SOAP BOX: Banks must take account of how retailers work

Ask your average punter what kind of relationship they have with their bank and they will probably say ’what relationship?’ So low is the public’s regard for banks that many people seem to prefer to conduct their banking with purveyors of carrots, feta cheese and cotton underwear, or even a business run by a bearded woolly jumper better known for hot-air balloons and cola.

Ask your average punter what kind of relationship they have with

their bank and they will probably say ’what relationship?’ So low is the

public’s regard for banks that many people seem to prefer to conduct

their banking with purveyors of carrots, feta cheese and cotton

underwear, or even a business run by a bearded woolly jumper better

known for hot-air balloons and cola.



Any previous business experience, in fact, now appears to qualify a

company to move into banking services. A bizarre situation, perhaps, but

one which the banks really can no longer afford to ignore if they are to

stop the top supermarket chains, and other newcomers, from seriously

damaging their business.



How do the banks hit back? By taking a leaf out of the retailers’

marketing book and developing a brand proposition which is meaningful to

the consumer while at the same time underpinned by their business

practices.



Two successful retail examples are Marks & Spencer’s refund policy and

quality promise and John Lewis’s ’Never knowingly undersold’. More

recently we have seen Tesco’s acclaimed Clubcard, which actively

recognises the value of customer loyalty.



Banks could learn from these examples, possibly with a reward system of

their own. The opportunity is not so much for points-based giveaways but

for a brand-driven approach which builds real emotional value into a

bank’s customer relationships.



Unfortunately, there are four core problems which the banks need to

overcome before they can even get close to adopting such a strategy.

First, banks still take a product-driven view of marketing rather than a

relationship-driven view. Many still do not even know how many customers

they have got, let alone how they behave.



Second, as banks have sought to automate their processes, they are

driven by a silicon rather than a human heart. And silicon hearts are

not that good at taking a relationship perspective.



Exceed your overdraft limit and you are automatically whacked with

punitive charges.



Third, banks (and they are by no means alone in this in financial

services) have taken an inconsistent and even Machiavellian view of

their charging structures, making customers unsure about the value they

are getting.



How can the consumer feel comfortable about an organisation that prices

mortgages cheaply but only if you buy expensive insurance at the same

time?



And finally, although banks have been quick enough to identify what they

want from their customer relationships they have been slow to identify

what they might give customers in return.



Regrettably, the first two points are so structural it is difficult to

see how marketers can make much difference. But by learning from the

experience of firms in other service industries, I believe that

marketers can have a marked impact in the last two areas.



The big question is not whether the banks have the ability to change,

but whether they have the will.



George Miller is planning director at DMB&B Financial.



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