Are Financial Services Firms Emotionally Tone Deaf?

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In their book Made To Stick, the Heath brothers tell of a study that was done to understand the role of emotion in decision making. In this study, people were given $5 to take a survey. They were then given one of two letters about a charity that they were asked to donate some portion of that $5 to.

One version of the letter was the rational version — presenting facts and statistics about the need for contributing to the charity and what the charity does. The other was the emotional version — it told about the little girl in Africa that would benefit from the charitable contribution.

On average, people who received the first letter contributed $1.14. People who received the second contributed twice as much. Here’s where it gets interesting, though. As a follow-up, they gave some participants both letters — combining the rational and emotional appeal — but they only contributed an average of $1.43. The researchers concluded that:

Thinking about statistics shifts people into a more analytical frame of mind. When people think analytically, they’re less likely to think emotionally. The mere act of calculation reduced people’s charity. Once we put on our analytical hat, we react to emotional appeals differently. We hinder our ability to feel.”

My take: It’s not that financial firms don’t understand this. Instead, they: 1) don’t understand which emotions they should appeal to; 2) are inconsistent in their use of rationality and emotion in their sales and marketing processes; and 3) overwhelm customers with choices leading to analysis paralysis.

It seems like every financial services firm wants to be seen as an aspirational brand (btw, doesn’t even recognize “aspirational” as a real word). Examples: Ameriprise with their Dennis Hopper-inspired “achieve your dreams” ads, and Bank of America with their “looking at the future” ads.

There’s nothing inherently wrong with playing to the “hope” emotion. But it’s not the only emotion that could be relevant to a customer’s decision. Security (the feeling of being secure) is an emotion that firms like Citibank have appealed to, but while that be an important emotion for some customers, I have to wonder how effectively that emotion can be played to in an ad. In fact, I would argue that in order to sell some financial products, both of these emotions are the wrong emotions to appeal to.

I believe — based on consumer research I’ve done in the past — that there are three primary emotional drivers driving consumers’ choice of financial firms:

1) Benevolence: The feeling, on the part of customers, that the people in the firm they’re dealing with is helpful, friendly, and kind.

2) Trust: The feeling, on the part of customers, that the advice, guidance, and recommendations they get are in their best interest, and not the best interest of the FI.

3) Convenience: The feeling, on the part of customers, that the firm they’re dealing with is as easy to deal with as possible.

Besides Citizens Bank (in the northeast), who has appealed to the first emotion in their branding efforts, I’m hard pressed to name firms that have appealed (effectively) to these emotions.

Why are firms ignoring these emotions? I’m inclined to put the blame on their agencies, who push their clients to be “aspirational”, but can only come up with “hope” as the only aspiration.

If it weren’t bad enough that financial firms are appealing to the wrong emotions, they’re often inconsistent in their sales and marketing approach when it comes to balancing emotion and rationality.

Walk into most any bank branch, and sit down with most any bank branch rep and start talking about products. What will you hear? Rates. Look up at the signage in the branch. What will you see? Rates. What happened to the emotional appeal? Maybe they think the emotional appeal is only good for getting people in the door, but that once they’re there, rationality takes over.

I don’t think so.

But this is what happens in the sales process — firms shift the prospect’s focus from emotional to rational. And then what happens? The bank either: 1) overwhelms prospects with choices (go ahead, count up the number of checking account or mortgage options your bank offers), or 2) only presents one option (usually the one the branch rep knows best, or worse, is incented the most to sell). In the first instance, the prospect is paralyzed and can’t choose, and in the second, being in an analytical frame of mind, they begin to believe there must be other valid options, and opt not to choose.

Bottom line:
Sales performance suffers.

Emotionally tone deaf may not be the best term to describe the problem. If you’ve got a better description, let me know. But I do believe that regardless of the right description, there are a lot of financial firms out there — both big and small — that have a long way to go to becoming better, more effective marketers and salespeople.

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