The communications agency BergHind Joseph has warned that the financial services sector have to overcome the overwhelming problem of mistrust that exists if they are to prosper at all in 2012. The research the agency held at the end of 2011 showed that trust was the single most important issue that the the financial sector was facing, and the lack of it was having a serious impact on business.
The agency recommends that there are three key steps that companies need to take in order for consumers to have restored confidence in financial services and brands.
1. Develop brand values which truly reflect the business – which the agency describes as ‘talk the walk’ – which refers to having having a sound business model that is reflected in its brand values
2. Differentiate from similar businesses
3. Maximise the personal touch – become a people-friendly business
Ian Brownhill, Knowledge Director of BergHind Joseph says, “Trust took a massive hit following the credit crunch and ensuing recession, but issues such as high pay, mis-selling, conflicts of interest and short-termism have a much longer history. We have asked if lack of trust in financial services companies is so widespread and deep-seated, is there anything individual brands can do about it? The continuing financial crisis has dragged what was seen as a boring sector into the spotlight and now most people can be counted on to have an opinion about banks and insurance companies – sometimes even hedge funds and private equity firms. What’s more increasingly, their views are negative.”
Examples of where business is being harmed include the low uptake of private pensions in the UK. Mis-selling scandals, lack of transparency over charges, the collapse of company pension schemes and the failure of the once market-leading pension provider Equitable Life have all contributed to the lack of trust. This is also impacting on long-term savings products because consumers have low confidence in future performance and the future solvency of the company they have entrusted their savings. But even short-term products such as bank accounts are also seen as risky.
But BergHind Joseph has identified three steps to restore trust in individual financial sector brands:
1. Don’t walk the talk – talk the walk
Transparency is a necessity. Easy access to the internet and social media mean that currents of information flow more freely than ever before, bypassing the former corporate gatekeepers – the internal heads of brand, marketing and communication. Customers can broadcast their experiences in online forums. Employees can blog to the outside world. Financial services brands need to ‘talk the walk’. Invented brand values and superficial image-building will fool no-one. Customers and stakeholders want proof, including product performance in line with promises, high standards of service, and exemplary behaviour at the corporate level. And more authentic brand values will win the trust of employees as well as customers, helping to eliminate the cynicism that can kill internal brand allegiance.
2. Show them you’re really different
The financial services industry will remain contaminated by the financial crisis for the foreseeable future. Consumers will apply a ‘mistrust discount’ to all financial services branding, marketing and communication claims. It will be up to organisations to prove – through their attitudes, behaviour and performance – that they are not ‘just like all the rest’. As far as individual financial services brands are concerned, it’s all about differentiation – now more than ever.
3. Get up close and personal
People overweight personal experience in comparison with external sources of information. Financial services brands need to build trust by making use of this psychological trait. To the greatest extent possible, they must seek personal contact with customers and provide them with the expected and promised level of service. And whenever that vital contact is mediated – for example by the telephone – the experience must be as human, attentive and helpful as it can be.
Brands must also discriminate – in the positive sense – between customer groups, making allowances for national, cultural and personal preferences. There is no such thing as ‘the’ customer, and all distinct customer groups need special attention.