Brief

How Banks Can Tease Out the Loyalty Metrics That Matter

Measuring performance on the key episodes for a bank’s customers allows the bank to focus on investments that will improve loyalty—and its economics.

著者：João Soares, Anna Krementz, and Maureen Burns

First published on 5月 02, 2025
min read


概要 Sustained organic growth depends on customer loyalty and advocacy, and the Net Promoter Score℠ (NPS®) accounts for 20% to 60% of variation in growth among competitors across industries. In US banking, NPS leaders significantly outperform in revenue growth, financial performance, and investor response, but relative positions can change quickly. Each bank must prioritize which specific customer interactions—such as fund transfers or account openings—matter most for loyalty among its customer base. Banks can leverage NPS data to assess competitors and market leaders, identifying gaps in service and therefore a focus for investment. It’s a truism that sustained business success hinges on organic growth. In turn, the roots of organic growth flourish on customers’ loyalty and advocacy. And the key metric to track loyalty, Net Promoter Score℠ (NPS®), explains roughly 20% to 60% of the variation in organic growth rates among competitors in most industries. On average, Bain & Company research shows, an industry's NPS leader outgrew its competitors by a factor greater than two times. In US banking, NPS leaders in loyalty also have tended to outperform laggards in net interest income growth and investor response. The gaps between leaders and laggards are wide, recently ranging from 65 to 15 (on a scale of −100 to 100). But these relative positions can change, sometimes quickly, through deliberate action or passive neglect (see Figure 1). Figure 1 Customer loyalty positions can change through actions or neglect Sources: NPS Prism®; S&P Capital IQ A bank that aims to improve loyalty could not feasibly change every aspect of its operations, nor would it want to. Steady improvement involves identifying which episodes within the customer experience matter most to that bank’s customers as well as how the bank performs on those critical episodes. Armed with that knowledge, the bank can more effectively direct its resources. Deaveraging the customer experience reveals the most useful information. To illustrate, let’s look first at US banking overall, where NPS Prism® data shows that the episodes “send money or transfer funds” or “open an account” create promoters but that the former episode is far more frequent than the latter. Moments of truth—which have the potential to create promoters or detractors—matter, too, though again the frequency of an episode should help determine where to invest (see Figure 2). Figure 2 On average in US banking, the “send money or transfer funds” episode creates promoters Source: NPS Prism® When we look at individual banks, the pictures can vary substantially. One regional bank, for example, does not create promoters with its “send money or transfer funds” episode; it actually creates a large number of detractors (see Figure 3). In addition, it creates detractors with the “manage account information or preferences” episode. This analysis starts to help the bank understand where to focus its efforts. Figure 3 For one US regional bank, however, the “send money or transfer funds” episode actually creates detractors Source: NPS Prism® A second type of analysis, focused on key competitors in the local market, can help a bank further zoom in on where it needs to invest resources. Although many clients will have two or three accounts, they talk to friends and family, especially at critical junctures or when they’re upset. That’s why a bank should gather NPS data for relevant episodes on its competitors and the market leader. One bank discovered that it lagged substantially on key frequent episodes “pay a bill” and “review transactions” (see Figure 4). It then took steps to reduce the gap to leaders in less than three years, raising its overall relationship NPS by 9 percentage points and overtaking one of its competitors. Figure 4 BankCo lags in many dimensions—most importantly, in frequent episodes such as reviewing transactions or paying a bill Source: NPS Prism® From resolving disputes to executing transactions, banks need to know what their customers care about the most, how they compare with competitors, and how they should act on the information. Benchmark metrics such as NPS Prism provide reliable data that banks can use to improve their performance on the moments that matter—and ultimately improve their economics as well. Being deliberate about collecting, analyzing, and acting on NPS Prism data will nurture customers’ loyalty in ways that will sustain growth for years to come. NPS Prism® Our cloud-based customer experience benchmarking service provides actionable insights and analysis that guide your creation of game-changing customer experiences.

概要

Sustained organic growth depends on customer loyalty and advocacy, and the Net Promoter Score℠ (NPS®) accounts for 20% to 60% of variation in growth among competitors across industries.
In US banking, NPS leaders significantly outperform in revenue growth, financial performance, and investor response, but relative positions can change quickly.
Each bank must prioritize which specific customer interactions—such as fund transfers or account openings—matter most for loyalty among its customer base.
Banks can leverage NPS data to assess competitors and market leaders, identifying gaps in service and therefore a focus for investment.

It’s a truism that sustained business success hinges on organic growth. In turn, the roots of organic growth flourish on customers’ loyalty and advocacy. And the key metric to track loyalty, Net Promoter Score℠ (NPS®), explains roughly 20% to 60% of the variation in organic growth rates among competitors in most industries. On average, Bain & Company research shows, an industry's NPS leader outgrew its competitors by a factor greater than two times.

In US banking, NPS leaders in loyalty also have tended to outperform laggards in net interest income growth and investor response. The gaps between leaders and laggards are wide, recently ranging from 65 to 15 (on a scale of −100 to 100). But these relative positions can change, sometimes quickly, through deliberate action or passive neglect (see Figure 1).

visualization — Customer loyalty positions can change through actions or neglect

A bank that aims to improve loyalty could not feasibly change every aspect of its operations, nor would it want to. Steady improvement involves identifying which episodes within the customer experience matter most to that bank’s customers as well as how the bank performs on those critical episodes. Armed with that knowledge, the bank can more effectively direct its resources.

Deaveraging the customer experience reveals the most useful information. To illustrate, let’s look first at US banking overall, where NPS Prism® data shows that the episodes “send money or transfer funds” or “open an account” create promoters but that the former episode is far more frequent than the latter. Moments of truth—which have the potential to create promoters or detractors—matter, too, though again the frequency of an episode should help determine where to invest (see Figure 2).

When we look at individual banks, the pictures can vary substantially. One regional bank, for example, does not create promoters with its “send money or transfer funds” episode; it actually creates a large number of detractors (see Figure 3). In addition, it creates detractors with the “manage account information or preferences” episode. This analysis starts to help the bank understand where to focus its efforts.

A second type of analysis, focused on key competitors in the local market, can help a bank further zoom in on where it needs to invest resources. Although many clients will have two or three accounts, they talk to friends and family, especially at critical junctures or when they’re upset. That’s why a bank should gather NPS data for relevant episodes on its competitors and the market leader. One bank discovered that it lagged substantially on key frequent episodes “pay a bill” and “review transactions” (see Figure 4). It then took steps to reduce the gap to leaders in less than three years, raising its overall relationship NPS by 9 percentage points and overtaking one of its competitors.

From resolving disputes to executing transactions, banks need to know what their customers care about the most, how they compare with competitors, and how they should act on the information. Benchmark metrics such as NPS Prism provide reliable data that banks can use to improve their performance on the moments that matter—and ultimately improve their economics as well. Being deliberate about collecting, analyzing, and acting on NPS Prism data will nurture customers’ loyalty in ways that will sustain growth for years to come.

NPS Prism®

Our cloud-based customer experience benchmarking service provides actionable insights and analysis that guide your creation of game-changing customer experiences.