“Net Promoter Score might change the marketing landscape for financial services”

According to Business Recorder, online orders in Lahore and Karachi increased up to 70% in the start of April 2020. Due to this quarantine period, online business is predicted to speed up in Pakistan. Pakistan Standard Chartered Bank (SCB) recently published a “sustainability review” report, which clearly mentioned that NPS (Net Promoter Score) played a huge role in tapping new customers into using their financial services along with keeping “customer retention” score to maximum. This task was certainly not easy, given the fact that several new banks are emerging within a matter of few months at every corner of street. It is a complicated task to market your services, take risk and also score LTV (Life Time Value) of existing customers.

Back in 1800’s, financial service providers had monopoly in their regions. Thus, there wasn’t much need for simple, cost friendly and innovative consumer surveys. Population level was low and so was advancement in technology. Now, in 21^st century companies all around the globe use NPS as a simple layout questionnaire. The main principal behind using NPS is cost and time saving, plus it is easy to interpret both by producer and at consumer end. It asks customers to score from 1 to 10, how likely they would like to recommend your services. In this case, 1 is not recommended at all and 10 is highly recommended. NPS scale identifies 8-10 as promoters and 1-5 as detractors while 6-7 are known as passive customers or people who are unsure.

So, we minus number of detractors from promoters (ignoring the passive customers) and that’s how we get our NPS score. Via this method, a company is able to statistically drive result about the likely detractors; resolve their issues and also make sure their promoters are highly likely to recommend product/service to their close friends and family members.

Companies using NPS (Net Promoter Score)

Financial service providers all around the globe are finding it quite lucrative to use NPS as a marketing tool for both inside customers (employees) and outside customers. It is not just banks who are availing this method to outreach their destined horizons but also insurance companies, micro finance loan providers, money transfer companies, security companies and investor services. Some prominent examples are; Jubilee Life Insurance, Western Union, Pay Pal, Zurich Insurance, American Express etc.

The service providers use NPS to target both B2B (business to business) and B2C (Business to consumer) marketing to fill the void identified in niche gap. Financial service providers achieve their goal(s) by embracing technological innovation and advancement taking place in this 21^stcentury. It uses mobile phone apps to reach their customers and developing pop-up surveys (NPS) instead of filling out paper work, sending and collecting via post office. It is also a reality that beside several kinds of marketing techniques, NPS plays a beneficial role in providing baseline data in order to target specific issues in marketing. Merely achieving “customer retention” does not guarantee “recommendation” and “high loyalty”.

Small banks could provide that by targeting emotional soft spots as identified by Industrial Psychologists. One such example is adopted by advertisement of Jubilee Insurance; it created advertisement to increase insurance buyers by targeting important issue of dowry in Pakistan. Another such example is provided by Habib Bank Limited (HBL), Pakistan by igniting the spirit of “achieving your dreams” and for that, you have to take loans. PayPal is another company providing MasterCard and other international services. It also urge existing customers a 25 $ benefit if they recommend their service to new customers.

Several marketing techniques based on NPS rating are employed by these financial institutions. Weather it’s for purpose of car loan, student loan, property buying or selling stocks on stock exchange. Service providers find it at their ease to develop policy in order to target these three main kinds of score and to continue selling their desired service or innovate a new one.

Three kinds of NPS(Net Promoter Scores) are

• Relationship

  It helps in identifying the relationship of existing users with your company.

• Competitive Benchmark

  It helps in identifying strengths and weakness of competitors in market by sending simple but anonymous surveys to the general population (not just your brand)

• Experience

  It helps to continuously ask existing consumers about their experience with usage of product over a week, month or year.

These kinds of marketing campaigns used by financial service providers, give companies an edge over those who are less likely to use NPS.

 

by: Noor ul Ain 

Tags: NPS Change The Marketing Landscape

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