How to grow through referral
Net Promoter Score (NPS) is a key metric for private banks and wealth managers. It can be a very useful metric to help estimate the potential growth of a business. But its comparative context and benchmark are equally important.
An organisation’s NPS can be high even when markets are tanking if the relationship is strong and client expectations are being managed through proactive and transparent communication.
Referrals are a keyway of attracting the three key audiences for growth:
- New-to-wealth high net worth’s (HNWs) and affluent
- Those looking to add more services or diversification
- Those dissatisfied with their current providers who want to switch
We’ve been tracking NPS, amongst other metrics, for leading wealth managers and private banks around the world for over 20 years, utilising our MillionaireVue omnibus. Some people assume that the market conditions are a key determinant of the scores, but we haven’t found sufficient evidence to support this. In fact, an organisation’s NPS can be high even when markets are tanking if the relationship is strong and client expectations are being managed through proactive and transparent communication.
By way of example, the pandemic clearly saw some winners and losers with a fluctuation of scores, both up and down. However, the market average remained remarkably consistent at 34 through 2020 and then 36 in 2021, though this is marginally down on pre-pandemic levels.
We therefore continue to advise clients that a target NPS of 40 or more is what they should consider an acceptable minimum, however scores in the 70s are definitely possible.
In addition to NPS, market penetration, and awareness from marketing are also vital in growth through referral and we regularly measure these too. Understanding in depth what clients say about their wealth manager and who they think the organisation would best suit, are also key to understanding reputation in the market and whether the strategy will pay off.
For instance, whilst it’s tempting to add more services and approach the market from as many different angles as possible, we’ve consistently found providers with more focused propositions and reputations for who they serve best to have higher NPS and consequently fast growth curves.
MillionaireVue gives financial brands the opportunity to explore the changes in wealthy investor behaviours and attitudes, by allowing brands to put questions directly to a post-covid audience of HNWIs and understand their changing needs and requirements towards their finances.
Get in touch to ask your own questions and access and understand the world’s wealthiest individuals across three of the world’s main wealth markets – UK, United States and China.