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FS Customers are Not a Homogenous Mass: How Can You Take Better Care of the Individual?

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The customer experience is at the heart of every brand’s interaction with its consumer. For financial service brands, experience has become even more important to consumers who are increasingly accustomed to taking more control over their financial affairs – brands are judged by their products, communication and interaction too. Below, Finance Monthly hears from Kirsty Maxey, Managing Director at Teamspirit, and Caroline Bates, Group Board Director at Chime Insight & Engagement Group, who give us their thoughts on how your business can better its brand by investing in the individual.

In recent years, the Financial Services marketplace has changed beyond all recognition. We have seen the emergence of challenger banks, mobile only brands and other disrupters that were once a rarity but are today an everyday experience for consumers increasingly accustomed to taking more control over their financial affairs. Changing regulation means that consumers have no choice but to take decisions they have never taken before, such as in the recent pension freedoms.

Meanwhile, the brands who were hard hit by the credit crunch have by no means gone away. Many are upgrading their back-end service and CRM systems and embracing innovation with as much enthusiasm as the challengers. They are playing to their strengths, using their reach and resources to flex their muscles. Others are seeking a more meaningful connection with consumers, repositioning themselves around their heritage, their values and their social purpose.

At the same time, consumers are no longer merely passive, or even grateful recipients of products and brand messages and are increasingly vocal in their criticism of those which don’t deliver on expectations. The concept of instant gratification, once confined to the FMCG and entertainment categories, has made consumers raise their voices – and brands, likewise, raise their game.

In the light of this change and in the wake of the Referendum, Chime Insight & Engagement and Teamspirit set out to identify the key drivers and dynamics within this new landscape. We sought to understand how consumers feel about Financial Services brands, what their expectations are in terms of brand behaviours and the criteria against which they are evaluating their choices.

To this end, CIE/TS conducted proprietary online research in Q4 2016, surveying a nationally representative base of 2,000 UK consumers on 20 consumer FS brands across multiple dimensions grouped under 4 key metrics named as the four E’s:

  • Experience – ease of interaction and doing business with the brand
  • Engagement – likeability and affinity with the brand
  • Evangelism – propensity to recommend the brand to friends or family
  • Ethics – whether a brand does the right thing even when nobody is looking

The brands included traditional leading banks, insurance and financial planning providers and payment providers and solutions.

Better customer experiences

The study found that consumers are backing financial brands that don’t just do good, but do more. They want brands that put their purpose into action, with better products, better customer experiences and better communication and interaction, not just better ethics.

The best performing brands have taken their social purpose and put it to work as a set of operational behaviours, in terms of the products they develop, the unmet needs they address and the customer experience they deliver rather than a more passive ethos of values and beliefs that sounds good, but ultimately serve little practical purpose.

The top drivers for Experience were:

  • 71% Staff have authority to solve customer problems themselves
  • 67% Help customers manage their money more effectively
  • 65% Easy to use online or mobile service
  • 64% Products can be tailored to suit customers’ specific needs
  • 56% Makes quick decisions

By contrast, being contactable via social channels such as Twitter scored poorly with respondents. Only 13% considered this essential to their customer experience.

This shows how ultimately people want to feel that they matter to the brand and that their problems and needs are the reason why the brand is in business. “It’s not what you do, but what you do for me” is the prevailing theme when it comes to experience

Customers vs non customers

The results also revealed interesting differences as well as correlations in the attitudes of customers and non-customers of the surveyed brands. By giving customer and non-customer audiences equal weighting, regardless of the actual sizes of the audience, we were able to gain new insights into the high scores in the study overall of brands that have very small user bases but big reputations and conversely, brands which enjoy very high penetration but without the corresponding fame.

We were able to use this data to create 4 separate segmentations, which could be applied to each E in turn and also to create an overall market map.

  • Authentic brands – perform well with both audiences
  • Discovery brands – perform better with customers than with non-customers
  • Seduction brands – perform better with non-customers than customers
  • Outcast brands – do not perform well with either audience

Authentic brands included First Direct, Apple Pay and Nationwide. These are the brands that have a high degree of consistency between the external promise and the internal experience. They include Apple Pay, First Direct, Money Supermarket, Nationwide and Prudential

Discovery brands, which included PayPal and LV= are the brands that you need to experience in order to fully understand. In PayPal’s case, for example, it makes perfect sense, because if a person has never used it, they are unlikely to appreciate its security and convenience in any meaningful way.

Seduction brands, which include TSB, Santander and Standard Life tend to be those which have recently raised their profile in the market, through advertising or a new strategy, driving awareness and interest among non-customers whilst it’s business as usual for existing customers.

Outcast brands, which perform poorly with both customers and non-customers tend to be those with a legacy of a poor reputation.

