Jan Eklöf To be released May 31st, 2005

 

Press Release – EPSI Baltic Countries

- Consumers in Baltic States more satisfied than their Nordic Neighbors

§ The most satisfied bank and mobile phone customers are found in Lithuania, while the Estonian consumers are less happy. Compared to customers in the Nordic countries and Russia, Baltic consumers tend to appreciate their banks and mobile providers highly.

§ Hansabank in Lithuania is on top among bank customers. In Latvia, Hansabank and SEB are sharing the top position, while SEB is on top in Estonia, all according to its respective customers.

§ Among the mobile phone providers in the Baltic States Omnitel has the most satisfied customers, while Tele 2 falls in the other end.

§ Reasons for the generally high scores are to be found in the fact that the majority of customers in the Baltic States are less demanding than those in neighboring countries.

§ However, this is going to change, as expectations are increasing for many customers groups. This will increase the competition and the drive to improve offerings and service provision also in the Baltic States.

These are some of the results from the recently conducted studies among bank and mobile phone consumers in the three Baltic countries. The study has been conducted as an integral part of the Pan European Performance Satisfaction Initiative (EPSI Rating). This is the first time it is extended to the Baltic States. It is done in order to support the development of customer oriented and driven services throughout Europe.

The study is based on interviews with more than 5,000 individual customers representing all three Baltic States. It was conducted through telephone by the data collection company Hermelin Research. All analysis is done by EPSI Rating using the same approach and model as in the 20 countries that are part of the initiative. Thus, the results can be compared with those available on an annual basis from many other European countries.

 

Main results

Overall, the consumers in the Baltic countries are satisfied with both their bank and their mobile phone provider. The results by country are illustrated below. Here, also the Nordic countries are given as benchmarks.

As is seen from the above diagram, the Lithuanian consumers give their banks and mobile phone providers the highest scores, while the Estonian customers are less satisfied on average. It can also be seen that the results for the Nordic countries vary quite a lot.

The bank customers in Estonia and Latvia give their bank relatively similar scores as do the Danish and Icelandic customers, while bank customers in Norway and Sweden are more critical. The Russian banks are scored lowest among those countries compared here. The mobile operators on the other hand get similar scores in Estonia and Latvia as in Denmark, while all the other Nordic countries lay considerably lower. Here Russian operators score high, second after Lithuania.

The satisfaction index is reported on the scale 0 – 100. The higher score the more satisfied customers. Averages usually fall in the region 60 – 75. Any company receiving a score above 75 has a strong position among its customers, while those below 60 face risks of loosing the customer base. The statistical precision is good for the overall results, and a difference of 1 unit or more for the country average is significant. The average results for the Baltic countries are:

 

Satisfaction by country According to EPSI 2004 – 05

 

 

The main explanation for the high averages in the Baltic States is to be found in relatively low expectations by customers. In general, the consumers perceive that they are receiving good quality of products and surrounding service, while the value for money (perceived value) varies more widely.

 

The banking sector in the Baltic States

Satisfaction in the banking industry in the three Baltic States is relatively high as compared to other countries in the North European hemisphere. It is especially high in Lithuania. As a comparison it can be noted that the satisfaction levels in Russia are much more in line with what we find in the Nordic countries, than with the Baltic results.

The respective numbers are as follows:

Satisfaction with the Bank in Baltic States

Customer Satisfaction is a strong driver of loyalty with your current bank. Those customers who express high satisfaction are much more due to remain with their bank and also to increase their relationship, than those showing low satisfaction. The relationship between satisfaction and loyalty is shown in the following diagram.



 


For the Baltic region the following results by bank is achieved. Here the respective national index value is weighted in accordance with the respective national GDP (as is the practice in EPSI Rating).

 


The Mobile phone sector

In the mobile phone study the main operators in the respective Baltic country has been analysed from their actual customers. The respondents have been taken by representative samples in all three countries. The following benchmark results are achieved.

The respective scores are.

Satisfaction by Provider EPSI 2005

It is seen from the above that the spread between companies is larger in the mobile phone sector than in retail banking. The same goes for loyalty. This should indicate that there are strong driving forces towards increased competition between the providers in the Baltic States.

Generally speaking, the Customer Satisfaction measure functions as a leading indicator capturing crucial information about future trends and market development. There is also a strong positive relationship between Satisfaction – driving Loyalty – towards Profitability.

 

The EPSI Rating

EPSI Rating is an integrated system for the collection, analysis and dissemination of information about what customers expect, how they perceive quality and how they value the products and services they buy. Measurements provide information about customer satisfaction, the reasons for it and its effects on loyalty, trust and repeat purchases.

In partnership with the leading European quality organisations EFQM (European Foundation for Quality Management) and EOQ (European Organisation for Quality), EPSI Rating has developed a common European standard for measuring customer satisfaction. This common standard, EPSI Rating (European Performance Satisfaction Index), has been developed to offer European organisations a common frame of reference in order to measure customer satisfaction and loyalty independently and to analyse improvement measures. EPSI Rating is based on the EFQM "Excellence Model" developed over the last 10 years. Such harmonised measurements have been performed and presented in a large number of countries since 1999.

Using EPSI Rating gives different stakeholders unique knowledge about both customers and competitors. It gives information about both the own organisation and the main competitors in terms of image, expectations, quality of products and/or services, value for money, satisfaction and loyalty

High-quality production and distribution are crucial in achieving a long-term competitive edge. For this reason, it is important to pay attention to quality as it is perceived by customers. To do this, the corporate sector need to know how customers perceive quality based on regular, independent surveys. EPSI Rating has been launched with the aim of satisfying this need. By using EPSI Rating, companies, organisations and other stakeholders can analyse issues such as:

  • Where does the consumer receive the best value for money?
  • What properties/functions of a company does a customer value the most?
  • How is customer loyalty affected and what is required to encourage repeat purchases?
  • Is Swedish quality a powerful argument in the eyes of today's customers?
  • How well do domestic companies compete with those from the rest of Europe, North America and Asia?

This data is crucial for both the individual company - e.g. when it comes to benchmarking and prioritising quality measures - and the investor. It is also important as far as the industry as a whole and society in general are concerned. The data also provides information on competitiveness, customer loyalty, future company value and on the feeling of well-being perceived by different users. Furthermore, it highlights the relationship between productivity and quality and pinpoints import competition. Compared to the majority of traditional key ratios and analysis models, EPSI Rating is very much forward-looking and hence gives the user an idea of what to expect as regards future competitiveness and profitability trends. The value of the future customer base can also be directly analysed based on the data the index provides. The increasing number of industries being surveyed by EPSI Rating also enhances comparability and the value of the information in general.

For more information, and links to the Baltic network, contact the EPSI Rating secretariat in Stockholm.

EPSI Rating, web-site: www.epsi-rating.com. Secretariat: +46-8-7369236 (Mari Källström) or Dr. Jan Eklöf, SSE, phone: +46-70-6964185, E-mail: jan.eklof@epsi-rating.com.