Boost Your Bank’s NPS with Proven Strategies
Table of Contents
Discover how to improve your financial institution’s NPS® with proven strategies that enhance customer loyalty, strengthen relationships, and drive long-term success.
In today’s competitive financial industry, customer loyalty is everything. Banks are challenged to find ways to differentiate themselves from the competition to build long-lasting, mutually value-producing relationships with their customers.
One of the most significant metrics used to evaluate customer satisfaction and loyalty is the Net Promoter Score (NPS). NPS measures the likelihood of customers recommending a bank’s products or services to others, which serves as a key indicator of customer loyalty. A high NPS typically correlates with stronger customer retention, greater customer satisfaction, and increased profitability.
But improving NPS is not just about gaining a higher score – it’s about creating value for customers and forging relationships built on trust and excellent service. Fortunately, there are a variety of proven strategies banking organizations can use to enhance their NPS, strengthening customer loyalty and driving long-term success.
This article will explore several key strategies that banks can use to achieve these goals.
1. Deliver World-Class Customer Service
The foundation of a high NPS score lies in providing outstanding customer service. According to Bain & Company, developers of the Net Promoter System, organizations that achieve 80 or above on the NPS scale qualify as “World-Class” in customer service. In other words, they reliably deliver the best experiences to their customers.
Why does this matter? Research consistently proves that customer experience is a key driver of loyalty. It stands to reason: banks that prioritize exceptional service are more likely to win the trust of their customers and inspire them to become brand advocates or promoters.
Studies also confirm that organizations with high NPS and customer loyalty outperform the competition in terms of revenue and growth. Loyal customers, over the lifetime of their relationship with you, do more business with you and sing your praises to friends and family members.
It seems so easy to connect the dots. Yet many banks and credit unions still struggle to deliver on financial consumers’ expectations.
How to Improve Customer Service
• Training Front-Line Employees: The most visible bank representatives, from tellers to personal bankers, interact with customers directly. Providing them with training in empathy, active listening, and problem-solving can improve the overall customer experience.
• Effective Problem Resolution: Customers are bound to face issues or concerns at some point. A bank that resolves problems quickly and effectively, keeping the customer’s best interests in mind, is likely to see higher satisfaction scores.
• Proactive Communication: Keeping customers informed about product updates, new services, and changes to their accounts shows that the bank values the relationship. Proactive outreach helps avoid frustration and builds trust.
By delivering a consistently positive customer experience, banks can boost their customers’ satisfaction and loyalty. Not only will these customers stay with you and do additional business with you, they will be more likely to recommend your institution to others. And in banking, as in other industries, retained, repeated, and referred business is the way to sustained winning!
2. Personalize the Customer Experience
Personalization has become one of the most effective ways to engage customers. In fact, customers everywhere EXPECT it. In the banking industry, offering personalized services makes customers feel valued, which leads to stronger relationships. When a customer feels that their financial institution knows them and understands their needs, they are more likely to sustain loyalty and recommend the bank to their peers.
How to Personalize the Experience
• Leverage Customer Data: Banks can use data analytics to better understand customer needs and preferences. This can lead to the creation of personalized offers, financial advice, or product recommendations based on an individual’s behavior and financial history.
• Customized Financial Products: Offering tailored financial products, such as loan options, credit cards, and investment services that meet the specific needs of different customer segments, enhances satisfaction and loyalty. It proves that you understand your customers’ needs and want to be their trusted financial solution provider.
• Customer Segmentation: Banks can segment their customer base based on behavior, income, and life stages (e.g., students, young professionals, retirees). By targeting specific groups with relevant messages and solutions, they increase the likelihood of attracting and retaining loyal customers.
Personalization helps customers feel more connected to their bank or credit union, which can have a significant impact on their likelihood to recommend the bank to others.
3. Enhance the Digital Experience
In an increasingly digital world, providing a seamless and intuitive digital banking experience is essential to improving NPS. Customers now expect to access banking services on their smartphones or computers on-demand and with minimal friction. A poor digital experience can lead to frustration and churn.
How to Enhance the Digital Experience
• Streamlined Mobile App and Online Banking: Invest in user-friendly mobile apps and online banking platforms that allow customers to easily access their accounts, transfer funds, pay bills, and manage investments. A smooth digital experience helps reduce customer effort, increasing satisfaction.
• Back Up AI with Human Support: Banks can implement AI-powered chatbots to provide instant customer service. Chatbots can address routine queries, enabling human agents to focus on more complex issues. This not only improves efficiency but also provides faster solutions to customers. Just remember to have knowledgeable, empathetic people readily available if customers encounter problems with the technology. When frustration is setting in, the human touch can go a long way to rescuing customer relationships.
