In Banking, Your Service Is Not What Differentiates You

Ask any bank or credit union in America what differentiates them from other financial institutions and invariably their answer will be “service.” They all emphatically declare, “Service is what differentiates us! Service is what our brand is about!” Here are four reality checks that should encourage your organization to look in the mirror and be honest.

Reality Check #1: As a financial service business, your service has to be good. If it isn’t, you’re out of business.

Of course “service” distinguishes financial services firms from one another. “Service” is, in essence, the “product” service firms produce. If you’re going to differentiate around “service,” you have to be a lot more specific and work a lot harder to define precisely how your service is different and why it is any better. The unique style and flavor of “service” is what differentiates each and every service business in the world.

What if you asked a car company what made them different from all the other car companies and they told you “our cars?” It sounds ridiculous, don’t you think? It dangles a question so obvious and implicit, it’s insulting: “Precisely how are your cars different?” And yet this logic doesn’t seem to apply to financial institutions. There are very intelligent people who never question precisely how their financial service firm’s “service” is any different from anyone else.

“We’re personal.”

Guess what? That’s what the other guy says too.

“We truly care.”

Ditto.

It’s not just players in financial services that struggle with this. It’s something that every service firm in every industry wrestles with — from plumbers to dentists.

Reality Check #2: If everyone says “our service is better,” someone is lying.

Service may be what your organization does best, but that doesn’t mean your service is comparatively better than anyone else. Even if it is true and the level of service at your financial institution is indisputably extraordinary, “service” is so commonly used by financial institutions as a primary brand theme that it is essentially impossible to differentiate around. You can’t take your claim to “better service” out to the public because your me-too message will be lost in the chorus of self-delusional financial institutions. Consumers, unable to sort out who is telling the truth and who is making shallow promises, simply tune everyone out.

Despite what you may believe, all the banks down the street aren’t mean and evil. They have nice people with generally good intentions. They say hello and smile at their customers, just like you do. They have customer service training. Yes, they occasionally drop the ball, but so do you. You’re fooling yourself if you think you can be nicer than the competition.

Reality Check #3: Saying “service is what differentiates us” is usually a cop-out and a roadblock.

If you ask any financial institution to describe what makes them unique without using the word “service” and you’ll come up empty-handed nearly every time. It’s as if banks and credit unions land on “service” and then never go any further or dig any deeper. It’s lazy. It’s a cop-out that enables financial institutions to dodge the hard questions. Are we really any different?

It’s easy to understand how the notion of “service” gets picked by boards of directors and management teams as the central brand theme for their financial institutions. For starters, it sounds good. Who can argue with “service?” It feels good. Throw on a few zingy adjectives like “premier,” “extraordinary,” “exceptional” or “world-class” and watch heads nod in unison around the room.

The belief that “service is what differentiates us” is the single biggest and most-common roadblock preventing financial institutions from developing a truly differentiated brand strategy.

Reality Check #4: Exceptional service does not necessarily mean providing a Ritz Carlton/Four Seasons experience.

A broad, general “service” strategy often leads HR departments to hire consultants who promise to train staff how to deliver the kind of phenomenal, world-class service one finds at the Ritz Carlton or Four Seasons hotels. That may sound great, but it only works if you target rich people who are willing to pony up big bucks and pay premium prices for VIP service. It’s an operational and fiscal reality: it costs more (a lot more!) to provide world-class service, which is something fewer consumers can afford.

Furthermore, it’s erroneous to assume great service always equates with 5-star, red carpet treatment. It’s not simply a matter of going above and beyond and bending over backwards. There are a lot of other factors that people use to define a quality service experience — speed, level of knowledge, responsiveness, ability to customize/personalize, dependability, etc.

Think about Southwest Airlines. No one feels special when they fly Southwest Airlines. You’re not part of the jet set, you’re flying the low-cost “bus of the skies.” And yet consumers love the Southwest brand because it is the most fun airline out there. Southwest’s sense of humor, funny personality and jocular attitude is what distinguishes their service experience. Their brand is about making an otherwise miserable experience fun.

How come there isn’t a bank or credit union with a brand similar to Southwest Airlines? A brand built around fun? What’s stopping them? Perhaps it’s that they all still believe it is their “service” that separates them?

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