It’s also interesting that the findings around the attributes on which customers rated a brand most highly, were often different to those chosen by non-customers. This suggests that what brands are promising in their marketing messages is not reflected in the customer experience and highlights the importance of ensuring that the brand and its customers are telling the same stories in order to present a united front.

Drilling deeper

The research study also looked at the perceptions of customers vs non-customers individually per ‘E’, that is specifically for Experience, Engagement, Ethics and Evangelism. This provided some interesting insights into consumer attitudes towards these brands and the factors behind what it takes to get an Authentic positioning.

Overall, although customers of all the brands in the survey rated them more highly that non-customers, there were some important differences that help to shed new light on how brands can ensure internal and external perceptions match and that the journey from non-customer to customer is seamless, satisfying and inspires the right storytelling.

When it came to experience, the Authentic brands of Apple Pay, First Direct and Money Supermarket had higher scores for both non-customers and customers than across the 4 Es overall. This would indicate that higher than average expectations by non-customers are matched by higher than average experiences by non-customers. By comparison, Nationwide and Prudential both scored lower for both groups on this measure, although still above average. This would indicate that despite scoring above average for both customers and non-customers, Nationwide and Prudential’s Authenticity is driven by something other than ease of doing business (our experience measure).

For engagement, every Authentic brand except Money Supermarket had a lower (although still above average) score for both customers and non-customers compared to their overall score. This would indicate that likeability is a less influential factor than might be assumed. But it’s interesting that for Money Supermarket, engagement is a driving factor in its Authentic positioning, perhaps as a result of its recent marketing campaigns.

Similarly, for evangelism, all the Authentic brands scored lower than against their overall score, albeit still above average. Apple Pay and First Direct in particular have a much bigger difference between their customers and their non-customer scores for propensity to recommend, showing how both brands rely on their customers to recommend them

By contrast, when it came to ethics, every brand in the Authentic quadrant scored more highly with both customers and non-customers. This contrasts with the broader findings in which respondents were ascribed an equal weight and experience was seen to be the key driver. When we attribute equal weight to customers and non-customers regardless of the actual relative sizes of the audiences, it’s ethics that really matters.

First Direct scored very highly with both groups, but particularly with its customers with 85% agreeing that they do the right thing. Prudential likewise scored particularly highly with its customers for ethics, with an 89% score, showing how its reputation for integrity and reliability as embodied in the Man from the Pru, is still an important part of the company’s brand equity.

Online vs branch customers

We also discovered some key differences when it comes to online vs branch customers. The need for personal attention is considerably more important, with 81% of branch customers considering staff with authority to solve their problems being their most important criteria, but only 30% ranking an easy to use online or mobile service as their number one. This shows how branch customers clearly don’t believe that an online or mobile service is an adequate substitute for a face to face experience and will lack the empathy and personal responsibility they need.

Nationwide performed very strongly on the measure of Experience with 76% of respondents believing that the brand is easy to deal with. This most likely reflects Nationwide’s commitment to being easy to deal with, attributing its mutual status to its customer-centric approach and bringing its ethos to life in its operations. It’s worth noting that Nationwide have recently reverted to calling itself a Building Society again in order to differentiate itself in the market – and create some clear water between it and the banks.

Verbatims from the research bear this out:

“UK based customer care centre, always answer phone quickly and resolve problem/answer query with minimal fuss”.

“Their website is simple to use and when you have a query they get back to you very quickly”

By contrast, branch users rated being told when there is a better deal or offer available and long standing experience in the financial sector more highly. After all, they won’t be able to shop around and keep up to date in the way that online users can, and are unlikely to have connected with the brand via social media, so will be more reliant on brands letting them know directly, in this case, via the branch. What the research shows is that branch customers are just as keen on the latest news and best offers as online users are, so should be looking to their branches as a real-world information hub.

To some extent, this can be explained by the demographic differences between online and branch users, who are naturally older. However, it does illustrate the vulnerability gap that online brands need to fill and need to not only claim, but prove, their reliability in order to be recommended to the older demographic.

Perception is reality

Perhaps the final point worth making is to never underestimate the halo effect of delivering a great experience and having a strong brand image. Both Apple Pay and First Direct score particularly highly among non-customers, demonstrating that perceptions of a good experience can be strong drivers of recommendation, as well as actual experience.

In Apple Pay’s case, as the only brand to score highly among both customers and non-customers, reflects the strength of the Apple brand’s halo effect on perceptions of the product and the attributes that even non-customers automatically associate with it.

All of which comes back to financial services communications benefitting from a clear brand purpose, demonstrated through behaviours. It gets both customers and non-customers talking and leads to brand evangelism. It doesn’t get better than that.

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