Net Promoter Score Of Indian Banks: Numr Research Study Shows HDFC Bank Tops The List With 36% Preferring It
Net promoter Score (or NPS in short) is widely used by companies to measure customer loyalty and customer satisfaction. It has been proven to be an accurate predictor of sales, growth and profitability.
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Numr, a market research organisation recently conducted an NPS survey amongst people belonging to metros and NCCS A1, for Indian Banks. Out of all the banks, the majority 36% respondents reported HDFC as their Primary Bank. It was closely followed by State Bank of India (SBI) with 33%. ICICI and Axis Bank covered the third and fourth place with 26% and 22% respondents respectively.
Kotak Mahindra and HDFC had the highest NPS, measuring 68 and 67. A quick study of the annual financial reports for the year 2018 of both these banks reveals the compound growth rate to be 13% and 16% respectively. The growth rate remarkably mirrors the Net Promoter Score.
Given below is a graph showcasing NPS against the Growth Rate of various Indian Banks. It can be clearly surmised that the higher the NPS, the higher the Growth rate.
In the Banking and Financial Sector, customer experience often ends up being constrained to the background. The NPS system does not merely deduce customer loyalty. It also provides companies with actionable data that can be used to increase the level of loyalty and decrease customer churn. It sometimes an overlooked but vastly important metric.
A few months ago, Forbes came out with its first ever ranking of the World’s Best Banks. The report took a customer-centric approach, measuring general satisfaction and 5 other key attributes (namely trust, terms & conditions, customer services, digital services and financial advice) instead of Balance sheets and Profit and Loss statements.
In India, HDFC was ranked the first, followed by ICICI at the 2nd place. Kotak Mahindra ranked 4th and Axis ranked 10th. SBI did not even feature in the top 10, coming at 11th place while Bank of Baroda came 16th. This ranking can easily been seen echoed in their respective NPS and Growth rates.
According to Numr’s survey report, Canara bank had the lowest NPS (37) out of all banks surveyed. It is also ranked 30th on the Forbes’ Report. A reflection of both these metrics can be seen on its growth rate as well.
Clearly, Net Promoter Score has a direct influence on financial outcomes. Customers are the backbone of any business. As evidenced, customer satisfaction and loyalty can make or break any organisation and therefore, must be always taken into account when making important decisions.