With the big swing to digital banking, some institutions worry they have lost the emotional connection with consumers they had pre-pandemic, when people still frequented local branches.
For TD Bank, which continues to maintain a strong branch presence up and down the East Coast, this was a particular challenge.
It’s not that TD bank isn’t tech-savvy. Tyrrell Schmidt, U.S. Chief Marketing Officer and Head of Brand, says that almost nine out of ten (88%) of their customers prioritize the bank’s online and mobile tools. However, much of TD’s customer acquisitions and experiences still come from the bank’s 1,100-plus branches. Over 70% of customers still consider physical locations a crucial part of their experience.
Managing that balance of digital and physical has been a key focus for the bank’s marketing team.
“We’ve seen many examples in the past of financial institutions that didn’t stay up with what was going on in the environment and who aren’t here any longer. You have to change,” Schmidt said during a Banking Transformed podcast interview with Jim Marous, Co-Publisher of The Financial Brand and CEO of the Digital Banking Report. The CMO added that the leaders at TD Bank have been very open to making changes.
Schmidt joined the U.S. side of TD Bank in August 2020 after five years in various executive roles in the bank’s Canadian operation.
Building the Brand Experience Virtually
The New Jersey-based bank, part of Canada’s Toronto Dominion Bank, has a reputation for its heightened focus on customer experience, which has earned it accolades. Even in 2007 when it absorbed Commerce Bank, a bank renowned for an emotional connection with its customers, TD Bank worked hard to continue Commerce’s legacy.
“One thing where Commerce Bank was really, really strong, in addition to the overall brand experience, was the community experience,” Marous explains. The bank was known for handing out pens and dog biscuits, their seven-day-a-week branch hours and their overall friendliness.
Some of this reputation for brand experience stems from TD’s investments in its employees. The bank prides itself, for example, on its “unique culture,” says Schmidt. Over time, it has become difficult to maintain that culture, given that everyone is “in front of screens all day.” As a result, she spends “inordinate amounts of time” in conversations with her team about how to get in touch with people virtually and how to make sure they still feel they can connect with the company and the brand.
As Schmidt observes, consumers are spending in excess of seven hours a day, on average, on multiple media platforms. “Convenience in banking must now expand beyond store-centric factors to delivering digital convenience, with speed, simplicity, and empathy.”
Is Brand Loyalty Defunct?
For several years, there’s been a debate over whether loyalty still exists in the banking industry. Schmidt strongly believes it does.
“In fact, in light of more choice and higher consumer expectations, companies actually just have to work harder to earn loyalty and to retain it in financial services,” she insists. “In particular, we know that trust is a really key driver of loyalty. Consumers are trusting us with their money, they’re trusting us with their aspirations for the future. Trust is such a key part of loyalty for our industry.”
In order to have a ‘sustainable future,’ Schmidt maintains the personal connection must be a frontline strategy for financial institutions, especially during the pandemic, which she notes pushed the throttle on that trend forward. This is more than a friendly greeting, however, whether that is in-person or by chat. It ties in directly with the broader concept of brand purpose.
“Colleagues want to work for a company whose values match their own,” she explains. “Purpose has never been more important. To me, it’s no longer simply something some companies differentiate themselves on. Every company has to be purpose driven.”
Purpose doesn’t just matter to employees. Customers expect it too. Schmidt notes that she has seen statistics suggesting at least three out of five customers (60%) value how brands behave, and that what they see will ultimately influence how they think and make purchases in the future.
A report on consumer culture by 5W Public Relations supports that. It found that more than seven out of ten people will buy from brands that align with their values.
Take it back to the giveaway pens that were a key part of TD’s — and Commerce Bank’s — marketing strategy for years. Many other financial institutions have similar traditional branding strategies. However, some of those marketing tactics might have to evolve a bit.
“We continue to give out many, many, many pens, but just recently we started to make them from recyclable water bottles,” Schmidt explains. “We make sure that we’re really focusing on the environment and doing the right thing while still giving out those things that our customers have come to expect.”
Sad, But True:
Positive experiences in one area can quickly be undone by frustrations with simple digital processes, like online account opening.
It’s not just all about the material representations of the brand. Even a positive emotional connection will go poorly if people get frustrated by the touchpoints in any of their bank’s processes. One of the biggest points Schmidt and her teams have studied are the number of steps in which it takes people to apply for accounts online.
“We use things like conversion funnels and look to see where people are dropping out and then go into those breakpoints and make sure that we’re addressing any challenges,” she points out.
Change the Narrative
Even after first acquiring new customers, it can be difficult to retain them long-term. Marous asked Schmidt how the bank is able to keep that “warm, fuzzy feeling” that won TD Bank — and Commerce Bank before it — the love of customers.
As contrived as it may sound, the lingo a bank’s marketing team creates can shape that customer perception. “You’ll often hear our CEO say ‘TD is not in the business of selling a mortgage or signing one more checking account. We’re actually in the business of helping people become homeowners and enabling them to meet their goals,'” Schmidt says.
This shift in the dialogue between the bank and its customers was spurred by research conducted by Schmidt’s predecessor. Surveys found that almost three-quarters (74%) of consumers “felt that their banking relationship was purely transactional.”
“We want to challenge that perception,” she explains. “So, we’ve always been the bank that really prides ourselves on being different from the other banks and to really redefine banking by creating those connections with our customers. Also, in our communities we continue to deeply believe in having that local connection.”
Create a Deeper Connection:
People want to connect with their bank and vice versa. But almost three out of four consumers see their banking relationship as ‘purely transactional.’
The local connection Schmidt refers to is starting to die out in the banking industry as financial institutions condense their branch footprints. Even TD Bank has been an illustration of that as the bank announced in early 2021 that it would be closing the doors on 82 of its U.S. branches.
To counter the impact of that, the bank has spent marketing resources on building out its small business portfolio, which has been crucial following the Covid-19 pandemic, the CMO maintains.
“We’ve sent reopening kits to our small businesses, just as a bit of a surprise and delight,” Schmidt says. “We wanted them to know that we were there for them. We also did programs to tell our customers how important it was to support their local small businesses.