2008 KPMG Nigeria Banking Industry Customer Satisfaction Survey

2008
Banking
Industry
Recognising Nigeria’s Foremost Customer-Focused Banks March 2008
02

Foreword 3
Scope and Methodology 4
Rethinking Service 6
The Customer Verdict 10
Conclusion 15
Banking Survey
Contents
The views and opinions expressed in Section 4 of this survey report are those of the survey respondents and do not necessarily
represent the views and opinions of KPMG Professional Services. Unless otherwise stated in this publication, we have not sought to
establish the reliability of the information obtained from sources outside of KPMG. We therefore cannot provide any assurances or
guarantees that the survey findings represent an accurate view of the banking industry.There may be material differences between the
findings of the survey and the actual state of the industry. No one should act upon the survey results or other information contained in
this publication without appropriate professional advice after a thorough examination of the particular situation.
KPMG accepts no liability or responsibility from the reliance of any party on the contents of this publication.
KPMG Professional Services, a partnership registered in Nigeria, is a member of KPMG International, a Swiss cooperative.
© 2008. All rights reserved. Designed & printed in Nigeria by the Marketing, Knowledge & Communications unit.

Foreword
1
© 2008 KPMG Professional Services. All rights reserved
I welcome you to the 2008 edition of the KPMG Nigerian Banking Industry
Customer Satisfaction Survey.
Between last year and now, most banks have aggressively sought to gain
scale, scope and market share. According toThe Banker (December 2007), 19
Nigerian banks rank among the first 30 in the Top 100 Sub-Saharan African
Banks.
The race to maximise market share and, ultimately shareholder value, has
intensified as the industry becomes more competitive. In the quest to
achieve the pole position in the market place and profitability, Nigerian banks
are realising that satisfied and loyal customers have a crucial role to play.
This year, the survey has been expanded to achieve a more national coverage
and to incorporate feedback from the retail segment; in addition to the
corporate customers on which the 2007 edition was focused.
The survey canvassed the opinions of about 5,000 individuals and 260
businesses on the quality of service delivery by Nigerian banks. This report
highlights the key findings of the survey, identifying the important customer
satisfaction and loyalty considerations for Nigerian banks.This year, service
quality displaced financial stability as the most important factor in the
choice of a bank by Nigerian customers.
According to Peter Drucker,“Quality in a service…is not what you put into it.
It is what the client or customer gets out of it.
” We hope this initiative will
continue to spur Nigerian banks on the journey towards service excellence.
Adebisi Lamikanra
Partner and Head, Business Advisory Services
Page three Banking Survey Issue 2

The 2008 Banking Industry Customer Satisfaction Survey (BICSS) continues to
focus on assessing the performance of the Nigerian banks in providing value
and satisfying their customers.
The scope of this edition of the survey has been expanded to include both the retail
and corporate banking customer segments.The survey solicited the opinions of about
5,000 and 260 retail and corporate respondents respectively over a period of seven (7)
weeks in January and February 2008.
2 Scope and
Methodology
Figure 1 - Analysis of Retail Respondents by Category
Other
8%
Civil/Public
Servant
20%
Professional
22%
Student
22%
Self-Employed
28%
Figure 3 - Analysis of Corporate Respondents by Industry
28
15
17
20
21
21
26
46
47
5 15 25 35 45 55
1
Others
Embassy/Multilateral Organisations/NGOs
Media & Publishing
Real Estate & Construction
Logistics & Automobiles
Conglomerate
Food, Beverages &Tobacco
ICT & T
elecoms
Airlines & Hospitality
Manufacturing
Oil & Gas
Rating Frequency
1
Others include companies engaged in Agriculture (5), Engineering Services (7), Healthcare (6),
Packaging (3), Security Services (2), Professional Services (2), Retailing (1), Leasing (1), andTextile (1)
Banking Survey Issue 2 Page two
Figure 2 - Analysis of Corporate Respondents byTurnover
Page four
Less than
N200m
17%
N200m-N1b
31%
N1b-N5b
20%
N5b-N10b
20%
Greater than
N10b
12%
8
13

