By Mark Gibson
Historically, a bank’s success has hinged, in part, on its ability to forge personal relationships with customers. And these relationships were typically based in the branch environment. Through repeated branch visits and personal interactions, bankers thrived on the opportunity to create and spread positive emotions of trust, security, and even happiness to their customers. (It’s amazing what a simple dog treat or lollipop can do!)
More recently, customers have turned to self-service tools, eliminating the need for most of those personal visits. That raises the critical question: How can banks establish and maintain positive emotional connections with customers who visit the branch much less frequently?
These emotional connections are too important to lose. Fortunately, there are specific tools and tactics that can help deepen emotional bonds with customers who connect with you through technology.
Why is emotion so important?
Neuroscience tells us that the vast majority of our decisions are made with the emotional portion of our brains. Our rational sides typically kick in at the end to give our emotions “permission” to do what they want to do anyway. You’ve seen the aftermath of emotional impacts: Happy customers tell their friends. Disturbing photos of hungry children drive donations. Pete Frates’ diagnosis with ALS and subsequent “Ice Bucket Challenge” to Tom Brady and Matt Ryan convinces 17 million people to follow suit. And most recently, forceful removal of a single airline passenger creates a social media firestorm.
Studies indicate that the deeper and more positive the emotional bond, the stronger your relationship will be with your customers or colleagues. Whether we call it loyalty, satisfaction, or engagement, it all leads to the same positive outcomes—higher repurchase rates, better retention, more referrals, more valuable customer relationships.
Branding science is based on this principle. Building awareness is important, but revenue doesn’t increase until a prospect is familiar enough with you to like you so much that they prefer you over your competitors. Every major brand knows that consumers need to like you before your market share goes up.
How is the digital world impacting banking’s business model?
Of course, digital technology has had numerous positive impacts on financial institutions and their clients. There are, however, two potential forces that could have sizable negative financial impacts:
- The increased use of digital channels
- The shift to digital media
Digital Channels – On September 2, 1969, Chemical Bank installed the first ATM in the U.S. at its branch in Rockville Centre, New York. Ever since, bankers have been introducing self-service technology and pushing customers away from “high cost” personal service in branches. But the tipping point didn’t come until 2009 when USAA became the first bank to permit customers to deposit checks with a smartphone. Today, the banker’s dream of customers not having to visit branches has finally arrived.
And it’s turned into a potential nightmare.
Yes, costs are lowered, tellers are made redundant, and branches are closed. But now we realize that, if we don’t see our customers and talk to them periodically, it’s much harder to maintain that personal emotional relationship with them. This places us on an even playing field with much larger competitors, including monoline digital players like Quicken Mortgage and Capital One 360.
So the first major impact is how prevalent the digital channel has become, and how it has displaced most of the routine branch visits and customer contact opportunities we used to have. The nuclear radioactivity of reducing these visits is the lost customer engagement and sales opportunities that sprung from those conversations.
Digital Media Usage – The second major impact of digital is the changing media viewing habits of consumers. Television is the most powerful medium ever invented to convey emotion and emotionally engage an audience (short of live theater or music). While marketers have capitalized on this medium, consumers are turning away from their TV sets in favor of the Internet. Even for those people who enjoy a good episode of X or Y, they no longer have to watch it live with all those annoying commercials. The net result is that it’s much more difficult to reach your audience and convey an emotional message to them.
Of course, digital pre-roll video has been our response, but consumers can skip the ad after a few seconds, and premium viewers can avoid the ads altogether.
Here are three ways to preserve the emotional bond in the digital age:
- Mine the gold you already have.
How often have you heard a call center manager talk about how successful he’s been minimizing the “talk time”? That is a pre-digital conversation.
Today, every visit your customers make to a branch, call center, or website is a golden opportunity to have a quality conversation and create a positive emotional impression with them. For that to work, training is imperative. Recruiting the right type of customer-contact staff is critical. And the metrics of success need to change. As Zappos knows, the longer you keep them engaged on the phone, the higher their lifetime value.
But it’s not enough to wait for clients to visit. Similar to any retail store, that just won’t make the cash register ring frequently enough. We need to invent reasons for clients to engage with us. Similar to Barnes and Noble, which has an events manager at every one of its stores, we need to be thinking creatively about how we can attract people to our “stores” with financial and even nonfinancial topics that are of interest.
Take a look at your local craft brewery for inspiration. Yes, they’re selling beer. But what they are marketing is entertainment and a place to go to have fun and meet friends. Maybe we’re not serving beer, but we need to create a relevant, meaningful motivating reason for people to visit us. The alternative is to shut our stores down, like many retailers who have lost their relevance in today’s rapidly evolving retail space.
HarborOne Bank in Massachusetts is a glowing case study in this regard. A recent glance at their HarborOne University web page showed five upcoming programs in the next 15 days. Now that is community engagement!
