Published on May 10, 2012
ISSUE 6 - May 2012 viewpoint Keeping you connected to today’s UK financial services marketWelcome to the sixth edition of Within financial services we trade institutions they can trust andviewpoint, Harris Interactive’s upon the relationships that we which provide good value, as canUK financial services newsletter. hold with our customers or be seen in the table below. clients. We all know these What may be more of a revelationIn this edition of viewpoint we discuss relationships are formed and is that after providing an excellentmanaging stakeholder relationships. re-evaluated on a constant basis service it is the softer more depending on how well weWith a focus on consumers, we discuss emotional characteristics that service customer needs.customer needs and how well the dominate. For example,banking sector manages the different However, what do consumers consumers are also looking fordimensions of customer relationships, really want from a financial financial institutions that treatmaking comparisons with the rest ofthe industry and other service based services provider? How well is the customers fairly, act responsiblysectors. banking sector performing? And and have friendly staff. Given that how well does it compare to other these ‘emotional’ needs are soThis edition was researched and written by sectors within the industry and prevalent it leads me to ask the Philip Brooks, Senior Associate Director, beyond? question, how many financial Financial Services Research Team. organisations are actually focusing firstname.lastname@example.org Understanding Customer Needs on such needs, when designing It’s no surprise that consumers their products, services or want to deal with financial communications? All bank Consumer needs when selecting a account Consumer needs do vary bank by bank, financial services organisation holders examples of which are listed below: They are trustworthy 74% They provide good value 74% They provide good value financial services organisation Importance when selecting a They provide excellent service 67% - First Direct 86% They treat their customers fairly 67% Treat customers fairly They really care about their customers 55% - the Co-operative 84% They act responsibly 52% Really care about customers They staff are friendly 48% - the Co-operative 73% Offer a wide range of products & services 38% Wide range of products / services They are ethical 36% - HSBC 49% They are relevant to you personally 32% They are up-to-date 30% Ethical - the Co-operative 65% They have a large branch network 27% They have a strong online presence 21% Strong online presence They are a leading company 19% - First Direct 36% Base: All those with a bank account (1,918) - Respondents could select up to ten attributes from a list of 19 For more information on our financial services research practice visit:| www.harrisinteractive.co.uk PAGE 1
Issue 6 | May 2012Continued from page 1... viewpointWhat stands out and signals the similar differences by brand exist. In Managing customer relationshipsimportance of these ‘softer’ traits to particular the AA, Tesco and LV= effectively is not simply aboutme is that offering a wide range of stand out from the crowd within integrating the latest technology orproducts and services is only slightly motor insurance. software, nor is it just about datamore important than being ethical. mining and finding out who your So even on the most basic level we most profitable customers are. NorIn fact being ethical and relevant to can see the power of brand and dare I say it, is it about a marketyou personally is more important communications and how they have research project. All of the abovethat being up to date, having a large a role to play managing the are simply enablers.branch network or having a strong customer relationship.online presence. When you actually sit back and They help set customer expectations consider what you are trying toThere was a time when being big, even within those categories that manage, i.e. what customers think,having a large retail branch network many see as a commodity product. how they feel and how they will actand large number of cash machines Of course, we have to accept that in the future you begin to see thewas particularly attractive; in fact there may be a bit of post enormity of the task. Mostthat is how I chose my bank. Today rationalisation here. Despite this, businesses can target effectively andthose needs are less prevalent and clearly some banks are attracting design products to meet rationalconsumers are now looking for customers who have distinctive needs, but unless a business trulysomething different, and needs do rational and emotional needs. understands what makes theirvary bank by bank. customers tick, it will struggle to Managing Customer Relationships connect emotionally.Some are looking for a deeper Many organisations talk about howemotional relationship with their they have ‘consumer centric’ Effective customer relationshipbank, one that goes beyond trust processes, some even shout about management is not a process, it’s aand fits with their lifestyle and how they have recently integrated culture. That’s why alongsidepriorities. Some others simply want their legacy systems into a single welcoming innovation and change,a bank that delivers good products customer voice or have developed a having customer centric values suchand services, the channels of customer segmentation to help as fairness, trust and respectdelivery are far less important. them effectively target profitable engrained into the ethos of an customers. organisation are so important for aWhen analysing consumer needs bytheir main bank, it is clear to see Engagement is just one ingredient of Employee Performance andthat the communication strategies of Organisational Successboth the Co-operative and FirstDirect are working. Both have eithermanaged to attract customers Selection Direction Engagement Effort Enablementaligned to their strategy or have Attract, select, You know You want to You’re trying Work systemseffectively communicated what they on-board, exactly what do it because your absolute and support promote the hardest to you are fully maximisestand for to their customer base and those that organisation bought in deliver for your effi- is out tomake it an important point of best fit your achieve and rationally and success ciency culture and what part you emotionallydifferentiation. values playInterestingly, within the credit cardand general insurance markets, For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 2
