Banks Must Build Emotion-Rich Relationships To Grow
For nearly a century, banks have had a great run. They’ve played an essential and highly visible role in people’s lives, and most have consistently made tidy profits as a result. Yet many customers think of banks as undifferentiated, and a fast-growing crop of disruptors is threatening bank brands’ relevance. The primary danger for banks isn’t a spike in attrition, so customer retention won’t be enough to address these threats.
“Emotion is the largest contributor to a bank brand’s energy. CMOs must get this right when building moats around financial relationships increasingly at risk from high-equity brands like Apple”, says VP & Principal Analyst Dipanjan Chatterjee.
The report “Retention Is Not Enough: Banks Must Build Emotion-Rich Relationships To Grow” shows that there are new and nonfinancial brands that are challenging traditional banks’ roles in customers’ lives. Brands from categories as diverse as consumer technology and retail are now vying to providing financial services. Brands like Alibaba, Amazon, Apple, Baidu, Google, LINE, Orange, Starbucks, T-Mobile, Tencent, and Walmart have their eyes on this prize.
Bank CMOs must drive sustained, profitable growth by focusing on three emotional “territories” as they redefine their relationships with customers: “On your side;” “At your service;” and “Unlike others.”
- Highly differentiated brands arouse curiosity and, if they deliver on the brand promise, spark loyalty.
- Financial brands must shore up their relationships and deepen their engagement to provide uncommon value by focusing on three brand-building pillars: Salience, or being top of mind and prominent; Fit, or having the right product, price, experience, and channel available to influence choice; and Emotion, which defines the nature of the brand and its relationship with its customers.
- Three essential attributes – usefulness, accessibility, and intelligence – form the foundation of brand relevance in banking.
Principal Analyst Peter Wannemacher: “Financial provider brands typically rank in the worst quartile among US brands in terms of differentiation; challenger brands typically operate in the highest quartile.”
For more insights on the report “Retention Is Not Enough: Banks Must Build Emotion-Rich Relationships To Grow” check out Dipanjan’s latest blog post: The Future Of Financial Brands: Less Financial, More Brand
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