Another example of an FI engaging emotionally is Capital One, which is rolling out a line of cafés. These sandwich shop/café/bank locations can be found in select millennial-rich cities nationwide.
In addition to mining your personal interactions with clients, you also have a wealth of digital techniques for collecting more customer data and more ways to learn from that data than ever before. Using data you already have, you can identify changes in customer behavior, then reach out to those customers proactively. This approach can yield significant benefits to both parties.
- Make marketing an important secret weapon.
As we enjoy fewer and fewer personal visits, it’s all the more important for us to get our brand in front of our customers and prospects in an impactful, positive, memorable way. Instead of investing in more branches, marketing is the new way to get in front of people in our community in an emotionally engaging way.
When we think “marketing,” we need to stop thinking only “advertising.”
Advertising is important, but it’s not the only arrow in the marketing quiver. And sometimes it’s not the best one, given the objective and the target market. For instance, if we are trying to reach an affluent middle-market business owner, advertising is the last vehicle we should be considering. For that purpose, one-to-one events, high impact direct mail, and thought leading content marketing are much more appropriate.
Whatever the objective or target market, marketing still has the potential to make your customer smile and buy, as a new study reminds us.
Here again, digital technology provides us with more data about our customers than we have ever had. We need to leverage that data to engage with customers in helpful, knowledgeable manner that makes them want to come back for more.
- Use digital media as an emotional catalyst.
While some of us from the previous generation lament how digital technology is killing our old proven techniques, the reality is that digital has the power to have just as much emotional impact, if not more. Let’s talk about three specific ways:
- Online Video – Everyone knows how emotionally engaging TV can be. The only difference between TV and online video is the device it’s being viewed on—and the screen size. Whether we are referring to YouTube or pre-roll ads, the reality is that being freed from the shackles of the standard 30-second TV spot allows for incredible creativity and even stronger emotional impact. Witness the incredibly powerful and thought provoking four minute video that Heineken recently unveiled, which has been viewed 12 million times and counting.Online video can be an even more liberating and emotionally powerful tool for smaller organizations that can’t afford a big TV budget. Witness this beautiful striking testimonial film by Budnitz, a Vermont-based purveyor of hand-built titanium bicycles.
- Personalization – One-to-one marketing has been around since 1997 when Pepper and Rogers coined the term. But every day, marketing technology allows us to do it more effectively. Direct mail linked to PURLs and email automation allowing for customized messaging without human intervention are two great examples. There is nothing more emotionally engaging than when a message or an offer has been customized to a “sample size of one.”
- Direct To Consumer – The wonderful thing about digital is that it allows an organization to eliminate the “middleman.” No longer are you beholden to the media buyer and the media establishment. You are free to speak directly to your customer and have them talk back.
With social media, not only can you establish direct communication with your customers and followers, but you can “listen” to identify fans or unhappy customers—and engage in a valuable discussion. This engagement, whether it’s based on a positive or negative interaction, can lead to a stronger bond with your customer. It allows you to demonstrate your commitment and trustworthiness on a one-to-one basis.
User generated content takes it a step further, allowing your clients to talk about you. Organizations that have encouraged their clients or members to “take selfies” of their relationship with the organization then have license to use that content to convince others of the value of belonging to a special group of people. There is nothing more powerful emotionally than hearing a glowing endorsement from a peer or colleague. The bank that best brings this concept to life has to be Frost Bank, which features a new photo each day on its website—all photos of a beautiful Texas landscape, and all taken by customers.
And the overall category winner has to be Wendy’s, for accepting a recent social media challenge. When a Nevada youth challenged the company to a tweeting contest, Wendy’s played along to the tune of 3 million retweets and a million likes. That’s what I call positive emotional engagement.
There are plenty more examples of banks that are digitally engaging with their customers. If you keep your eyes open, you’ll see some great ideas.
Finding our way through the forest.
We are surrounded on all sides by change. Executives rail about measurement and results. Customers no longer value what we stand for. Colleagues want more than just a reliable paycheck. Fortunately, there is a clear, well-marked path through the forest, and it even has bread crumbs to lead us back if we need them.
Money is emotional. It always has been. The intermediaries who have served consumers well and met them in their emotional space have been few. Digital doesn’t denigrate this relationship. It merely provides additional tools for the astute financial institution to use to create even more powerful emotional bonds with its clients. Carpe diem!
Mark Gibson is senior consultant at Capital Performance Group, a management consulting firm that provides advisory, planning, analytic, and project management services to the financial services industry. Email: [email protected]. LinkedIn.
Hear more from Mark when he presents along with Mary Beth Sullivan, Managing Partner of the Capital Performance Group at the ABA Bank Marketing Conference, September 24-26, 2017. We look forward to seeing you in New Orleans!