Issue 6 | May 2012Continued from page 2... viewpointfinancial services company thesedays. Harris Interactive Stakeholder Relationship Framework Overall Likelihood toIt’s only when customer centric Performance Recommend Likelihoodvalues become part of the Rational to Continueorganisation’s DNA that we can Index Usingtruly begin to see throughcustomers’ eyes, design products Customer Relationship Intentional Vendor ofand services around their holistic Score Index Choiceneeds and begin to understand andimprove the third dimension of the Competitive Emotionalrelationship which is how they Advantage Index Ensures aintend to behave. Value Me as Trustworthy Unique a Customer Relationship benefitIt’s not just the sales, marketing andoperational teams that have a role How the Financial Services Sector Performsto play here. The HR department Relationship Rational Emotional Intentionalalongside Finance (both often Score % % % %overlooked) have critical roles too. Banks 52 49 51 54The HR department not only needs Credit Cards 49 50 46 50to carefully develop the desiredbusiness culture, it also needs to TV Subscription Companies 48 47 43 53maintain it by recruiting and training Mobile Networks 48 49 44 51individuals that share the samevalues and behaviours. Both tasks Home Insurance 45 46 45 43are a lot more difficult than they Car Insurance 43 47 44 41sound. Finance needs to ensure allfinancial information is up to date, Energy 38 37 38 39accessible and most importantly in aformat that people understand. overseas call centres and general today? Using our StakeholderIt’s the collaboration of all these outsourcing of back office Relationship Framework, we placedfunctions that helps an organisation administration. some questions on our Harris Poll.maximise its success. A businessthat works in silos is mortally The media has also had a field day Despite the current negativedoomed. as the big banks cut back on their perceptions of the industry, when retail branch networks, leaving some comparing to other service basedSo how well does the banking towns without a bank alongside past sectors the banks certainly holdsector perform? scandals of irresponsible lending, their own.Historically, the banking sector PPI, overdraft charges and ATMcannot claim to have a strong charges. Rationally, apart from the muchreputation for service and putting maligned energy sector, there is verycustomer interests first. We were But how do consumers think, feel little difference across the board.one of the first sectors to embrace and act towards their main bank Banks are particularly strong For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 3
Issue 6 | May 2012Continued from page 3... viewpointemotionally, and outscore both the Overall Relationship Scoremobile and TV subscription sectors,which may be deemed moreengaging. Regardless of the The Co-operative First Direct Nationwide All Banksbaggage that the banking sectorhas, it is clear customers still have 76% 67% 66% 52%faith in their own bank which is Rational - 73% Rational - 71% Rational - 62% Rational - 49%perhaps something the industry - Satisfaction 71% - Satisfaction 56% - Satisfaction 81% - Satisfaction 76%should use in some way. Clearly - Recommend 65% - Recommend 66% - Recommend 53% - Recommend 43% Componentsenticing customers with cinema Emotional - 77% Emotional - 57% Emotional - 67% Emotional - 51%tickets, film downloads and giving - Values me 80% - Values me 61% - Values me 64% - Values me 49%priority to concerts is not as - Trustworthy 74% - Trustworthy 54% - Trustworthy 70% - Trustworthy 52%successful as general day to day Intentional - 78% Intentional -70% Intentional - 68% Intentional - 54%interactions at building an - Provider of Choice 81% - Provider of Choice 84% - Provider of Choice 75% - Provider of Choice 61% - Continue Using 86% - Continue Using 73% - Continue Using 74% - Continue Using 63%emotional connection, even if they - Unique benefit 69% - Unique benefit 54% - Unique benefit 55% - Unique benefit 36%are delivered at an arm’s length.So who is leading the way withinthe banking sector? How would you rate your bank in each of the following areas?The Co-operative, alongside both The service they provideFirst Direct and Nationwide are Treating you as an individualperforming much stronger than the Ability to solve problemsrest of the sector (as can be seenopposite). Value for money Clarity of communication All BanksAll have succeeded in targeting Responsivenesscustomers who have particular Understanding, empathy of staff The Co-operativerational and emotional needs. They Staff knowledge First Directhave also effectively communicated Relevance of communications received Nationwidewhat they stand for and have Staff professionalismdelivered against it. Interestingly, Range of products/services they offerthe Co-operative, First Direct and Offer new/innovative products & servic esNationwide are the only banks who Ease of communicating with themcan really claim to provide a unique Amount of communications receivedbenefit to customers. 30 40 50 60 70 80Having something distinctive about % Excellent/Very Goodyou is obviously beneficial from abrand and acquisition point of view, When looking at the performance performs best on the majority ofbut it also helps in terms of data above and comparing it to the attributes?maintaining customer relationships. overall relationship scores above, itIt can act as a permanent reminder leads me to ask the questions? • Why is the relationship score foras to why a customer joined you in Nationwide so close to First Direct?the first place and therefore help to • Why is the Co-operative leadingreduce churn. the market when First Direct clearly First Direct has clearly created a For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 4
