Measuring and Defining Customer Loyalty

How does your FI define, and more importantly, measure customer loyalty? A very interesting blog came across my desk today on this topic.

Generically, it seems as though most FI’s define customer loyalty as customer satisfaction. Also, a huge amount of importance is placed up that always present survey questions: “How likely are you to recommend?”

The author of this blog takes issue with the idea of using the metric to define customer satisfaction and loyalty. This is merely an intention, and as he says, intentions don’t pay the bills! He also noted that 37% of respondents (bank and credit union marketers) don’t keep track of where their referrals originate from, so that even if someone actually does make a referral, they don’t ever know.

To me, the most interesting part of the blog came later on. Thirty-five percent of consumers got “help” from their FI in the year leading up to the survey, while 65% did not. “Help” here is defined as advice, guidance or education – not monetary. Of that 35%, 49% made (not said they would, but actually did) a referral, and 20% grew their accounts. Pretty crazy!

Take a look at the article, and see how your FI stacks up. Here’s what I took out of it: CUSTOMER HELP = MORE REFERRALS + ACCOUNT GROWTH= HAPPY CUSTOMER, HAPPY FI 🙂