The world of banking has changed dramatically in the last ten years.
Not Yesterday’s Bank
Regardless of the temporary issues of Covid-19. And the most significant change is not consolidation and mergers.
That’s right. Banks don’t seem as important to customers as they once did. At least in the retail banking sector.
As a result, banks are looking for a means to create preference and engage customers.
Advertising has always been the key. But advertising is not as effective as it once was. What happened?
The customer has changed. And the customer’s media choices have shifted.
Print advertising is about dead. Newspapers are dying, and subscriptions are collapsing.
But T.V. viewership has changed too. It is harder and harder to reach prospects in meaningful ways.
Radio is also changing. Drive time spots are increasingly more expensive.
Let’s face facts, most radio advertising just stinks. We would all rather forget everything we heard.
When you ask advertising agencies, they will tell you social media is the answer. As if Facebook, Instagram, Twitter, and YouTube were the great panacea.
Social media sounds excellent on the surface. It is relatively inexpensive, and you can count likes. That’s why agencies talk incessantly about it.
Social media gives agencies a new revenue stream.
They count success in terms of likes and shares. But just because you can count it doesn’t mean it counts.
There is no research to back up claims that social media “likes” increase preference or builds business.
If it mattered, you could predict bank market share based upon social media interaction. Reality tells a different story.
The agency's bank experience is not a great predictor of success. Many times, those agencies execute old ideas and worn-out strategies.
Stealing Share has banking experience too. But, as you will see later, we can’t tie ourselves to former formulations.
Our toughest job is forgetting what worked yesterday.
Let’s talk numbers. At any one time, roughly 10% of banking customers are a little angry with their bank.
The customer made an error or mistake, and they blame you.
But, in three years, less than 1% of bank customers will change banks. And the reason they give is that “I moved.”
Think about this. That 1% is on the decline. Often as not, moving does not require the customer to change banks. And who would want to?
Changing banks looks like a nightmare to customers.
Managing two accounts during the flux period and ordering new checks. You know the drill.
The ad agency will tell you to talk about “things.” And why not? After all, we can see and feel things.
So here is the agency's basic list of what banks promise to get customers to switch:
Competitive rates, lower fees, convenient locations, access to ATMs, no ATM fees, free checking...
...online banking, excellent customer service, and friendly employees, and lower fees.
If the bank is small or regional— they claim that value as well.
The problem is NONE of these are triggers to switch. They simply define your institution as a BANK.
Name a bank that claims miserable employees? No ATMs? Inconvenient locations? No online services and HIGH fees?
Research tells us that none of these are switching triggers. They are if you are a gambler, the table stakes to get in the game...
...you know, the minimum bet you must place on the blackjack table to play. All these just describe “my bank.”
By the way, research tells us that all banks are local.
That’s right. Even if you bank with one of the monster banks, customers refer to their local branch as local.
They might even know some of the employees, and the drive-through window gives Fido treats with the transaction.
No one knows how simple your online process is until they are a customer.
And, no matter how simple you have made the interface, it is more complicated (to them) than what they currently use.
Of course, you must have great customer service. But there is a problem facing banks today.
For most customers and prospects, the best customer service is no customer service.
That’s right. More than 80% want as little human contact as possible.
Customers want to bank online, use an ATM, and transfer their money electronically as they see fit.
They don’t want to TALK with you or interact in any way. Friendly employees are usually most evident at the point of some failure.
If they must talk to someone — well, something has gone wrong.
Managing this long-distance relationship is challenging for banks. Banks simply don’t know how to manage invisible interactions.
Bank CEOs worry about brick and mortar locations. And they are right to worry. On the balance sheet, all of those locations are listed as assets.
But in an increasingly digital world, those branch locations might...
...become the world’s most expensive billboards within the next few years.
Gone are the days when “if you build it, they will come.”
What would we recommend?
No pat answers. Every bank’s market is different. For that reason, we ALWAYS field projectable market research
It's part of our strategic development. We are not talking about focus groups or self-selecting studies...
It’s not that J.D. Power drivel.
Where you GET just what you pay for
We field double-blinded projectable market research
The research lays bare the needs and wants of the physical and EMOTIONAL triggers.
We build your messaging on that research. Our process has effectively repositioned banks and credit unions.
But it’s not our experience that you should covet. Your current advertising agency claims that.
We are NOT an advertising agency.
We are experts in persuasion. We ask the right questions.