Issue 6 | May 2012Continued from page 4... viewpointwhole proposition based around Role of Communications professionalism of staff. Despitebeing transparent and delivering a However, we must not underplay this, NatWest is yet to prove thatstrong service. However, the the role of communications within there is anything unique aboutemotional bond it has with its the financial services sector. having a relationship with it.customers is not as strong, perhapsdue to its ties to its bigger parent Communications play a massive role Customer relationships arecompany, and its route/channel to not only in acquiring new business constantly re-evaluated based onmarket. Interestingly the levels of but also in helping to reinforce the what they see, hear and experience.trust for both HSBC and First Direct key reasons why a customer As the industry reduces facetimeare pretty much identical. selected the organisation in the first with its customers and as direct place. interaction reduces, serviceConversely Nationwide, perhaps perceptions will become more anddue to its mutuality, has created a NatWest through its customer more the reality. Companies needstrong emotional bond with its charter and its ‘Helpful Banking’ to be as consistent and memorablelevels of trust and although its campaign, clearly is using as possible when they are deliveringservice is not at the same level as communications to help reinforce people based service as itsFirst Direct and the Co-operative it key brand messages amongst its importance is likely to beis still well ahead of the industry customer base and it appears to be heightened for consumers.average. If the Nationwide can working.build on its current performance As the ‘human touch’ reduces,and get more customers to NatWest has started to pull away service failures will be rememberedrecommend it, it will be in a very from the other major players on for longer as the next staffstrong position indeed. both rational and intentional interaction could be a year or more dimensions. Its communications away. Ask yourself, when was theThe Co-operative has created a have also been supported by higher last time you went into your localcompelling proposition around its performance scores for branch or contacted your bankethical and sustainable behaviour, responsiveness, relevance of by phone? Therefore, more thandeveloping a culture that is communications and ever before, to ensure healthyembedded into its DNA. It has donean excellent job bonding withcustomers on all three dimensionsrationally, emotionally and All Banksintentionally. Rational: 55% Satisfaction Likelihood to 52% recommendThere is no doubt the Co-operative’s 61 Relationship Rational - 49% 48positioning has helped to create a Score: - Satisfaction 56%strong emotional bond with its Emotional: 54% - Recommend 43%customers. The Co-operative does Values me Trustworthy Emotional - 51%things differently, it provides a 56 52 57% - Values me 49% - Trustworthy 52%unique benefit to being a customer Intentional: 61%and its service is also perceived to Intentional - 54% Provider of Continue Unique - Provider of Choice 61%be very strong. choice using benefit - Continue Using 63% - Unique benefit 36% 72 75 36 For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 5
Issue 6 | May 2012 viewpointcustomer relationships are there is the support available if growth. As such customermaintained it’s important that something goes wrong. relationships certainly cannot befinancial organisations deal with explained by a single metric.customer complaints well, through That’s a prime example of how youmultiple channels. can successfully manage relationships in a service basedSocial Media industry following a negative Researched and written by PhilipWhilst you can control what you say experience. From a very quick scan Brooks, Senior Associate Director, Financial Services Research Team.about yourself, it is important to of Twitter I noticed First Direct, email@example.com and manage what NatWest, Virgin Money and the Twitter: @MrResearcherpeople are saying about you. Co-op all actively doing the same thing. I only managed to find aWho remembers in 2007 HSBC handful of insurers, which ishaving to abandon its plan to scrap disappointing, and even fewer credit To find out how we can help yourinterest-free overdrafts for students card companies. organisation measure itsleaving university due to a facebook Stakeholder Relationships contact:campaign – I think this was the first A poignant tweet byinstance of social media changing @MarketforceRB about a paper Debbie Seniorthe policy of a financial organisation. delivered by @rodbutcher at a Senior Consultant, Stakeholder recent conference really drove this ResearchHowever, negative interactions with home to me “Gone are the days firstname.lastname@example.org via social media can lead when we can choose when and howto a positive final outcome. we receive customer feedback.” John BackhouseRecently, I wasted a day sitting at Senior Associate Director,home waiting for a BT engineer to So how can we improve the Employee Insight and Performanceturn up and I was struggling to get relationships we have with our email@example.com situation resolved. Born of customers? Clearly we need tofrustration, and to be quite honest ensure products and services meetwanting some sort of revenge, I customer needs and expectations, Links to further information:tweeted about the negative but relationships are more holisticexperience I was having. and complex than that. Organisations Stakeholder Relationship Research also need to behave how they would for Financial Services OrganisationsDonna from the @BTCare team like to be perceived.contacted me and handled the Harris Interactive Stakeholdersituation superbly, taking total Ultimately it is how we make Relationship Modelcontrol, and resolved it to my customers feel, think and act uponsatisfaction. Despite what had all three dimensions (rationally,happened, I actually think more emotionally and intentionally) viahighly of them now than I did our products, services and brandbefore. I now feel reassured that and communications that drive For further information related to this article, such as the background data, or to suggest new topics for inclusion please email firstname.lastname@example.org or call +44 (0)161 242 1360
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