Big four failing to impress their biggest customers

by AB23 Apr 2013

Customers’ satisfaction with the big four banks reached a seventeen-year high of 78.9% in March (up 0.1% from February), but ‘high value’ clients remain the most unhappy, according to Roy Morgan Consumer Banking Satisfaction Report for March, 2013.

High value customers are described as the top 20% who have 65% of the industry’s total footings or value and this particular market segment’s satisfaction stands at just 73.5%.

Roy Morgan says it appears the banks’ efforts to improve their customers’ satisfaction has been focused more on the lower-value customers, as they have much higher satisfaction levels and have also shown the greatest improvement over the last 12 months.

In March, CBA continued to lead the majors in customer satisfaction overall with 80.4% (no change from February), followed by NAB (79.3%, up 0.1% points), ANZ (77.3%, up 1.1% points) and Westpac (77.1%, down 0.6% points).

Norman Morris, industry communications director at Roy Morgan Research, says a great deal of attention has been given to improving satisfaction of bank customers over the past decade and that, on the whole, this has been successful, with satisfaction now at record levels.

“The challenge now is to lift the satisfaction of the highest value customers and potential customers if profit is to be impacted. This analysis has shown that the high levels of satisfaction among lower value customers is unlikely to lead to any substantial increase in revenue because these customers have very little potential. There is a need to remember that the bottom 40% of customers only control less than 3% of the market value.”

Morris says higher value customers have more complex needs and are therefore likely to be more difficult to service, but says the long-term gains are much greater.  

“There are two areas in particular that the high value or top quintile customers of each of the big four banks rate their bank low on and require some improved focus. The first one is the issue relating to having ‘fair fees and charges’. This remains a major problem despite the efforts by banks to improve in this area but it appears to be the lower value customers that are feeling more positive toward their bank on this dimension.”

Another problem experienced more by the high value customers, says Morris, is that they require their bank to be more flexible or ‘willing to bend a little to meet customers’ needs’.

“It is important to keep in mind that the top segment is not a homogenous group and that some are there because of a high level of debt, some because of a high level of investments and others a mix of the two. This is a complex group but the rewards for improving their satisfaction with a bank are considerable.”