• Provide Security and Privacy: Trust is hard to win, but so easy to lose. It is the foundation of any customer relationship, but it’s even more critical in banking. Customers want to feel that their personal information is safe. Providing robust cybersecurity measures and transparent privacy policies can boost trust and customer loyalty.
By delivering a superior digital banking experience that enables a smooth customer journey, banks can improve customer satisfaction with their experiences, ultimately boosting NPS.
4. Ask for and Act on Customer Feedback
To improve NPS, banks and credit unions need to constantly assess and respond to customer needs and demands, which are always changing. Regularly gathering feedback provides insights into areas for improvement and helps financial institutions identify opportunities to strengthen their relationship with customers.
How to Use Feedback Effectively
• Survey Customers Regularly: Sending out surveys (including the NPS survey) to customers after key interactions or journeys, such as completing a transaction or opening an account, helps capture valuable insights. Ensure that the survey is easy to complete and only takes a few minutes. Also, avoid survey fatigue by being strategic in targeting your customers with requests for feedback.
• Close the Feedback Loop: Pay attention to negative feedback and respond promptly. If a customer is dissatisfied, show them that you value their input by offering a solution. A quick intervention can mean the difference between a rescued relationship and a lost customer. Addressing complaints head-on prevents customers from feeling ignored and can turn an unhappy customer into a loyal advocate.
• Share Results of Customer Feedback: After gathering feedback, let customers know what actions have been taken based on their suggestions. For example, if you implement a new feature or service based on customer feedback, you should communicate this to customers, showing that their opinions matter. If you are constantly asking for their feedback but not making any changes as a result, your customers will begin to feel that their input doesn’t make a difference.
By actively listening to customers, responding to immediate issues, and making visible systemic improvements based on their feedback, banks and credit unions can cultivate loyalty and improve their NPS.
5. Build Trust and Transparency
It’s worth repeating: trust is the cornerstone of any banking relationship. If customers do not trust their bank, they are less likely to stay long-term and will be unlikely to recommend the bank to others. Maintaining transparency in all transactions and touchpoints can help foster this trust and lead to improved customer satisfaction.
How to Build Trust and Transparency
• Clear Communication: Banks should clearly explain terms, fees, and any potential risks associated with their products and services. Today’s consumers are increasingly fee-conscious. Avoiding hidden fees and providing straightforward information helps to build trust.
• Customer Protection: Show commitment to safeguarding customers’ financial interests, identity, and other confidential information. Adopt transparent dispute resolution processes, clear policies on fraud prevention, and ongoing security measures to achieve this objective.
• Honesty in Advertising: Banks should avoid over-promising and under-delivering. Failures to live up to expectations set by your brand promise can put you in a difficult position to recover from. Being honest in marketing campaigns about what you can realistically offer will prevent disappointments and build long-term trust.
When customers feel they can trust their bank, they are more likely to stay loyal and recommend the bank to others, positively impacting the NPS.
6. Continuously Monitor and Improve NPS
Finally, improving NPS is an ongoing process. To sustain a high NPS score, banks must consistently monitor the score, assess customer sentiment, and take continuous action to improve.
How to Continuously Monitor and Improve NPS
• Track Trends: Monitor NPS scores over time to identify patterns and track improvements or declines in customer satisfaction. If you’re not meeting your target, ask yourself: what is missing in your process? What are you going to do differently?
• Act on Actionable Insights: Use NPS data to understand what drives customer loyalty and dissatisfaction. Focus efforts on addressing the most significant pain points and enhancing the aspects of the banking experience that customers value most.
• Foster a Customer-Centric Culture: Ensure that customer satisfaction is a priority at every level of the bank, from leadership to front-line employees. Cultivating a culture of customer-centricity leads to continuous improvements in service and NPS.
By consistently monitoring and improving NPS, banks can maintain a loyal customer base and achieve long-term success. A CX metric like NPS can guide your next move, if you know what it is telling you. This critical intel about your customers can give you the confidence to act promptly and decisively.
Conclusion - Improve NPS to Fuel Your Success
Improving NPS is essential for banks that want to build lasting relationships with customers and drive long-term success. By implementing strategies such as delivering exceptional customer service, personalizing the customer experience, enhancing digital services, listening to feedback, building trust, and engaging in community initiatives, you can increase customer loyalty and create advocates for your brand. Not only will your NPS improve, but customer retention and revenue growth will predictably follow.
Ready to take your bank or credit union’s NPS to the next level? The sooner you begin, the sooner you’ll see results! Let’s start your path to World-Class NPS today.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.
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Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.