ABA Banking Journal - August 2008 - (Page 44)
Tech topics Guided by feedback: Measuring engagement customer Practice and the NPS Loyalty Forum, a community of pracustomer engagement is one of those seemingly squishy marketing titioners. Reichheld, who spoke at the recent Forrester concepts grown out of the social inter- Financial Services Forum in New York, offered a simple net phenomena and Web 2.0, which has explanation of the score. “What we found was that the surprising precision and heft once you Golden Rule applied to business,” he said. “‘Treat people the spend some time with it. In webland, way you want to be treated’ is not only an ethical way to the client who is engaged interacts with operate, it can yield a payoff.” Customers who perceive that value in the product was your site often and buys what you have to sell there; he or she may be opinion- enhanced by fair treatment and good service buy more. When a bank combines NPS information on loyalty with ated and free to offer personal information on customer profitability and other views, blog on the industry you serve, or segment data, according to Reichheld, the otherwise spend quality personal bank can glean insight about what’s time thinking about your comworking and what isn’t, supporting pany. In this sense, engagenecessary strategic shifts. The score ment is measured by metrics “‘Treat people the way also lets a bank leverage its cuslike click-through rate, tomer service and retail delivery duration of visit, and peryou want to be treated’ spend to boost profits. centage of repeat visits. is not only an ethical way In broader terms, the Important to banks engaged customer is a to operate, it can yield Having engaged and loyal cuspleased customer. tomers is important to banks, (Although definitions a payoff” which face a tough economy and, differ on this, the engaged according to Forrester Research, customer, according to —Fred Reichheld, Bain’s Loyalty Practice have received the lowest Customer Gallup, has an emotional Advocacy Rankings in the five years attachment to the brand and that the firm began looking at it. “The subgenerally incorporates it into his or prime mortgage crisis and a sagging stock marher self concept.) He or she becomes a ket has consumers feeling less confident about their regular—and possibly an advocate. financial position,” says Bill Doyle, vice-president and prinNet promoter score examined cipal analyst at Forrester Research. Banks that continue with A loud and proud metric in this broader field of engage- status quo operations and a product focus will remain on ment analysis is the Net Promoter Score, which was devel- shaky ground. oped by Fred Reichheld, founder of Bain’s Loyalty But, as bankers realize, even when the grass was greener and accounts had more green, many consumers were said to By Lauren Bielski, senior editor view retail banks as typically interchangeable and serving up C 44 AUGUST 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com
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