Local Market Competitive Effectiveness Studies (Banking CFX)

At its core, consumer banking is a local business. Competing effectively requires strategies and tactics that reflect the needs of local markets and the strengths and weaknesses of local competitors.

GfK delivers detailed market information about the attitudes, perceptions, and behaviors of banking consumers within local markets. Our Local Market Competitive effectiveness (CFX) Studies evaluate the strengths and weaknesses of individual competitors, and enable sponsoring financial institutions to identify opportunities for greater growth and profitability.

Many banks currently conduct research at the local level. Typically, these studies cover customer satisfaction, advertising tracking or brand health. We believe our Local Market CFX Studies represent significant advantages over these proprietary studies. The following factors are relevant:

  • Our Local Market CFX Studies provide an integrated evaluation of competitive effectiveness. We evaluate performance in terms of new customer acquisition, customer retention and "share of wallet.” And we link this performance to detailed analyses of the customer experience, brand health and marketing communications effectiveness.
  • Our studies typically involve very large sample sizes. This makes it possible to cut data for specific demographic or geographic segments, or to evaluate individual competitors in detail.
  • Having surveyed thousands of consumers nationally, we have accumulated a robust set of norms that we use to inform custom studies conducted for bank clients.

Key Areas of Investigation

GfK’s Local Market CFX Studies encompass four principal areas of analysis. The first, an evaluation of Competitive Momentum, is the golden thread that unites all the other analyses. We look at the current structure of the consumer banking market. We use multiple measures of consumer behavior in the recent past to examine how individual banks have been performing in terms of new customer acquisition, customer retention and "share of wallet.” Cross-selling effectiveness is assessed for a broad array of specific products and services. Six forward-looking measures provide indications of likely future performance in the marketplace. Together, these indicators of competitive momentum tell a clear story about which institutions are winning (and which are losing) on each of three marketing challenges: attracting new customers, retaining existing customers and building deeper, larger customer relationships.

Our analysis of the Customer Experience examines the success of individual banks in satisfying the needs and expectations of their customers. We examine the relationship between satisfaction, customer loyalty and "share of wallet.” Statistical analyses look at how the drivers of satisfaction differ from the drivers of "share of wallet.”  Individual competitors are evaluated by their customers on numerous specific attributes, and strengths and weaknesses of individual competitors are identified.  We quantify the extent to which individual banks exceed customer expectations—and the extent to which they fail to meet expectations. We use open-ended questions to examine the causes and consequences of these positive and negative experiences.

Our analysis of Brand Health will begin with an evaluation of individual bank brands on the fundamentals of familiarity and favorability, and relate these overall measures of brand health to consumers' disposition toward specific banks.  This will be accompanied by a detailed and comprehensive assessment of brand image and character.  Perceptual maps will show how banks are perceived on three dimensions:  1) tangible utilities such as convenience, service quality, pricing, accessibility, technology, product line, etc.; 2) personality traits; and 3) values, i.e., the guiding principals that consumers associate with bank brands.   This analysis will show how individual brands are differentiated and the positions they occupy in the minds of local consumers.

Finally, we prepare an analysis of Marketing Communications Effectiveness, including an assessment of how advertising, press coverage and word of mouth are influencing the brand health of individual banks. Analyses of specific bank ad executions, which utilize measures of branded ad recognition, together with spending data from Competitrack, evaluate the efficiency of achieving brand-linked ad awareness. Ad diagnostic measures identify the power of ads in terms of generating brand differentiation and good brand feeling, communicating brand news and providing enjoyment. This battery of measures also looks at the extent to which ads are confusing and suffering wear out. We calculate Ad Potency—a measure of the effectiveness of specific ad executions in strengthening or reinforcing brand health.

We have studied some of the largest, most dynamic banking markets in the US, including:

  • Boston
  • Chicago
  • Detroit
  • New York City
  • St. Louis
  • South Florida
  • Washington DC

For additional information on GfK Financial Services Banking CFX studies, contact us.