Building trust with consumers takes time; being proactive about customer retention is a wiser move than relying on a reactive contingency plan in case of disaster. There’s no better way to establish trust than by nurturing a strong relationship, and gifts act as a physical representation of that relationship. Reestablishing lost trust is much tougher, especially if customers can jump ship to a competitor.
Just ask Wells Fargo.
In a widely publicized gaffe that cost the company $185 million, Wells Fargo employees were coerced into meeting sales targets, forcing thousands of banking products on unknowing customers. The bank is still determining the total extent of the damage inflicted over the past seven years — early estimates put the figure at 2.1 million accounts.
This scandal inflicted a two-pronged wound on Wells Fargo customers: the immeasurable financial damage and the sense of betrayal. And with the incident coming hot on the heels of the Great Recession, public confidence in traditional banks has plummeted. Gallup reports that only 27% of Americans have confidence in banks, a significant drop from 49% in 2006.
Fostering Relationships With Gifts
So how can financial institutions regain their customers’ confidence? Issuing a press release, changing up corporate structure, and publishing reports do little to assuage the concerns and hurt of everyday consumers. Tangible gifts can go much further to right a wrong or simply strengthen client relationships; they acknowledge a company’s commitment to its customers. Even small gifts, when personalized, can help show clients how much you value them.
While small gifts might not help Wells Fargo completely repair the damage, a larger show of generosity might. If, for instance, it were mandated by the courts to repay each customer touched by the incident $100, but it deposited $1,000 in each affected customer’s account instead, the extra money could assure its customers it made ethical reforms and that it valued their loyalty. Going beyond the minimum in a negative situation could be enough for some customers to decide to give it a second chance.
When a company makes an error, the damage is not merely financial for customers, especially when the company in question is a bank. It’s an issue of trust and feeling confident that their identities have not been compromised. Having a “What’s the most we can do in this situation?” mindset (or rather, putting your money where your mouth is) will help restore trust and rebuild customer relationships. A show of genuine goodwill and remorse could go a long way in making clients think your business may deserve a second chance.
Gifts: Not Just for Apologies
As with any personal mistake, it’s one thing to apologize, but it’s another to truly show that remorse. Even if you have a long way to go before you can actually prove you’re sorry, the least you can do is make an investment and put in the time and effort to make amends. It shows a level of commitment to walking your talk and showing that you’re sorry — not just saying it.
But you shouldn’t simply rely on gifts when you’re making up for some wrongdoing, intentional or accidental. Gifts shouldn’t be an afterthought; they should be a physical representation of the value of a relationship. Here are four other circumstances in which financial institutions should consider giving their clients gifts.
1. Thanking Your ‘Regulars’
No business could exist without its customers, and financial institutions are no exception. Show your customers that their loyalty is valuable; don’t just tell them. And when you show that appreciation with a personalized gift, your customers are sure to remember it.
TD Bank, for example, rewarded key customers by inviting them to various branches, supposedly to give feedback on the new design for the bank’s ATMs. Instead, the ATM dispensed personalized gifts to each pre-selected customer, ranging from cash to Toronto Blue Jays fan memorabilia to college tuition.
2. Celebrating Milestones
Your organization and its employees surely celebrate company milestones, but do you include your customers in that celebration? When you reach a groundbreaking number of clients or celebrate your company’s 20th year of operation, include your customers in your festivities.
You don’t have to give each of your many customers monogrammed briefcases; something small will still make them feel included and like a valued member of your organization’s community. Ally Bank, for example, emailed its customers a thank-you video when it hit 1 million customers. Not only that, but it selected 2,300 customers randomly to receive Amazon gift cards — which matches the number of days Ally Bank existed before hitting the milestone.
I preach against gift cards when working with higher-end, influential customers, but banks have masses of clients. Plus, the fact that this was a complete surprise makes it a win. Proof positive: The bank is still going strong. In 2016, it reported total deposits amounting to more than $70 billion, a 15 percent increase year over year.
3. Commemorating Customers’ Special Days
There’s no better way to make customers feel like valued individuals than by recognizing the special events in their lives. Whether it’s a birthday, an anniversary, or, even better, “just because,” showing clients that their financial institution pays attention to important dates helps them feel a personal connection with it.
And while some may feel that this isn’t the best use of company money, top financial advisors disagree. 71% give their clients a gift at some point during the year.
4. Opening a New Account
Don’t wait until a client has proven his loyalty to wow him. Use a brand-new account as a chance to set the standard of customer service your clients should expect when working with your institution. Just make sure it’s done as a surprise versus an incentive.
Perhaps you can offer a cash bonus or a discounted interest rate for those first starting their journey with your team. Some banks offer additional incentives, though, including airline miles and special accounts to help prepare for the burden of a child’s college tuition.