Cornel Wisskirchen, Dirk Vater, Tim Wright, Philippe De Backer and Christine Detrick
To show that retail bank executives across the world are awakening to a realization that long‐term growth and profitability hinge on their ability to attract and retain loyal…
Abstract
Purpose
To show that retail bank executives across the world are awakening to a realization that long‐term growth and profitability hinge on their ability to attract and retain loyal customers.
Design/methodology/approach
In Bain's experience, the best tool for gauging the benefit of fostering customer advocacy is the “Net Promoter™ Score” (NPS), a measurement developed by Satmetrix Systems, a Silicon Valley‐based software and services firm that specializes in customer experience management.
Findings
US banks earn an average net promoter score of just 6 percent – far below those of leaders in the personal computer, property and casualty insurance and car rental industries. The NPS of German retail banks is just 13 percent, on average; meanwhile UK banks rate a dismal minus 6 percent.
Research limitations/implications
A recent global benchmarking study by Bain & Company reveals that bankers recognize they have a problem. In the study, bankers rated the building of strong customer relationships as one of their most important keys to success. Yet they acknowledged that they were not doing a good job of rising to that challenge.
Practical implications
The Bain study found that banks acknowledged six imperatives as crucial to winning over new customers, deepening relationships with existing account holders and reinforcing all customers' perception that they receive superior value:
Originality/value
Strategic managers in banking and other industries must manage to six imperatives: design products and services that offer a truly captivating value proposition and generate genuine consumer enthusiasm; understand their target customer segments in detail and communicate with laser like precision; systematic nurture of new‐customer relationships; manage the customer experience, not just the account; dare to be different; and concentrate on measurements that enable anticipation of customer behavior.
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Nick Palmer, Scott Tanner, Christine Detrick and Ingo Wagner
The purpose of this article is to identify what truly propels property and casualty insurance industry leaders to reach their peak performance.
Abstract
Purpose
The purpose of this article is to identify what truly propels property and casualty insurance industry leaders to reach their peak performance.
Design/methodology/approach
Selection: from an initial list of 706 insurers worldwide, the authors screened for publicly held companies that derived at least 60 percent of their annual revenues from sales of property and casualty products and for which at least five years of detailed financial data were available. The final sample included only companies from advanced economies of North America, Europe and Australia, for a total of 86 insurers. Variables: the regression analysis investigated possible correlations between total shareholder returns and 17 measures of business mix and financial performance, including total revenue growth, total net premium growth and profitability growth. Time period: The authors ran tests on data covering the decade from 1994 through the end of 2004.
Findings
Consistent, sustainable revenue growth is the surest path to superior shareholder returns.
Practical implications
What sets the top performers in the insurance industry apart is an ability to master two of today's thorniest growth challenges: (1) high‐performance insurers cultivate organic growth by identifying their most valuable customers and investing to increase sales to them; by recruiting new clients through referrals and by lifting retention rates; (2) insurers that rely on mergers and acquisitions to boost revenues make regular, modest‐sized deals to add real value, and they integrate their new acquisitions quickly and seamlessly.
Originality/value
Property and casualty insurers that achieve top‐quartile revenue growth and produce exceptional returns for shareholders weave organic growth and acquisitions into a virtuous cycle of revenue expansion, pursuing deals that reinforce their ability to deliver customer value.
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Reviews the latest management developments across the globe and pinpoints practical implications from cutting‐edge research and case studies.
Abstract
Purpose
Reviews the latest management developments across the globe and pinpoints practical implications from cutting‐edge research and case studies.
Design/methodology/approach
This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.
Findings
Retail bank executives across the world are awakening to a realization that is obvious to managers in just about any other industry: Long‐term growth and profitability hinge on their ability to attract and retain loyal customers.
Practical implications
Provides strategic insights and practical thinking that have influenced some of the world's leading organizations.
Originality/value
The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to‐digest format.