It’s one of those motherhood and apple pie statements that bankers believe without question or critical analysis:
“We’ll do business in the channels our customers want to do business in.”
It’s a tough statement to argue against. After all, if being “customer-centric” means giving customers what they want, then how can one argue that a bank shouldn’t do business in the channels customers want to use?
The situation isn’t so cut and dry. You have to be open to the notion that maybe customers don’t know what they want, that their stated preferences are influenced by what and how you asked about, and that — most importantly — those preferences can be shaped and changed.
What got me started on this is a post on NetBanker called The Missing Tab which states:
“Financial institutions do a good job showcasing products, rates, and available accounts. But shoppers, especially ones not already familiar with you, want to understand what it’s like to bank with you and whether you’ll be there for them if there’s a problem. So along with your usual product and line of business tabs, consider adding a tab on the primary navigation leading to a section highlighting the benefits of your bank or credit union.”
I don’t disagree with NetBanker about the need to beyond product information. What I’m questioning is the “how to do it.”
Imagine that you invited a life insurance salesman into your home to discuss life insurance. Imagine that this salesperson started the conversation by saying “What can I tell you about life insurance?” And then shut up.
Is that any way to conduct a sales meeting? I doubt many good sales people would do it that way. They might conduct every meeting the same way, but I bet they would know — ahead of time — what information they want to get from the prospect, and what information they want to convey to the prospect. And I bet they would have a sense for how to proceed from the start of the conversation to the close.
But most bank Web designers are concerned more with things like placement of content on the page, providing consistent navigation, and what colors are on the page than how to influence the prospect’s decision.
The tab that NetBanker advocated putting on bank and credit union sites may very well be — or should be — a critical part of a prospect’s process for deciding which bank to do business with. But by sticking that potentially critical information under a tab that consumers may or may not click on, the effort to create the tab is potentially wasted.
Can You Train Customers?
Let’s take a broader view of financial services for a moment. Why have consumers reacted so negatively to the account fees that many banks have created? According to Brett King:
“In the US, there are actually people who will tell you that free checking is, or at least should be, a constitutional right. Thus, emotion runs high when a bank suggests that you now have to start paying for the right to keep YOUR money with their bank – it’s an outrageous concept to many! The biggest problem for the US banking industry is that for the longest time it trained customers to believe that this was exactly how they should feel.”
Bingo. We trained consumers to expect free checking.
And if we can train them to expect free checking, we can train them to use them certain channels, and that we can train them on how to make the right decision about choosing a financial provider.
[I imagine that after seeing the word “train” four times in the past two sentences that, like me, you’re a little disgusted at the imagery of “training” people to do something like they were some trained lion in the circus. Sorry for that.]
Training Consumers How To Choose A Financial Provider
I totally agree with Brett’s comment — but I do think that a problem right up there with “training customers to expect free checking” is that when choosing between accounts — free or not — consumers don’t always use the right criteria.
How many times have you seen surveys that show that branch location, and number of branches, were the most important reasons why a consumer chose their bank? This flies in the face of reason and logic (for reasons we won’t go into here).
There are two explanations for this. Consumers don’t understand: 1) How they made their decision, and 2) How they should have made their decision.
The second explanation is what NetBanker’s proposed website tab would address.
But unless consumers are trained to look at that tab — or for that information wherever it is — then it will never become a factor in influencing consumers’ choice of providers.
Create An Online Sales Process
The answer is to create a process or flow on the bank’s site that mimics the flow of a successful sales interaction.
The previous sentence probably made somepeople in banking (and credit unioning) get that little throw-up taste in the mouth. Their distaste for the word “sales” leads them to have an immediate allergic reaction to using their website to “sell.”
They have to get over it. The industry has to train consumers to use different criteria when choosing a financial provider. It has to.
Consumers may do this on their own, over time, I don’t know. But if I were running Marketing at a financial institution, I wouldn’t be sitting around waiting for this to happen.
There’s a huge opportunity for FIs to train consumers on how to make smart decisions by creating an app that someone looking to switch FIs could download and use to gather information about various providers and make an informed decision. The app would likely favor the institution that created the app, but if it wasn’t objective enough, it would be rendered a useless app, defeating the purpose of creating it in the first place.
Maybe a non-FI could create this app, but the potential business model leaves a lot to be desired.
So it’s really up to banks and credit unions themselves to re-train consumers on how to choose financial providers. I tried to get at this in a previous post titled Will 2012 Bring A New Approach To Bank Marketing?
Whatever the new approach turns out to be, I think we need to start by agreeing that the existing approach isn’t working.
Credit unions continue to harp on their so-called service advantage, yet member growth is anemic. What does that tell you? It should tell you that maybe consumers aren’t using the right information to make decisions (if you’re looking at it from the perspective of a credit union exec, that is).
You have to train consumers to make the right decision.