If you think about the people in your life that you are closest to, chances are they’re the ones that you’ve shared the most experiences with. Those experiences (positive or even occasionally difficult) bond you to those people.
Experiences also bond people and brands; people expect the brands they associate with to engage them in an experience. And because there are few things as personal as money, banking as an industry has a huge opportunity to engage people in experiences that build lasting and mutually rewarding relationships. Yet it’s also a segment that has low satisfaction rates (44% in a recent Harris Poll) and gets more than its share of bad publicity.
To better understand the opportunity facing financial institutions, we recently commissioned a study on people’s attitudes toward their bank and, most importantly, how they felt their bank felt about them. Consumer Insights Inc. conducted the survey of 250 people across a range of incomes and banking needs in January. Then, we overlaid these findings with conversations taking place in social media to get a sense of how banks can build stronger relationships with their customers.
One of the biggest takeaways was the difference between the way people feel about their bank and how they perceive their bank feels about them. About 39% of people we surveyed feel indifferent toward their bank. But when asked how they think their bank feels about them, 54% expressed the belief that their bank is indifferent toward them and another 6% felt their bank actually dislikes them. I doubt there are many human relationships that could survive under that scenario. In fact, 15% of those surveyed said they were very open to switching banks and another 15% were somewhat open, meaning nearly a third of customers are vulnerable on any given day.
If you feel that your bank is at best indifferent to you and may actually loathe you as a customer, imagine how that might affect the conversations you have with others regarding that institution. Using Meltwater Buzz, we took a snapshot of the conversations taking place in social media about banks and banking. An overwhelming 98% of the conversations were negative, mostly related to customer service woes, carelessness or discontent with fees and management.
On their Websites, bankers tend to say things like, “We value what’s right for our customers in everything we do.” Yet, people clearly don’t feel valued by their banks. And even worse, they feel the power in the relationship is very one-sided. When we asked people what they wish their bank understood about them, we received answers such as:
“That I’m a human being.”
“That I am good at ‘advertising’ for them.”
“That I am a person, not just an account.”
“That I make a choice every day to keep my money with them; I wish I felt they invested in me as a customer.”
“That I am a real person with real needs. I should be treated with greater respect.”
“That I’m not just another sponge for them to squeeze money from.”
Clearly, banks have a huge opportunity to find ways to create experiences that enable these feelings rather than undermine them. Ally Bank leans directly into this with its “People Sense” campaign, which is centered on doing right by customers because it makes good business sense. But banks also need to do things that build involvement with customers in ways that deepen relationships by showing that they understand and appreciate that it’s not their money; are focused more on what customers want to do than on what the bank offers; give people credit for knowing things about their money; don’t judge people based on what they have, but what they could be; and value people’s loyalty.
Here are a few ways banks can build mutually rewarding customer relationships:
Change the conversation. Banks have an opportunity to show that they are championing their customer’s needs by focusing on what the customer wants to do. Start every conversation with, “how can we help you do what you want to do?” vs. “here’s what we have for you,” which just furthers the feeling that the customer doesn’t matter when offered things they either already have or clearly don’t need. Irvine, Calif.-based Opus Bank takes this approach with its “Build Your Masterpiece” tag line, which is geared toward supporting people with the vision to drive job growth. Another great example of championing customer needs is how American Express created a program to increase sales for their small business customers called “Small Business Saturday,” which encouraged people to shop small businesses on the Saturday after Thanksgiving, creating double-digit sales increases.
Create a culture of choice. Banks could give people credit for knowing something about their money and what they want to do with it by offering ways to create or customize their accounts and services to fit their needs. While many aspects of financial products are regulated, there’s an opportunity to let people choose other services that they value. Where one person might value free wire transfers, another might prefer something entirely different.
Give people tools. Why not offer financial management tools that make it easy for people to be good with money by helping them set goals and track their progress using their own account data? Then, create rewards for their financial decisions and goal achievement. This could be a great opportunity to tie in other commercial banking partners like retailers and restaurants in each geographic area.
A few banks, such as HSBC and ING, have made tentative moves in this arena. ING launched their “What’s Your Number?” campaign to help people find what they need to save to retire the way they want to. Unfortunately, the program doesn’t appear to have been fully integrated into ING’s “My Financial Life” offerings nor could I find any type of rewards for hitting milestones, etc. HSBC also offered tools for managing electricity use as part of their “Math of Life” program but, again, it seems to have been a promotion rather than an ongoing way of championing their customer’s needs.
Create communities for customers to share financial advice with each other – and with the bank. Banks can show that they embrace customers as people (not just for their money) by adopting the behaviors of sociable people. Banks can build deeper relationships by being accessible, interested in what people have to say and by providing inspiration and ideas to help them achieve what they want to with their money. And be sure to make it a two-way dialogue. Regional banks like Umpqua Bank have done a great job of using technology to create a personal touch outside the bank. In contrast to 98% negative conversation for most banks, theirs is 99% positive and almost to the point of fostering a “my-bank-is-better-than-your-bank” pride.
Empower employees: Banks have the opportunity to give their employees the power to act in the best interest of their customers and reward them based on their personal contributions to the relationships they have. This is particularly important as more customers switch to online banking and each interaction takes on more importance. Empowering employees to be at the service of the customer also gives them the opportunity to change their role from experts selling products to people offering supportive expertise (and products/services) to help people achieve their financial goals.
While creating these kinds of experiences may not directly lead to selling more banking products, they have real business value. They build involvement with your customers and that involvement will lead to deeper relationships that are more mutually rewarding and profitable. And in doing so, you will not only become the brand that everyone is talking about but you will create preference, loyalty and advocacy with your customers.
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