The survey was conducted in eight (8) locations across the country: Aba, Abuja, Calabar, Ibadan, Kano, Kaduna, Lagos and
Port Harcourt. Retail customers were randomly selected in each location, while corporate customers were sampled from the
2007/08 edition of the Top 500 Companies in Nigeria (GoldStar Publications).
A deliberate attempt was made to ensure that the corporate respondents included the biggest companies in each sector of the
Nigerian economy. Feedback was received through interviews with each organisation's Chief Finance Officer (CFO), Financial
Director (FD),Treasurer or other personnel playing a major role in the banking relationship interface.
Figure 4 - Analysis of Retail Respondents by Location Figure 5 - Analysis of Retail Respondents by Age
21-40
78%
41-50
13%
Above 50
5%
Under 20
4%
The methodology used in the calculation of the customer satisfaction index for all the 24 Nigerian banks is as illustrated below.
Figure 6 - Methodology for Calculating Customer Satisfaction Index (CSI)
Page five Banking Survey Issue 2
Overall Score CSI
Perceived Value
Ratings -
Satisfaction (S)
& Importance (I)
S I (S x I)/ I
Customer Service Factors
Customer Care
Measures interaction of bank staff
with customers
Product/Service Offering
Measures product range &
appropriateness to customers’ needs
Transaction Methods & Systems
Measures customer support processes/
systems & turnaround time
Convenience
Measures accessibility & quality of service
from delivery channels
Pricing
Measures fees, charges and rates on product
Weighted
Score
Abuja
9%
Kaduna
8%
Kano
8%
Calabar
8%
Ibadan
8%
Aba
8%
Lagos
44%
Port-Harcourt
7%

Rethinking Service:
From Customer Satisfaction
to Customer Loyalty
Moving customers from the
satisfaction zone to the loyalty zone
Organisations that not only satisfy their
customers, but also consistently exceed
their expectations, reap the loyalty
dividend. Loyalty is the result, while
satisfaction is the means.
Nigerian banks must engender
customer loyalty to gain a greater share
of the customer's wallet, pursuing the
same objectives as other successful
organisations around the world.The
greater loyalty an organisation inspires
among its customers, the greater its
profit potential. Recent research by Bain
& Company reveals that companies that
put customer loyalty at the centre of
their business model experienced
growth that came from increased
purchases over time, willingness to pay
premiums for additional service, and
1
referrals .
Customer loyalty embraces a range of
customer attitudes and behaviours.
When we identify with someone or
something, one of the ways we
reinforce the credibility of our beliefs is
by forming loyalties to them. So we give
them repeat business and tell our
friends about them. If a company
serves its customers well and
consistently exceeds their expectations,
then some natural loyalty will result.
The organisation must start with the
One thing is clearly not in doubt: Nigerian banks have
begun to recognise the bottom-line advantage of
deepening their customer focus. Exceptional service
delivery has now been identified as a potentially effective
means to gain strategic advantage in the highly
competitive financial services industry, where banks not
only compete with one another, but also with other
financial institutions.
Banks can no longer compete only on size or product
superiority. Quality service delivery has become a new
battleground.The goal is to satisfy the customer by
providing superior service. However, is customer
satisfaction a guarantee of customer loyalty? Evidently not.
Banks remain vulnerable when competitors provide better
service, even if slight, especially where there exists
minimal switching barriers. Hence, customers continue to
purchase products from banks other than their primary
bank. While the service may satisfy them at one bank,
they are still not satisfied enough for them to remain
totally committed to that bank.
1
The Real Meaning of Loyalty- the Key to Growth,Frederick F Reichheld and Philip J. Deane,
Customer Management (Vol. 12 Issue 1)
2
The Three“Ds” of Customer Experience, James Allen, Frederick F
. Reichheld and Barney
Hamilton, Harvard Management Update
3
The Branded Customer Experience, Richard Gonzalez, AMICUS Group Whitepapers No. 5
belief that the customer is its most
valuable asset and that the organisation
will do everything in its power to forge
an emotional bond with the customer.
According to Bain & Company, the
leaders of a few organisations, identified
by customers as providing superior
customer experience, pursue three
imperatives (theThree “Ds” of
Customer Experience) simultaneously in
2
delighting their customers :
Ž Design of offers and experiences for
the right customers;
Ž Delivery by focusing the entire
organisation on these propositions,
with an emphasis on cross functional
collaboration; and
Ž Developing organisational capabilities
to please customers again and again.
Customers are much more likely to
become and remain loyal if they identify
with an organisation's brand, if they
have positive experiences every time
they come into contact with it, and if
they build positive relationships with
those who represent that brand.
A few organisations have been able to
create genuine interest, excitement and
loyalty in the marketplace. Power brands
such as Southwest Airlines, Starbucks
and Harley-Davidson have continued to
deliver visionary and well conceived
customer “experiences”
. They have
reinvented otherwise intangible,
commodity products and services. They
have mastered the art of imaging,
packaging and merchandising
3
themselves as experiences .
The total customer experience
Page six
Banking Survey Issue 2

