Financial Services and Brand Differentiation

Building a successful brand in the financial services sector is less about “market” positioning than it is about differentiation - differentiating your company or offering in a way that makes you stand out from your competitors. The differentiator must be transparent to your customers.

My company has these quarterly “marketing and strategic” meetings. A topic often discussed is:

In such a highly saturated market where customers are bombarded with multiple product offers, and as the industry grows more competitive, how do we differentiate ourselves to pull away from and ahead of the competition”

Where do we need to focus our solutions?
- Diversify our communication channels?
- Develop new and even more competitive price offerings and rewards services?
- Create strategic partnerships?
- Develop new communication strategies?
- Focus on mergers and acquisitions?

Certainly all of these things are important but in today’s market it’s simply not enough (M&A aside). One of the truths of modern business is that there is almost nothing that your competitors can't duplicate in a matter of one or two months. And in light of recent senate hearings over credit card practices, all the top lenders are taking drastic strides to develop more customer-centric strategies and policies to differentiate themselves from the competition.

Citibank discontinued it’s proactive rate increase policy except at the time of card renewal and they dropped their universal default policy on payment behavior with other lenders. JPMorgan Chase began a series of mass proactive rate reductions with autopay signup and 6 months of on-time payments, new ‘spend more/pay less’ strategies and colorful mailings with “insider tips” for avoiding future rate and fee increases. Discover began sending out it’s own ‘good behavior” rewards offerings that lead to interest rate reductions, and soon other leading lenders will follow suit. Eventually customer-centricity at this level will converge on the marketplace and strategists will have to go back to the drawing board to re-differentiate themselves once again.

What tends to get sidelined during strategy development is the backend of the product/service offering beyond acquisition; customer service at the grassroots level. Probably one of the few line areas where a financial services company can truly differentiate itself is through value-added customer service that resonates and connects with customers on some emotional level.

If you’ve ever called your credit card company to make a complaint – you understand when I say that quality customer service that builds mindshare is a rare find. You can sit in the call queue for what seems like – a very long time – you run through every thoughtful detail of your situation and then you sit in silence for 10-15+ minutes while they research your information. Half of the time, advisors just don't seem to know what they're talking about. You'll likely get transferred once, twice or even three times all-the-while explaining every irksome detail of your situation over and over again. If you are really unlucky you accidentally get dropped from the call queue. Whoops.

Identity contact is the sum total of all information and experiences that a customer has with a brand

In this line of business, customer service call centers represent 75% of total ‘existing’ customer touch-points and delivering a great customer experience consistently across such a broad distribution network is all about execution, execution, execution. An advisor who fumbles through responses, drags in response time, or lacks the appropriate level of confidence to respond to an irate caller is more likely to kill a call, force costly escalations, spur multiple call-backs (doubling or even tripling unnecessary operating costs per call) or potentially even provoke a customer to close the account and we lose the business.

Whatever product or service you provide you need to have the strength in your customer service solutions to support it - from a technological perspective as well as a management and training perspective. Customer service centers need to be equipped with the best technology and data management tools to leverage customer information quickly and easily in order to handle calls more effectively. Sufficient training on the background of the business as well as in-depth and continuous credit education is essential. And equally as important is training in communication 101. These people are the voice of the Brand and our link to the customer.

Changing the way we service our customers from the ground up is a necessary next-step in pulling away from and ahead of the competition. Financial service companies that create and support customer-centric strategies AND build effective and efficient backend customer service solutions will be the ones building valuable brands and increasing long-term profitability.