The ROI of Customer Satisfaction

There is a strong relationship between satisfaction and financial outcomes. Specifically, retail banking customers with high levels of satisfaction (overall scores of 900-1,000) have significantly higher advocacy rates, stronger loyalty, and greater share of wallet than customers with low satisfaction (scores of 700 and lower).

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By making a concerted effort to enhance the overall customer experience, banks that are able to achieve high levels of satisfaction stand to benefit from stronger bottom-line growth and improved overall financial performance:

  • Achieving a 50-point improvement in customer satisfaction leads to an increase in deposits, loans, and investment dollars equating to a 6% increase in revenue, or $27 million per 500,000 customers.1
  • Higher levels of satisfaction are also tied to improved brand perceptions. Customers with high levels of satisfaction (900+) provide an average rating of 6.5 (on a 7-point scale) for the Brand Image attribute Good reputation vs. 6.0 for customers with satisfaction scores of 800-899. The ratings decline to 5.4 among customers with satisfaction scores of 700-799, and to 4.4 among customers of banks with scores below 700.
  • Banks that recognize the value of customer satisfaction programs—as measured based on subscription to the U.S. Retail Banking Satisfaction Study, 2010-20142—show greater improvement, compared with non-subscribers, in not only satisfaction (+49 points vs. +30 points, respectively), but also in metrics measuring loyalty (+8 percentage points vs. +4 percentage points); advocacy (+8 percentage points vs. +3 percentage points); and retention (+8 percentage points vs. +3 percentage points).

1 Assumptions: Deposits and share of wallet is self-reported. Interest margin for deposits and borrowing accounts is 3% and 1% for investments.  Service charges on deposit accounts = .23% of deposits

2 Subscribers are those banks who subscribed to the J.D. Power Retail Banking Satisfaction Study in at least 3 of the last 5 years (2010-2014).

Source: J.D. Power U.S. Retail Banking Satisfaction Study

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