Harley-Davidson manages for
customer experience and value
Focusing the entire organisation on
the value proposition
Harley-Davidson is an outstanding
example of a company that has created
loyalty through a pattern of steadfast
interactions with its customers. The
company created a platform built around
its focus on relationships and has
repeatedly asked the question “How do
we create more value for our customers
so that they willingly buy more of our
products and services?”
The company identified the needs of
the typical Harley customer: Harley
owners don't just want transportation to
get from one place to another.They
want a riding experience which,
according to Harley-Davidson, is the
sum total of the Harley `Look,' 'Sound'
and 'Feel'. Harley-Davidson went from
supplying motorcycles to
one of the
most creative and innovative strategies
that has helped create the experience
of this product. The company started to
organize rallies to strengthen the
relationship between its members,
dealers, and employees, while also
promoting the Harley experience to
potential customers. The H.O.G.
became immensely popular and is the
largest factory-sponsored motorcycle
organization in the world, with
membership upwards of one million and
more than 1,400 chapters worldwide as
4
at 2007 .
Branding the experience, not just the
product, has allowed the company to
expand how it captures value, including
a line of clothing, a parts and
accessories business, and Harley-
Davidson Visa card. By 2004, the
company had delivered 20 consecutive
years of record earnings and revenues
and sold more bikes in this period than
5
at any other time in its history . Studies
have also shown that about 75 percent
of Harley customers make repeat
purchases.
The company that seeks customer
loyalty must establish a highly
integrated business model that
combines a superior product or service
selling a
lifestyle.
The company created a community that
valued the experience of riding a Harley
more than the product itself.The
sponsorship of a "Harley Owners'
Group" (H.O.G.) has been
4
www.harley-davidson.com
5
Customer Experience Management Plus: Harley-Davidson, Shaun Smith, www.customerthink.com
6,8
The Luxury T
ouch, Robert Reppa and Evan Hirch, Booz Allen Hamilton
7
The Malcolm Baldridge National Quality Awards is a United States government-sponsored citation
for rigorous attention to quality
with outstanding sales and service quality, driving strong growth and profitability in
the process.
The entire organisation must be fully geared to deliver on the promised customer
experience. Employees must be equipped with the knowledge, skills and tools
needed to deliver the customer experience and then reinforce this through their
personal actions.
Four key principles have been observed to be common to customer-centric
6
organisations focused on delivering the total customer experience :
Ž They create a customer-centred culture that identifies, nurtures, and
reinforces service as a primary value;
Ž They use a rigorous selection process to populate the organisation with superior
sales and support staff;
Ž They constantly retrain employees to perpetuate organisational values and to
help them attain greater mastery of products and procedures; and
Ž They systematically measure and reward customer-centric behaviour and
excellence in sales and service to enforce high standards and reinforce
expectations.
The Ritz-Carlton Hotel Company provides an excellent example of the execution of
these principles. The company manages about 70 luxury hotels worldwide and
competes against nearly 10 hotel groups in the “luxury” and “upscale, deluxe”
categories in the industry.The hotel has received the top rankings for its
unsurpassed level of service from J.D. Power and Associates, as well as two
7
Malcolm Baldridge National Quality Awards .
The Ritz-Carlton strategy is to achieve 100 percent customer loyalty. In its
operations, the company set the target of “defect-free” experiences for guests,
implementing a measurement system to chart progress toward elimination of all
customer problems, no matter how minor.
Page seven Banking Survey Issue 2

