In July 2006, East & Partners launched its Business Banking Index, a survey of business customer behaviour towards their banks, comprising interviews Australia-wide with a structured sample of 1,025 companies across four segments, some 6,150 direct interviews with business banking customers annually. The Index provides a monitor of several key drivers of customer engagement behaviour with their banks including advocacy, detraction, empathy, satisfaction, loyalty and mind share. In addition the Index monitors frequency of contact between bank and customer, the initiator of such contact, share of customer mind held by specific banks and business customer recall of bank advertising.

Customer satisfaction surveys are regularly referenced in the financial media but these typically only address the retail banking markets and of course represent only a part of the engagement motivation for customers with their banks. Business banking accounts for roughly a third of commercial banks' assets but business customers deliver far greater earnings than retail customers with margins at almost three times those in the retail markets. Banks are spending many millions of dollars on advertising and marketing campaigns, refreshing their product and service propositions, and restructuring and re-engineering internally, all with a view of targeting and winning business customers, at the same time as vigorously protecting their existing customer base from competitors.

East's Business Banking Index is delivering an ongoing, detailed monitor of how successful banks are being at achieving these aims, and to what extent their initiatives and services are connecting with business banking customers and encouraging them to buy more service from their bankers. Accelerating customer churn across the business banking markets indicates that business customers are no longer beset by inertia and are prepared to switch provider. Unhappy customers are quickly becoming ex-customers in these hyper competitive market conditions.


Important Enhancements

In line with East research findings released in several advisory and research notes to clients, significant attention is devoted to measuring customer advocacy of business banks, both intentional and actual. Customer satisfaction measures have become increasingly disconnected from customer engagement and buying behaviour and no longer have actionable predictive power of future changes in output measures such as market share, share of customer wallet and cross sell performance. Advocacy has become a more valuable view of likely customer engagement with their banks, especially in combination with other existing East measures of customer-bank empathy, bank loyalty experiences, contact frequency, proactiveness of bank engagement, mind share and advertising recognition.


Predictive Power

The BBI has proven clear predictive correlations based on customer engagement behaviour and intentions with key bank performance outcomes both in aggregate and by individual bank. BBI?s leading predictors are strongly connected with measures such as market share, customer retention, wallet share, product cross-sell and bank margins.


Index Methodology

Each month East & Partners conducts telephone interviews with a structured and representative sample of +/- 800 businesses nationally, comprising:

 Report Overview  |  Released: Bi-Monthly