintile customers are much less likely to be strong advocates

Bank customers in the top quintile have the lowest ‘net promotor score’ (NPS) or advocacy levels and as such show a very similar pattern to that seen with satisfaction. The highest NPS for the big four banks overall is for the bottom quintile with + 10, which is in contrast to the - 23.9 for the top quintile.

All of the big four banks have very low NPS scores for their top quintile customers, with the best being -20.1 for the CBA and the lowest was the NAB with -26.9.

The bottom quintile of the CBA has the best overall NPS with +15.0 and the lowest was Westpac on -2.6.

Norman Morris, Industry Communications Director, Roy Morgan Research says:

“Since around 2000 when satisfaction with banks fell below 60%, the big four banks have worked hard to improve customer satisfaction, and have since achieved major gains to now be hovering around 80%. Furthermore, the big four’s satisfaction levels are now much closer than they were 10 years ago, which makes it increasingly difficult to carve out a clear market positioning as the satisfaction leader among this group.

“As Roy Morgan has reported previously, a focus on customers who are ‘very satisfied’ provides a more stringent criteria and a tougher benchmark for banks to target.

“Over the last decade, advocacy (NPS) has been used in addition to satisfaction as an important metric to assist banks in improving their level of customer focus. This research shows that there is now a big opportunity to focus both satisfaction and advocacy on the more important segments rather than simply a total market measure. With a market that is as highly skewed as finance, where 20% of customers account for nearly two thirds of the market value, banks must improve their performance with this segment if they are to achieve longer term financial gains.

“Not only does the top quintile have the lowest satisfaction and advocacy levels of the major banks, but it also has the lowest share of wallet of all the segments. Each of the major four banks has less than a third of their top-quintile customers’ wallet and as such this should become a key metric along with satisfaction and NPS in order to measure real marketing success.

“Achieving a higher share of wallet with this group represents the real challenge as they are clearly the segment with the highest potential for business growth and are likely to be more profitable than new low value customers.

“Over the last 12 months the Roy Morgan Single Source survey has included nearly 10,000 interviews with people in the top value quintile, enabling an in-depth understanding of their entire financial position. This database is unique in terms of size and depth, including the ability to look at long term trends.”