Millions of Americans have filed for unemployment benefits since the COVID-19 recession began. Many small businesses owners wonder if they will survive. So it might seem counterintuitive for financial marketers to even ask the question: Is now the best time to make an active play for new business and consumer relationships and to cement loyalty with those we already serve?
Counterintuitive though it might seem, it may just be the right action for the situations our nation finds itself in. At a time when consumers and businesses are clutching their dollars ever more tightly and poring over budgets with increasing scrutiny, they may find themselves asking, “Is my financial institution the right partner for me (or my business) during this challenging time?”
The financial institutions that come out of this economic crisis strongest will be the ones that go furthest to make the answer a clear yes. They must hold out the promise of that kind of relationship with those who have felt let down by their institutions — and deliver on it.
Satisfaction with their primary banking institutions during the ongoing COVID-19 period is hardly unanimous among Americans. For several months J.D. Power has been conducting its Financial Services COVID-19 Pulse Survey. Results have been pretty consistent, with the late May ratings as follows:
- Excellent 12%
- Great 22%
- Good 39%
- Just OK 23%
- Poor 5%
These results suggest that at least one in four Americans may be open to being wooed by new providers.
4 Ways to Sink a Banking Relationship … and 4 Ways to Improve It
Consider these hypothetical situations that would be particularly damaging to a financial institution during our current situation:
1. PPP Nightmare: A small business owner has an awful experience applying for the Paycheck Protection Program (PPP) with her bank. It’s unclear who the business owner can call and the bank is unresponsive. An automated system is generating confusing notifications about the status of her application and she feels she has nowhere to turn. She can’t get answers. Her application is delayed.
2. Misled About Relief. A recently unemployed borrower falls behind on his loan payments and receives multiple calls from a loan collection officer who does not mention anything about possible forbearance or deferrals.
3. Quick Trip to a Closed Bank. An elderly customer steels herself to venture outside at incredible personal risk because she needs to visit her neighborhood branch. She arrives there only to find it closed.
4. Clueless Communications: A long-time customer continues to receive statements and automatically generated cross-sell emails, but no communications concerning the ongoing pandemic.
At best, none of those behaviors will generate loyalty. At worst, they will make people receptive to change.
Now, take these hypothetical scenarios of banks behaving in a polar opposite manner:
1. PPP Dreaming: In applying for PPP, a business owner gets responsive service and clear answers from his relationship manager. When he has questions, his banker replies quickly and with a personal touch. His application is submitted on time and his loan is funded.
2. Clued-In Communication: A relationship banker reaches out proactively “just to check-in” and make sure the consumer is aware of the institution’s ongoing COVID-19 programs, resources and new lobby hours during reopening.
3. Out-of-the-Blue Green. A newly unemployed worker gets a friendly offer in the mail for a hardship loan with a competitive interest rate from an institution that she’s always known of but never really considered.
4. Reaching Out to Help. A longtime customer receives a personalized email from his bank acknowledging the current crisis, updating branch hours and sharing supportive online resources.
Which institutions would you choose to do business with?
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People’s Lives are Changing. Financial Institutions Must Help Them Cope
Ultimately, the financial institutions that rethink the status quo in terms of their marketing and customer relations are the ones that will succeed in today’s rapidly changing markets. This has not always been the case. For years, many banks and credit unions have rolled out the same off-the-shelf programs, and these “tried and true” efforts have consistently driven business because banking hadn’t changed significantly in a long time.
While it is true that trends in technology have been shaping innovations for some time now, the forces related to current events are compelling an even more rapid transformation. 2020 has brought with it a “new normal.”
Both unemployment and remote work have been surging. Institutions are changing their branch hours weekly. Long-ossified daily routines of living and working are in flux. The most important thing financial institutions can do in response is demonstrate to their customers that they understand and want to be part of the solutions.
Address the continuing impact of the pandemic on your homepage, and, if you haven’t already, carve out a section of your website dedicated to new hours, digital banking, hardship response, and ways for customers to avail themselves of support. Adapt the scripts your call center employees use to guide telephone conversations with consumers. Proactively contact customers to provide updates, offer support and show empathy. Make and publicize corporate giving to apolitical causes, perhaps those that fund food and medical relief in communities in which you operate that are distressed by the pandemic.
The bottom line is that now, more than ever, financial institutions should be focusing on reminding people that they are here to serve.
We don’t know yet whether changes related to this pandemic are temporary or permanent. But one thing is clear: Financial institutions that nimbly respond to the pressing concerns of their consumers and businesses will weather the storm better than those that carry on with old-line businesses and practices as usual.