Is Sentiment Analysis the New Customer Insights Gold Mine in Banking? Part I

A common question asked by banking executives in the highly competitive commercial banking marketplace is, “Are we doing a good job serving our customers?”  This can be analyzed in two ways: “Are we doing better or worse than before?”  In other words, how do we stack up in comparison to our past customer experience and service?  Alternatively, “Are we doing a better job than our competitors?” Or, how do we stack up in comparison to our direct competition?

Either way, this is an extremely important question. Recent research done by NewVoiceMedia shows that poor customer experience and service is costing American businesses $41 billion a year. While a recent report by Forrester states that  improving customer experience in the banking industry alone can have a positive annual impact of $237 million. So what is the solution?  How can you truly find out what your customers think about their customer experience with your institution? And how can you use this data to improve their experience?

The best approach is to begin by gauging your current level of service.

Many banks are using traditional methods to get a baseline service level. These techniques can be subject to bias. Here are some approaches that banks have been utilizing to attempt to gauge service levels.

  • The banker asks the customer directly.  These are informal discussions that can be subject to interpretation. Of course, the service provider does not want to get a bad review so the question may be asked differently to elicit a positive response.
  • A survey is distributed to customers. This gives you less bias when collecting results and more structure in terms of questions. These efforts are challenging because of low yield and it is possible to ask about things that are not important to the customer.
  • A focus group is used to explore the drivers of customer experience. Focus groups are valuable as you can dig into potential problem areas and get color around experiences. However, they can be expensive and are deliver relatively unique responses based on the facilitator’s approach.

So, how can you use new technology to more accurately get a read on your customers and develop your competitive advantage?  The answer is Sentiment Analysis or (SA) for short. SA is a revolutionary tool that can be used to gather customer insights to capture anything from customer experience to competitive intelligence.

SA leverages digital data to illustrate a better picture of how your bank is performing. Digital data includes data gathered from Facebook, Twitter or call centers. Banks have been embracing social media and SA is a way to use it even more effectively. There are approximately 7000 banks in the US.  Studies show that 75% of banks have Facebook pages. Are you getting any benefit from your presence on social media?

Sentiment analysis can be used to comb through digital data and determine what aspects of service are associated with negative or positive customer sentiment. Forrester Research considers sentiment analysis an important component of an effective Voice of Customer (VoC) program.  The technique comprises both art and science. The tool starts with a dictionary of terms relating to banking products and service channels. These terms are associated with customer attitude. The statistical technique then creates clusters or groups of positive and negative sentiment or inferential analysis which can help isolate probable root causes of service issues. The art is the flexibility to interpret comments and identify words or phrases that might have specific meaning based on how your bank is structured.

An important aspect of SA is the ability to finely tune the tool for a more beneficial output. New findings can be integrated into the tool for future analysis. Simply put, the same baseline can be analyzed for performance against model changes. This gives you the ability to compare service using the same yard stick and more clearly determine what the changes reveal.  Since the technique is easily repeatable, it can provide comparable views over time.

Stay tuned for our next installment where we will discuss utilizing Sentiment Analysis to your competitive advantage.

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Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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