Plenty of research underscores the value of loyal customers who advocate for your financial institution. They tend to purchase more products, do more business with you and help grow your business through referrals. But is your Institution giving customers the same consideration? Is your bank advocating for them and, just as important, do your customers know if it is?
The question is critical because it speaks directly to the circular nature of loyalty. If your customers perceive you as an advocate that has their best interests at heart, they will reward you with their loyalty. In turn, that loyalty helps your bank further build its business, develop targeted marketing campaigns and refine products and services that are compelling and relevant. All of which reassures customers they’ve made the right choice to stick with your bank.
“Each year our statistical models show that customers who rate their financial services firms high on customer advocacy are more likely to consider those firms for future purchases, while firms whose customers rate them lowest for customer advocacy have the fewest customers who would buy from that firm again,” analyst Alyson Clarke explains in the Forrester report “Customer Advocacy 2016: Drive Cross-Sell and Loyalty By Focusing On Advocacy.” This topic was also covered in depth during Alyson Clarke’s session at Deluxe Exchange 2017 earlier this year.
What do consumers perceive as advocacy?
Last year’s headlines gave us plenty of examples of what consumers’ view as advocacy, how they reward companies they perceive as their advocates and how they penalize those they feel have taken advantage of them. According to Forbes, Google again topped the Reputation Institute’s list of companies with the best reputation for corporate social responsibility; it’s held that position for three years. In contrast, Volkswagen’s score plunged more than 13 points, leaving it out of the top 100, in the wake of its emissions software scandal.
Of course, many nuances go into a perception of advocacy, but the essence of advocacy is simple to understand. Consumers want to know that the companies they do business with, including their financial institutions, care about the consumers’ well-being and the world in general. They don’t begrudge you making money; they do begrudge profit at their expense without any benefit to them.
Clarke defines advocacy thusly: “The perception on the part of customers that a firm does what’s best for them, not just what’s best for the firm’s own bottom line.”
For financial institutions, consumer advocacy takes many forms, including:
- Transparency in product pricing and terms and conditions
- Outstanding customer service in branches, online and through call centers
- Emphasis on excellence of customer experience across all channels
- Available financial readiness tools, guidance and advice
Communicating your advocacy
Of course, another reason Google consistently tops that list is because the search engine giant does a bang-up job of consistently communicating to its customers just what it’s doing to advocate for them. Even financial institutions that do a good job of advocacy can fall short on adequately communicating their efforts to the people who most benefit from them.
FIs can communicate their advocacy in multiple ways, including:
- Marketing to consumers’ needs, rather than pitching a product. When you promote a product to customers, are you doing so because the product is something that can enhance their financial lives or because it’s what you want to sell at that particular moment?
- Providing information about financial readiness tools, calculators and resources available through the FI’s website and mobile app.
- Simplifying loan documents to make it easy for consumers to understand exactly what they’re agreeing to and how the terms benefit them.
- The account opening process should be seamless and simple regardless of the channel and if they start and stop via any channel.
- Educating consumers about different financial products that are relevant to them and their needs.
- Supporting customers’ efforts to achieve overall financial well-being by providing them with information on the factors that improve financial health and information on how to measure theirs.
- Incorporating the human element into digital channels so that consumers feel they are never lost in the system.
- Empowering staff to better assist customers.
- Emphasizing a culture of value throughout the financial institution so every employee understands that the priority of providing exceptional customer service drives profitability for the bank.
- Creating alerts that will proactively alert consumers before something bad happens to show that their financial institution has their back.
- Visibly participating in the community through outreach activities that do not necessarily directly benefit the bank or credit union.
Advocacy remains the key to building customer loyalty. Banks that advocate for their customers are much more likely to nurture FI-customer relationships that deepen into brand advocacy for their organizations.
If you want to gain more insights like this, make sure you sign up to attend Deluxe Exchange 2018 in February. We’re working on putting together an amazing lineup of keynote and breakout speakers that will leave you inspired and equipped for success in 2018.