Hire right, and invest in employees
The Ritz-Carlton guarantees service that goes the extra mile because they have
programmed the organisation to foster customer-centred behaviour in its 32,000
employees worldwide, at all levels. Ritz-Carlton uses a rigorous process in selecting
its employees. A profile is created for each job, and only people who match the
profile are hired using scientific, behaviour-based assessment tools.
8
Recent research show that, “[Ritz-Carlton] employees are constantly schooled in
company lore and values spelled out in a credo that the company calls its 'Gold
Standards', printed out on a card that employees carry at all times…They are the
basis for all employee training and reward programs, and they are discussed in daily
'lineups' - 15-minute sessions at the start of each employee shift during which
managers reinforce company values and review service techniques”
.
The average Ritz-Carlton employee receives about 232 hours of training per year,
almost four times the average of their counterparts at peer hospitality companies.
The training covers new products and sales procedures as well as constant
reinforcement of the company values and heritage.
The Ritz-Carlton has also established elaborate procedures to measure customer
and employee satisfaction, and rewards high-performing staff with extra recognition
and superior compensation.
Flawless execution: It's all in the detail
At every level,The Ritz-Carlton is detail-oriented. Steps for all quality-improvement
and problem-solving procedures are documented, methods of data collection and
analysis are reviewed by third-party experts, and standards are established for all
processes.
Key processes are also dissected to identify points at which errors may occur. For
example, to meet its goal of total elimination of problems in the 1990s,The Ritz-
Carlton determined there were 970 potential instances for a problem to arise during
interactions with overnight guests and 1,071 such instances during interactions
with meeting event planners.
The Ritz-Carlton has instituted an approach of“customer customization,
” which
relies on extensive data gathering and capitalises on the capabilities of advanced
information technology, to cultivate customer loyalty. Information gathered during
various types of customer contacts, such as responses to service requests by
overnight guests or post-event reviews conducted with meeting planners, are
systematically entered into a database. Accessible to all Ritz-Carlton hotels
worldwide, the database enables hotel staff to anticipate needs of returning guests
and to initiate steps that will help to ensure a high-quality experience.
“Are you allocating resources where you want to be investing in
9
relationships?”
Investment in product-oriented programmes that result in mere satisfaction, such
as those that reward customers for using a particular product or service or
maintaining a minimum amount in deposit, are like “straightening chairs on the
Titanic”
. The focus is on products and not on relationships.
As competition reaches new heights in the Nigerian banking industry, it is
becoming easier for the average customer to jump ship as the products on offer are
now highly substitutable.The merely satisfied customer is unlikely to stick around
when the image of his/ her interaction with the bank is elusive or vague.The
challenge for banks is to rise above merely satisfying the customer and establish a
consistent, repeatable process to start delighting them.
What is the difference between customer satisfaction and loyalty? It is largely on
the emotional level. In order to create true differentiation and gain loyalty, the
customer-centric bank needs to engage the mind and the heart of its customer. The
customer must be able to 'connect' with the unique experience of interacting with
the brand and build a relationship with those that represent the brand. Loyalty
stems from relationship. The whole organisation must be focused on delivering on
this promise.
Page eight
9
The Definitive Drucker, Elizabeth Haas Edersheim
“Quality is never an accident; it
is always the result of high
intension, sincere effort,
intelligent direction and skilful
execution; it represents the wise
choice of many alternatives”
- William A. Foster

In banking, meeting the customer challenge
depends on the relentless pursuit of innovation
across products, services and processes.
The key to customer loyalty and retention is
ultimately the delivery of quality service.
KPMG believes that the most successful banks
will be those that implement structured
innovation management around their service
delivery frameworks.
www.ng.kpmg.com
© 2008 KPMG Professional Services, the Nigerian member firm of KPMG Internationa, a Swiss Cooperative. All right reserved.

