In May, Market Probe conducted a groundbreaking National Retail Bank Customer Advocacy Study among 7,000 retail banking

customers. These 7,000 retail banking customers represented the consumer segment with the highest potential for near-term revenue growth for banking services: consumers between 30 and 55 years old with household incomes of $50,000 or more.

With such a large sample of consumers, Market Probe was able to target and profile a particularly lucrative segment for the banking sector: those customers who use their primary bank to manage their investable assets. Market Probes SHARE+ Customer Advocacy management framework was key in identifying these customers.

Beyond Satisfaction. t i Beyond Loyalty. Beyond Recommendation.

Advocacy:

Its What Really Drives Customer Actions

Customer advocacy represents contemporary, real-world measurement of positive word-of-mouth, strong impression and favorability toward, and relationship with, the customers preferred company. Advocacy is the next stage in the evolution of customer measurement, and Market Probes SHARE+ advocacy research framework is leading the way.

Dr. Tom Fusso Senior Vice President Head of Financial Services

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mor about Advocacy re NEWSLETTER

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ABA Marketing Conference Minneapolis, September 12-14 with special Power Breakfast, Tuesday, September 14 Market Research & Insights In Action Conference Amsterdam, October 5-7 BAI Retail Delivery Conference Las Vegas, October 19-21 North American Conference On Customer Management Orlando, October 25-27

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our FREE webinar

Customer Advocacy: A Measurement Framework for Companies That Monetizes and Drives Action Thursday, September 30, 1:00 p.m. to 2:00 p.m. CST-USA Presenters Dr. Michael Lowenstein, CMC, Executive VP, Market Probe Dr. Tom Fusso, Senior VP, Market Probe Register Now: http://bit.ly/AdvocacyWebinar

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Market Probe appears among the Honomichl list of Top 50 US Research Firms specializing in stakeholder solutions for customers, employees, and brands. For information, contact:

the MRB Customer Advocacy Group on LinkedIn

Go to: http://linkd.in/MRBadvocacy

info@marketprobe.com.

Analysis of Customers with

Investable Assets
September, 2010

Bank-Managed

he core of the SHARE+ framework is the determination of customer advocacy levels based on (a) the emotional/rational favorability toward, and (b) the downstream communication about their primary bank. The addition of recent actual behavior such as positive and negative comments to other consumers based on personal brand experience and an emphasis on the emotional drivers toward their primary bank produces a customer metric that represents a substantial advancement to the customer management metrics currently found in the market. Consulting firms such as McKinsey have determined that word-of-mouth drives 20% to 50% of customer decision-making, so Market Probes SHARE+ represents a valuable, contemporary technique for evaluating the impact of transactions as well as strategic brand strength. The initial conclusion that spurred this analysis is that customer advocacy monetizes at a stronger and more consistent rate than other key customer research measures in active use among retail banking customers. We first segmented the market into four segments defined as their level of advocacy toward their primary bank. We found that retail banking customers who were advocates of their primary bank are substantially more likely to continue their relationship with their bank, had recently opened additional accounts at their primary bank, and had made positive comments about their primary bank to friends, relatives and colleagues. This substantial predictive power of customer advocacy is also reflected when we asked these bank customers the size of their investable assets (IA) and if any of these IAs are currently managed by their primary bank. We defined bank management as held in accounts at their primary bank, managed by a Private Banking/Trust division of their primary bank, or managed by a brokerage that is owned by their primary bank. The size of investable assets varies widely across the 30-55 year/$50k household income customers. Five percent (5%) had no assets, while 3% had $1 million or more. The largest segment (56%) has assets that ranged from $1K -100K. But, as expected, levels of advocacy and investable assets had little correlation.

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Customers also varied in the percentages of their assets that were managed by their primary bank. A quarter (25%) did not allow their primary bank to manage any of their assets. The majority (57%) of customers invested 20% or less of their IAs with their primary bank. The most lucrative customer group invested 40% or more of their assets with their primary bank and made up 27% of the customers in this study. Significant differences were found between Advocates and Alienated in the percentages of bank-managed assets. One of the definitions of a good segmentation is the identification of a higher worth segment adequately sized to merit pursuit, and we found one when we crossed asset size with percentage managed by their bank at a customer level. Those customers with $50,000 or more invested with their primary bank made up

24% of our customer sample. Advocates were more likely to be found among that $50K bankmanaged asset segment, while the Alienated segment disproportionately composed the no funds managed by bank segment.

September, 2010

This $50K+ bank-managed asset segment lows most bankers knowledge of this grou $50K+ bank-managed asset segment is old likely to be married and has higher educati

Both the wealth and business divisions of lucrative and worthy of pursuit than the av $50,000 or more managed by their primary ployed, operate a business and were somew ness account.

When asked to check a variety of possible using bank asset management, the $50K+ ingly similar to the total, but with stronger bank messaging to resonate with all high-p better products elsewhere with higher rates access to professional advisors.

While Market Probe has found that custom bank have substantially higher levels of re survey information indicates they are also management of their investable assets, a g banks. The Customer Advocacy framewor revenues. Market Probe will be releasing m later this fall.

Dr. Thomas Fusso

Senior Vice President
As Senior Vice President and Head of the Financial Services practice at Market Probe, Tom manages a team of experienced researchers dedicated to the investment/brokerage, banking and insurance industries. With 17 years of experience on the client side, most recently as a SVP of Research/Database for US Bank, Tom understands the deliverables required to drive organizational change. Tom directs all aspects of a project, including questionnaire design, sampling issues, reporting design and providing insightful conclusions and recommendations. His doctorate focused on survey design and advanced statistics, and he is comfortable with the most current advanced statistical techniques.

Tom has work 2003. From 20 Synovate (form Northwestern Wells Fargo, R MBNA.

Tom received received his P Nevada at Re Probe office a

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is readily identified, and intuitively folup. Compared to the total sample, this der, has higher household incomes, is more ional levels.

any bank should find this segment more verage retail customer. Customers with y bank were more likely to be self-emwhat more likely to have a separate busi-

e barriers that would demotivate them from bank-managed asset segment was surprisr polarization. This similarity will allow potential customers. The barriers involved s of return, the reputation of the firm and

mers who are Advocates of their primary eferrals, repurchase and retention, this more likely to use their primary bank for growing and profitable revenue source for rk provides a strategic path to grow those more detailed findings about this segment

ked for Market Probe for seven years after rejoining the firm in 000 to 2003, he directed the U.S. Financial Services Practice for merly Market Facts). His clients included Merrill Lynch, UBS, Mutual, Charles Schwab, State Farm Insurance, Bank of America, Regions Bank, BB&T, National City Bank, Goldman-Sachs and

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a BS in Psychology with Honors from the University of Iowa. He PhD in the joint Social-Psychology program at the University of eno. He resides in Vancouver, Washington and heads the Market at that location.

September, 2010