Assignment on National Australia Bank

Introduction of National Australia Bank

This report aims to provide deep insights into the Net Promoter Score metrics and how it can provide detail regarding customer satisfaction. NPS is a measure from which it can be known whether the customers are promoters or detractors.

The CMO of NAB (National Australia Bank) wants to implement the Net Promoter Score (NPS). The CMO Jane Porter was pressurized by the CEO of the organization to replace the customer satisfaction metric. The major Australian Banks which include CBA, Westpac and ANZ have sifted to NPS and now Jane is deciding whether to move to NPS or not. Jane has decided to consult with leading marketing analytics consultant to know whether customer satisfaction is a good metrics or should be replaced with NPS.

Literature Review of National Australia Bank

Keiningham, et al. (2008) have suggested that at a central stage, the managers need a practical and dependable approach to screen and improve execution that depends on strong information. Be that as it may, as per our exploration, a considerable lot of the fundamental suppositions about NPS are defective. Accordingly, administrators who are guided by NPS may create ridiculous perspectives about execution, worth and investor riches, driving them to misallocate assets. Albeit Net Promoter might be easy to actualize and simple to impart and may help organizations to remember the significance of client steadfastness, the cases about the exploration supporting the measurement are centred around the development. In particular, Net Promoter has been touted as the “single most reliable indicator of a company’s ability to grow” (Keiningham, Aksoy, Cooil, & Andreassen, 2008).

Shaw (2008) has proposed that the customer metrics such as Net Promoter have to be the main pointers that pave the way for the modifications in economic pointers such as revenues. For that reason, this confirmation could be considered as an interval indicator — general public report high Net Promoter scores in one year or more right after the development take place. A clarification of this is the fact that they are reacting to the apparent endorsement of the products; they approve what they have perceived to be those developing products. In addition, he also has mentioned that the involvement is really a vital factor of customer behaviour, as well as low-connection purchasing behaviour which is totally divergent from high-connection purchasing. The massive mainstream of purchases are low-connection along with the habit is every so often the controlling power for the consumer. These low connection purchases by their nature will not produce Word of Mouth buzz, and as a result, Net Promoter can be assigned as a valuable measure on both cause as well as effect foundations (Shaw, 2008).

Stewart and Worthington (2015) have stated that for a great part of the 1990s and through until the mid-2000s, the executives were resolved to improving consumer loyalty, utilizing measurements, for example, relative satisfaction, average satisfaction, as well as 'rate exceptionally satisfaction. At that point, in a 2003 Harvard Business Review article, Fred Reichheld of Bain and Company presented the NPS. This was pursued not long after by his 2006 book, The Ultimate Question, where he propelled a searing assault on the fulfilment universality, broadcasting the support question to be its legitimate successor, and the NPS as "one number you have to develop". In spite of the way that his cases of NPS' prevalence have since been addressed by promoting scholastics, no doubt the board was prepared for another 'silver projectile', bringing about the NPS presently being the standard client metric over various associations.

The NPS computation is a trademarked context and two different gatherings. Supporting the estimation is his case that a client's response to the backing question can be utilized to dependably group them as either advertiser (steadfast fans who stay with purchasing from a company and encourage their companions to do likewise), depreciators (despondent clients caught in a terrible relationship), or passives (fulfilled however apathetic clients who are effectively charmed by the challenge). The NPS estimation is then a basic netting of his supposed advertisers and detractors (Stewart & Worthington, 2015 ).

According to the research findings of Keiningham, Cooil, Andreassen, and Aksoy, (2007) net promoter scores (NPS) method is a measure through which non-financial and financial changes in the future business operations of an organization can be measured. Non-financial are loyalty and satisfaction of customers that lead to financial changes such as sales and growth of profit from the execution of future business operations (Keiningham, Cooil, Andreassen, & Aksoy, 2007).