Which banks provide the most consistent, satisfying service experience to their
customers?This year, over 5,000 retail and corporate customers provided insight into
their general perception of service quality among Nigerian banks.
Please note that while all banks were rated during the survey, not all the banks were
ranked eventually, due to inadequate sample sizes generated.This was necessary to
avoid making inferences that were less likely to be representative of the actual
customer experience in such banks.
GTBank leads the way in Retail
GTBank came tops in the retail customer segment, with a CSI of 80.03. In second and
third positions were Zenith Bank and Intercontinental Bank, with CSI of 78.56 and
76.72 respectively.
The survey showed that while respondents expressed a generally good level of
satisfaction with the banks, there was minimal differentiation in ratings below the top
two positions.This represents an opportunity for banks in that band to break away by
seeking ways to further improve their existing service delivery frameworks and
providing a ground-breaking experience.
The
Customer
Verdict
4
GTBank is Nigeria's most
customer-focused retail bank
Figure 7 – Most Customer-Focused Banks by Location: Retail
First Inland Bank
Port Harcourt
GTBank
Lagos
Zenith Bank
Kano
FCMB
Kaduna
Zenith Bank
Ibadan
FCMB
Calabar
GTBank
Abuja
Diamond Bank
Aba
Bank
Location
First Inland Bank
Port Harcourt
GTBank
Lagos
Zenith Bank
Kano
FCMB
Kaduna
Zenith Bank
Ibadan
FCMB
Calabar
GTBank
Abuja
Diamond Bank
Aba
Bank
Location
Figure 8 - T
op T
en Customer Focused Banks: Retail
The
Customer
Verdict
Page ten
GTBank
Zenith Bank
Intercontinental Bank
Diamond Bank
Bank PHB
Access Bank
Oceanic Bank
ETB
Stanbic-IBTC Bank
FCMB
Customer Satisfaction Index (CSI)
74 76 78 80

Diamond Bank
Zenith Bank
GTBank
Transaction Methods &
Systems
Zenith Bank
GTBank
Convenience
Bank PHB
GTBank
Diamond Bank
Pricing
Diamond Bank
Bank PHB
ETB
Product/ Service Offering
Diamond Bank
Zenith Bank
GTBank
Customer Care
3
2
1
Ranking
Customer Service Factor
(Retail)
Diamond Bank
Zenith Bank
GTBank
Systems
Zenith Bank
GTBank
Convenience
Bank PHB
GTBank
Diamond Bank
Pricing
Diamond Bank
Bank PHB
ETB
Diamond Bank
Zenith Bank
GTBank
Customer Care
3
2
1
Ranking
(Retail)
Zenith Bank remains tops in Corporate
Zenith Bank held tenaciously to its position as the most customer-focused bank for the
corporate banking segment, with a CSI of 79.96. Following closely in the second
position was GTBank with a CSI of 79.43 and a new entry in the third position, Stanbic-
IBTC Bank with a CSI of 78.64.
Despite the fact that corporate banking customers generally expressed above
average satisfaction (about half of the banks obtained a rating of 75% and above),
corporate customers appeared slightly less enthused this year. It was observed
that there was a general drop in the satisfaction ratings among the top ten
customer-focused banks in this segment compared with last year's figures.
Figure 10 -TopTen Customer Focused Banks: Corporate
GTBank, Zenith Bank and Diamond Bank dominant across key retail customer
service areas
GTBank was ahead of the other banks, coming first in three (3) categories, with Zenith
Bank following closely behind. Diamond Bank, on the other hand, was first in one (1)
category and third in three (3) other categories.
Zenith Bank maintains
its top position as the
most customer-focused
bank for the corporate
segment
GTBank, Zenith Bank and
Diamond Bank dominate
the rankings in key
customer service
categories
Figure 9 - Ranking of Banks by Customer Service Factors: Retail
Page eleven
71 73 77 81
79
75
Zenith Bank
GTBank
Stanbic-IBTC Bank
Diamond Bank
Citibank
Fidelity Bank
Oceanic Bank
Skye Bank
First Bank

