inform. educate. connect. Issue #15 - February 2012

The Power of Following Through

By Martie Woods, Deluxe Corporation

Consumer distrust in financial institutions hit its peak about four years ago. At the time, we were inundated with literature and news on the subject, and bankers scrambled to respond. We did our research, heard from consumers and held emergency staff meetings. We hired consultants from both within and outside our industry.

Despite all the effort to understand what was going on and why, we remained confused. Much of that confusion remains to this day. Just when we think we have the extent of the distrust nailed and the solution cornered, new exceptions, inconsistencies and contradictions arise.

Are consumer attitudes about us really changing this often – so often that we’re constantly a step behind? I don’t think so. I think it’s a case instead of trying to organize a highly complex concept into a neat and tidy one that provides immediate answers. Even the experts took an overly simplified position on trust in their books and journalism, treating it as something that either exists or does not, without nuance.

An End to Blind Trust
Prior to the global economic crisis, consumers felt a sufficient level of comfort and confidence to gratuitously extend feelings of trust to even their distant relationships. Financial institutions and other service providers merely had to make a promise that sounded good: our commitment to quality, our attention to customer satisfaction. People were willing to accept promises wholesale, without proof.

Such consumer lenience is always short-lived, and there were already signs that customers and members were seeing less value in their financial institutions before the collapse. The economic crisis and regulatory burden merely accelerated the end of this “life is good, I feel generous” cycle.

As the cloud of uncertainty dominated, consumers pulled in and withdrew their generosity, adopting a “fool me twice, shame on me” mentality that made them suspicious and selective to the extreme. They reevaluated their current service relationship – taking nothing for granted this time – to construct a new list of who was in and who was out.

This is where things got confusing. There were daily reports of consumer dislike, distrust and outright disdain in banks at a macro level. Yet, any swift sampling of consumers raised doubts at the accuracy of these reports. Sentiment wasn’t so uniform at the level of the individual financial institution.

Don’t Merely Promise
Granted, there still exists a large group of people with a negative opinion toward our industry. However, there are also many customers and members who hold their own banking relationship in high regard. They have basically felt this way over the last 48 months, through thick and thin.

How can this division be explained? Is it merely a difference in quality between one financial institution and another? Or is it because certain banks made and delivered on compelling promises before it all went bad, which engendered a sense of customer trust that remained strong through the sour times? I think there is something to be said for this latter idea. 

This phenomenon is not exclusive to banking. Service industries, such as preventive healthcare, hospitality, insurance and dry cleaning all experienced similar consumer shifts. If your offering was not perceived as valuable enough, you were thrust into the price war. If it was, you enjoyed a position of security because you made the cut and instead of being ‘dropped’, were advanced to an even more intimate place in the hierarchy of providers.

Dry cleaners whose business models were based on the traditional model in which customers dropped off clothes at a standard, mundane store front to a worker who would rather be somewhere else, were replaced by a similarly mundane cleaner who charged less. Faring better in this shift, were the dry cleaners that had already differentiated themselves by selling a clean, professional look without the hassle. They pick up the dirty, deliver the clean and charge you automatically. The value they deliver coupled with the stickiness of their business model gave them a position of strength when others were being relabeled as no longer worth it.

If you want to develop healthy long-term customer relationships that endure industry rough patches, you cannot simply keep promising. Rather, you must hone in on the highest-value promise you can make based on the unique strengths of your institution. Then, do everything in your power to deliver big on that promise in every way possible. Consumers will remember this.

As an individual bank or credit union, you have limited control over the public’s opinion of this industry. But by ensuring that the words and actions of your institution remain strong, clear and consistent, you can fortify your customers’ trust in you, regardless of the current state of banking.

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