Customers emotional about financial services
Financial services companies trade upon the relationships they hold with their clients, and those relationships depend on serving those customers' needs. But what do they really want and need?
The answer, according to Harris Interactive, and one that banks such as Barclays might take note of, is that after excellent service has become the 'norm', it is actually emotional factors that top customers' list of needs.
The company's research in the UK also found that consumers are also looking for financial institutions that treat them fairly, act responsibly, and have friendly staff. But, given that these emotional needs are so prevalent, it leads us to ask the question: how many financial organisations are actually focusing on such needs when designing their products, services or communications?
What stands out and signals the importance of these 'softer' traits is that offering a wide range of products and services is only slightly more important than being ethical. In fact being ethical and relevant to you personally is more important that being up to date, having a large branch network or having a strong online presence.
There was a time when being big, having a large retail branch network and large number of cash machines was particularly attractive. Today those needs are less prevalent, and consumers are now looking for something different, and needs do vary bank by bank. Some are looking for a deeper emotional relationship with their bank, one that goes beyond trust and fits with their lifestyle and priorities. Some others simply want a bank that delivers good products and services, the channels of delivery are far less important.
When analysing consumer needs by their main bank, it is clear to see that the communication strategies of both the Co-operative and First Direct are working. Both have either managed to attract customers aligned to their strategy or have effectively communicated what they stand for to their customer base and make it an important point of differentiation. Interestingly, within the credit card and general insurance markets, similar differences by brand exist.
In particular the AA, Tesco and LV= stand out from the crowd within motor insurance. So even on the most basic level we can see the power of brand and communications and how they have a role to play managing the customer relationship. They help set customer expectations even within those categories that many see as a commodity product. Of course, we have to accept that there may be a bit of post-rationalisation here. Despite this, clearly some banks are attracting customers who have distinctive rational and emotional needs.
Many organisations talk about how they have 'consumer centric' processes, some even shout about how they have recently integrated their legacy systems into a single customer voice or have developed a customer segmentation to help them effectively target profitable customers. But managing customer relationships effectively is not simply about integrating the latest technology or software, nor is it just about data mining and finding out who your most profitable customers are.