Phoenix Synergistics Defining Customer Loyalty in Financial Services: Key Drivers

Sept 2017 | Relationship Retention and Enhancement | High-Touch and High-Tech Channels | Customer Service, Rewards, and Communication

Following the great recession and financial crisis, many financial institutions (FIs) suffered an erosion of consumer trust and loyalty. With the recovery, FIs have been working to re-establish consumer trust, which is essential to customer loyalty. But what is at the heart of customer loyalty – customer service, rewards, communication programs, channels, or inertia? Some industry experts feel that channels, particularly online and mobile options, create “stickiness” in customer relationships.

There is also the argument that high-touch elements engender greater customer loyalty and longevity. Branch location has typically been very important in account acquisition – but what role does this play in customer retention? Is exceptional customer service seen as a value-added feature or an expectation? Many providers offer reward programs to keep their customers using the institution’s products and services. How important are communication programs in instilling customer loyalty? What role does inertia play in loyalty?

Which of these various aspects is most important in driving customer loyalty and retention? How does a customer’s NPS score affect loyalty? Winning the loyalty of customers provides a lifetime of opportunities for cross-selling and broadening relationships. Understanding the drivers of consumer loyalty is essential in developing and implementing successful acquisition and retention strategies.


  • Profile consumers’ financial provider and service relationships. Determine the factors by which consumers consider a financial institution to be main or primary. Assess the breadth of account and service relationships with main or primary providers and the degree of relationship fragmentation.
  • Examine in more depth details of the main provider relationship – including number of years have had the relationship, channels used, reasons for maintaining the relationship, and first account opened. Measure overall satisfaction as well as ratings of main provider features and attributes.
  • Assess recent account opening behavior – type of account or service, time frame in which opened, main or other provider, reasons for provider selection. Evaluate the near-term market for accounts and services and the competitive position  of the main provider to capture these relationships.
  • Probe recent main provider switching behavior – extent and reasons for doing so. Assess the impact of branch closings. Gauge the potential for switching in the next year and reasons why.
  • Examine in detail aspects of customer loyalty – including the position of the main provider when considering new accounts and services, self-perception of loyalty to the main provider and other providers, reasons for this loyalty, and likelihood of recommending the main provider to family, friends or colleagues. Evaluate the impact of media reports and role of social media.
  • Evaluate the impact of experience with alternative financial providers on the environment for customer loyalty. Measure the potential for nonbank organizations as financial services providers.
  • Determine which consumer segments exhibit the strongest traits of customer loyalty – as well as those who do not – in terms of demographic, behavioral, or attitudinal identifiers.

Survey Topics

  • Current Environment
  • Main Provider Relationship
  • Loyalty Factors
  • Alternative Provider Relationships


National Internet Survey – The survey includes 1,500 online interviews with consumers age 18 or older.

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