Customer satisfaction across business sectors remains good
Customer satisfaction scores across many of the sectors was above the overall
banking industry average for corporate customers (the median CSI for the banking
industry stood at 75.86).
The Airline and Hospitality industry expressed the most satisfaction with the quality of
service of Nigerian banks, while the ICT & Telecoms sector was the least satisfied.
Figure 12 - Customer Satisfaction Ratings by Industry
Banks performed above average
in satisfying their corporate
banking customers in the
various industries
Zenith Bank also stands out across key customer service areas in Corporate
Zenith Bank's corporate customers rated the bank best in two customer service areas
(transaction methods & systems and convenience), where the bank took the lead
position. In addition, the bank came second in two other categories (customer care
and product/service offerings).
Three other banks, GTBank, Diamond Bank and Afribank, took the first position in the
customer care, product/service offering and pricing categories respectively.
Figure 11 - Ranking of Banks by Customer Service Factors: Corporate
Diamond Bank
GTBank
Zenith Bank
Systems
Diamond Bank
GTBank
Zenith Bank
Convenience
Fidelity Bank
Stanbic-IBTC Bank
Afribank
Pricing
Citibank
Zenith Bank
Diamond Bank
Stanbic-IBTC Bank
Zenith Bank
GTBank
Customer Care
3
2
1
Ranking
(Corporate)
Diamond Bank
GTBank
Zenith Bank
Systems
Diamond Bank
GTBank
Zenith Bank
Convenience
Fidelity Bank
Stanbic-IBTC Bank
Afribank
Pricing
Citibank
Zenith Bank
Diamond Bank
Stanbic-IBTC Bank
Zenith Bank
GTBank
Customer Care
3
2
1
Ranking
(Corporate)
Banking Survey Issue 2 Page twelve
Airlines & Hospitality
Logistic & Automobiles
Manufacturing
Food, Beverages &Tobacco
Real Estate & Construction
Embassy/Multilaterals/NGOs
Conglomerate
Media & Publishing
Oil & Gas
ICT & T
elecoms
70 72 76 80
70
74
79.02
79.01
78.20
77.75
77.39
77.05
75.17
73.86
73.53
72.66

Figure 13 – Frequently Rated Banks by Location: Retail
Ranking
UBA
UBA
UBA
GTBank
GTBank
UBA
UBA
UBA
1
FirstBank
GTBank
GTBank
UBA
UBA
Oceanic Bank
GTBank
FirstBank
2
Ecobank
Port Harcourt
FirstBank
Lagos
Oceanic Bank
Kano
FirstBank
Kaduna
Skye Bank
Ibadan
Intercontinental
Bank
Calabar
Oceanic Bank
Abuja
Diamond Bank
Aba
3
Location
(Retail)
Ranking
UBA
UBA
UBA
GTBank
GTBank
UBA
UBA
UBA
1
FirstBank
GTBank
GTBank
UBA
UBA
Oceanic Bank
GTBank
FirstBank
2
Ecobank
Port Harcourt
FirstBank
Lagos
Oceanic Bank
Kano
FirstBank
Kaduna
Skye Bank
Ibadan
Intercontinental
Bank
Calabar
Oceanic Bank
Abuja
Diamond Bank
Aba
3
Location
(Retail)
Ratings per Bank
The survey was designed to ensure that all the 24 banks were covered across the
selected locations. The results reflected the extent to which each bank has
relatively implanted its footprint, especially within the retail segment. It is also
broadly indicative of the relative market share of the banks in both segments.
Figure 13 -TopTen Frequently Rated Banks: Corporate
Figure 15 -TopTen Frequently Rated Banks: Retail
Page thirteen
“Being on par in terms of price
and quality only gets you into
the game. Service wins the
game”
-Tony Alessandra
20 40 60 80 100 120 140
123
116
107
Zenith Bank
First Bank
GTBank
UBA
Diamond Bank
Citibank
Union Bank
Oceanic Bank
Access Bank
Rating Frequency
79
57
54
51
49
48
43
UBA
GTBank
First Bank
Oceanic Bank
Zenith Bank
Skye Bank
Union Bank
Diamond Bank
Ecobank
Rating Frequency
200 400 600 800 1000 1200
1,054
941
673
656
630
478
446
324
320
281

