Niche or specialist banks are 'most recommended'

This emerged from a recent survey carried out in South Africa by Bain, which showed the big four banks had a net promoter score of 22% compared with an average of 70% for the specialist banks.

The survey sought to find out how likely local bank customers were to recommend their bank to a friend or colleague.

The high scores of specialist banks such as Investec and Capitec could be because they concentrated on a particular niche or market segment‚ said Innocent Dutiro‚ a partner at Bain.

Bain said promoters stayed longer with their specialist bank‚ were less price-sensitive‚ spent more‚ cost less to serve and generated new business through word-of-mouth recommendations to their friends and colleagues.

Dutiro said there was no ideal local or global individual or average net promoter score for banks such as the big four in South Africa.

However‚ he said the target should be to achieve individual scores higher than those of rivals or even of the combined group average if banks wanted customers to become their brand ambassadors.

Local banks have always used customer service as one of the benchmarks to measure growth and retention. But they have been intensifying the implementation of strategies to innovate and were lowering fees and charges to protect or grow market share.

These measures are in anticipation of the Financial Services Board's treating customers fairly policy.

Last week Don Peppers‚ the founding partner of another global consultancy group‚ Peppers & Rogers‚ said banks and other companies in the financial sector should aim to gain what he described as the "extreme trust" of customers.

Dutiro said banks should invest in customer service by starting with the basics and identifying factors that would make a customer a promoter or detractor for the bank. For example‚ he said it made no sense to invest in "flashy" branches when customers complained about long queues or errors in their bank statements.

Michael Jordaan‚ the chief executive of First National Bank‚ said last week that FNB was constantly using feedback from customers to innovate and improve its service.

"Our biggest source of information comes from customer complaints‚" he added.