Another information-based report on net promoter scores (NPS) presented an idea against the use of net promoter scores in the organizations for performance and quantitative analysis of organizational operations in the consumer market. NPS has several drawbacks which are identified in this report (Reichheld, 2003). Key limitations of net promoter scores (NPS) method in the measurement process is that it covers limited dimensions about performance measurement. A website report presents the importance of NPC in the forecasting process. NPS is considered as the simplest approach for managers to utilize for performance measurement. Although, it’s assumed as quite easy to understandable approach for its users (Stewart, Dave; Worthington, Steve, 2015).      

Summarizing research outcomes it is clear that managerial staff and organizations are adopting net promoter scores to study customers and their preferences. Moreover, net promoter scores (NPS) is supported by some researchers because of its advantages such as simplicity and easiness. However, at the same time, some of the researchers and market reports have presented arguments against net promoter scores (NPS) method and its implementation in the companies because of some limitations and drawbacks associated with it.         

Methodology of National Australia Bank

            Project is following a simple methodology of questionnaire development and data collection from the targeted market. Survey method is used to collect quantitative data or customer responses in the form of unarranged and ungrouped data. Raw data is further arranged in the spreadsheet and classified as the promoter, detractors, and passive to calculate and measure net promoter scores (NPS). Graphs and tables are added in the report to use graphical visualization and projection for the ease of readers to reach a conclusion easily. Total 191-208 respondents are selected for survey and data analysis of question 3 and 2 respectively. In this report, four research questions were developed which are presented below:

Q1. Main bank for personal banking services?

Q2. How satisfied are you with your main bank for personal banking services?

Q3. How likely would you be to recommend your main bank to friends and colleagues for personal banking?

Q4. If you were to choose one bank today to manage your personal banking, which one would you choose?

Interpretation of National Australia Bank

According to the quantitative data analysis of research data NPS value for question 2 is around 17. Although promoters, detractors, and passives are 77, 41, and 90 respectively. However, the total percentage of these respondents indicate that around 22% of respondents have selected level 10 option. While the total number of respondents for this question was around 208 including customers of NAB bank. These respondents are projecting least value for level 4 (on the scale of 11 levels starting from 0 to 10). See the presented below table and attached graph in the appendix for further details about respondents and net promoter scores.          

Question No. 2

NPS Score	Number of Respondents	% Of Respondents	Promoters	Detractors	Passives
10	45	22	77	41	90		NPS
9	32	15	37	20	43		17
8	65	31
7	25	12
6	10	5
5	12	6
4	1	0
3	5	2
2	2	1
1	7	3
0	4	2
Total Respondents	208

The following graph is projecting responses of customers in response to the question about the level of customer satisfaction towards offered banking services by the selected banks. The question asked to the respondents in the survey is “If you were to choose one bank today to manage your personal banking, which one would you choose?”

The following table is representing the results of NPS analysis taken by the use of recent survey report on the bank. For question 3, total respondents were around 191. While on the other hand, total promoters, detractors, and passive consumer for personal banking services are 60, 55, and 76. However, calculated NPS scores for question 3 are around 3.

NPS Score	Number of Respondents	% Of Respondents	Promoters	Detractors	Passives
10	29	15	60	55	76		NPS
9	31	16	31	29	40		3
8	46	24
7	30	16
6	9	5
5	19	10
4	5	3
3	5	3
2	3	2
1	4	2
0	10	5
Total Respondents	191

The following bar graph is a graphical projection of responses collected from 191 respondents. In this graph the overall trend of customers is presented towards the level of potential to recommend banking services of their selected bank to their relatives and colleagues. The question asked to the respondents in the survey is “How likely would you be to recommend your main bank to friends and colleagues for personal banking?”     

Recommendation of National Australia Bank

The bank should implement NPS for customer loyalty management. The NPS approach provide more detail regarding the customer satisfaction which only customer satisfaction survey cannot provide. The bank should replace performance measurement system by NPS because from this the organization can increase brand loyalty in the minds of the customers. NPS should be used for financial forecasting because from this it can be known how much customers are purchasing products of the corporation. The NPS computation is a trademarked context and two different gatherings. Supporting the estimation is his case that a client's response to the backing question can be utilized to dependably group them as either advertiser.

References of National Australia Bank