2
Adapted from Heskett, Jones, Loveman, Sasser, & Schlessinger
How loyal is the Nigerian banking customer?
This year, the survey was also designed to measure the loyalty levels of banking
customers. While customers have expressed above average satisfaction with
banking products and services, the results show that retail and corporate
customers are generally still in the so-called 'zone of indifference'.The 'zone of
indifference' represents customers who are yet to translate satisfaction into loyalty,
and are vulnerable to competitors who may provide more satisfying conditions.
The 'zone of indifference' presents a clear opportunity for Nigerian banks, as
relatively small improvements in the service encounter can intensify the
customer's satisfaction and move the 'at-risk' customer towards the 'zone of
affection'.
ZONE OF
INDIFFERENCE
ZONE OF
AFFECTION
ZONE OF DEFECTION
1 2 3 4 5
SATISFACTION
Definitely
Will Not
Sometimes
Will
Often Will
Definitely
Will
3.79
LOYALTY
(RETENTION)
Very
Dissatisfied
Dissatisfied Indifferent Satisfied
Very
Satisfied
ZONE OF
AFFECTION
ZONE OF DEFECTION
1 2 3 4 5
SATISFACTION
Definitely
Will Not
Sometimes
Will
Often Will
Definitely
Will
3.79
LOYALTY
(RETENTION)
Very
Dissatisfied
Very
Satisfied
ZONE OF
INDIFFERENCE
ZONE OF
AFFECTION
ZONE OF DEFECTION
1 2 3 4 5
SATISFACTION
Definitely
Will Not
Sometimes
Will
Often Will
Definitely
Will
3.67
LOYALTY
(RETENTION)
Very
Dissatisfied
Very
Satisfied
ZONE OF
INDIFFERENCE
ZONE OF
AFFECTION
ZONE OF DEFECTION
1 2 3 4 5
SATISFACTION
Definitely
Will Not
Sometimes
Will
Often Will
Definitely
Will
3.67
LOYALTY
(RETENTION)
Very
Dissatisfied
Very
Satisfied
2
Figure 17 - The Loyalty -Satisfaction Grid : Corporate
2
Figure 18 -The Loyalty -Satisfaction Grid : Retail
Starting a banking relationship:What
is the most important factor?
This year, service quality emerged as the
most important factor considered by
individuals and businesses in making a
decision regarding the choice of a bank.
Financial stability, which was the most
important factor last year, came in third
behind referrals.
This result is indicative of the increased
expectations of customers, who are
becoming generally more sophisticated
in their demands, rather than being
primarily concerned only about the safety
of their funds.
Figure 16 - Key Considerations in Selecting a Bank
The survey results show that
Nigerian banking customers fall
in the 'zone of indifference' -
they are yet to translate their
satisfaction into loyalty.
Banking Survey Issue 2 Page fourteen
Service Quality
Referral
Financial stability
Accessibility to delivery
channels
Image and reputation
Access to credit
Pricing of products
and services
29%
23%
17%
13%
12%
30%
3%
3%
20%
10%
0%
ZONE OF
INDIFFERENCE

