Yesterday’s blog on how little branch hours are correlated to revenue and customer satisfaction elicited a healthy dose of responses. If branch hours nutted some bankers up, just wait for the rest of today’s post, as this might really short circuit some guarded beliefs. The picture below is from our data and research and is a heat map of some selected factors and how revenue and satisfaction are dependent on those factors. The bigger the box, the more correlated the attribute is to revenue and satisfaction.
For example, if you add more branches, your revenue and satisfaction are likely to go up (that is, branches can explain about 88% of the change in revenue and satisfaction). Keep in mind that we are not saying anything about profit, as we simply do not have that data set. However, revenue is a good place to start, as our point yesterday was that satisfaction when taken in a vacuum can be misleading.
Having online and mobile banking tends to attract more customers, create larger balances and generate more transaction fees. These factors are growing in popularity and we suspect will overtake branches in the next two years. While branches, online presence, and mobile are not surprising there are a couple surprises that are interesting.
Our favorite is the “Cust. Engage” box to represent the number of times a business customer is engaged via phone call or sales call. The question of "How often you want to be contacted or met with" is hardly ever on a customer satisfaction survey and if it was, chances are it would be termed not important. However, a consistent finding is the fact that the more you meet with a customer (within reason), the more likely you are to increase accounts, balances, transactions, products, etc. This has driven one of our core philosophies that value-added customer engagement is key to increasing both revenue and satisfaction. Engagement is so important in our eyes that we encourage you to try our experiment to test this variable (blog post to come) for your own bank.
Other interesting findings are that quick credit approvals are much more important for increasing revenue and satisfaction than things like loan rates, the number of credit products available or even the safety of a bank (as determined by core capital levels).
It is no surprise that training staff to understand the bank’s product and services towers in importance, but many banks overlook the importance of training staff to understand an industry or particular line of business. Some of the most successful business development officers we have come across are successful because they specialize.
On the bottom of the stack, we point out that the number of different deposit products, the easiness of the credit process and having a referral program all help, but matter a whole lot less than resolving problems as quick as possible.
This heat map is no doubt rapidly changing and our testing this year in some of these areas are likely to yield different results than our testing last year. In addition, we will be quick to add that this is not an all-encompassing list. These service categories are just the ones that we found statistically significant and that we were either curious about or had easily available data. There are likely hundreds of other areas that we have yet to explore that also are significant and are drivers of both revenue and satisfaction.
If you have an idea to test or have done testing on your own, shoot us an email as we would love to exchange methodologies and data. Until then, hopefully, this article might provide a basis for the foundation of thinking about areas that might require more or fewer resources to drive revenue growth.
Submitted by Chris Nichols on March 20, 2014