It's in the service experience
The competitive environment is placing increasing demands on Nigerian banks.
Without a doubt, a highly differentiated customer experience is becoming a source
of competitive advantage as banks strive to maximise shareholder value. However,
driving customer satisfaction alone may not just be enough.To consistently achieve
the desired superior returns, banks must transform that satisfaction into ensuring
customer loyalty.This is the critical challenge for Nigerian banks.
From our findings, service quality has emerged as the most important factor that
influences the customer's choice of a bank. A key implication, validated by the
survey results, is that banks which satisfy and provide value to their customers are
more likely to move such customers into the 'zone of affection' (i.e. make them
loyal), if they exploit key areas of opportunity in service delivery.
Through the customers' eyes
For the corporate banking segment, the survey results this year is not necessarily
cheery news for the Nigerian banking industry.There was a slight decline in
satisfaction ratings compared to last year's figures. A possible reason is the
execution of aggressive expansion plans by banks over the past year that may have
negatively impacted service consistency across channels, thereby compromising
the customer experience.
The survey results reveal that banks need to focus on two important areas to
engender greater customer value:
! Accessibility and ease of use of the banks' diverse range of channels; and
! Availability of robust customer support infrastructure to enable service adoption
and usage.
The survey highlights that the potential exists for banks to further satisfy their
customers and provide thrilling encounters. Customers are relatively satisfied with
the range of products available, but appear to be experiencing challenges in
purchasing and accessing support in using these products.This could possibly be
attributed to inadequacies in current internal processes and supporting
infrastructure.
Tracking the customer loyalty needle
In conclusion, Nigerian banking customers remain in the 'zone of indifference'.
Focus on the customer is not sharp enough to point the loyalty needle towards
affection.This indicates that banks are yet to tap into the service delivery potential
that maximises life-time customer value.
Research has shown that it costs about five times as much to acquire a new
customer as it does to keep an existing one. It is therefore necessary for banks to
deliver a consistent, sufficiently rich experience to keep the customer coming back,
bringing their friends along. According to Maurice Franks,“Loyalty cannot be
blueprinted. ….It is a force which leaps into being only when conditions are exactly
right for it...
” This is unlikely to happen by accident.
Going forward, the smart bank will consciously focus effort and resources on
providing the right conditions for creating customer loyalty - the Holy Grail of all
successful organisations.
Our business is about
technology, yes. But it's also
about … customer
relationships.
- Michael Dell
Figure 19 - Overall Banking Industry Customer
Satisfaction: Corporate Banking Segment
Conclusion
Contacts:
Seyi Bickersteth
234 1 462 0045
seyi.bickersteth@ng.kpmg.com
Bisi Lamikanra
234 1 461 3405
bisi.lamikanra@ng.kpmg.com
Kunle Elebute
234 1 271 0534
kunle.elebute@ng.kpmg.com
Yomi Sanni
234 1 463 0177
yomi.sanni@ng.kpmg.com
Ayo Othihiwa
234 1 269 5970
ayo.othihiwa@ng.kpmg.com
Dimeji Salaudeen
234 1 463 0297
Dimeji.salaudeen@ng.kpmg.com
Page fifteen
5
Customer
Satisfaction
Index
(CSI)
78
76
74
72
2007 2008
76.47
75.86

© 2008 KPMG Professional Services, the Nigerian member firm of KPMG Internationa, a Swiss Cooperative. All right reserved.
Banks are asking:
! “How do we build enduring value propositions
for our customer segments?”
! “How do we align the entire organization to
consistently deliver superior customer value?”
Truly customer-centric organizations manage
themselves in a fundamentally different way.
KPMG can assist you to unmask the key
organizational barriers that undermine service
quality, helping to establish the strategic linkage
between effective customer management and
strong bottomline financial performance.
www.ng.kpmg.com

2008 KPMG Nigeria Banking Industry Customer Satisfaction Survey

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