Purpose In Action

How consumers are backing financial brands that don’t just do good, but do more.

In recent years, the Financial Services marketplace has changed beyond all recognition. We have seen the emergence of challenger banks, mobile only brands and other disrupters that were once a rarity but are today a necessity for consumers increasingly accustomed to taking more control over their f inancial af fairs. Changing regulation means that consumers have no choice but to take decisions they have never taken before, such as in the recent pension freedoms.

Meanwhile, the brands who were hard hit by the credit crunch have by no means gone away. Many are upgrading their back-end service and CRM systems and embracing innovation with as much enthusiasm as the challengers and are playing to their strengths, using their reach and resources to continue to dominate the categories in which they operate. Others are seeking a more meaningful connection with consumers, repositioning themselves around their heritage, their values and their social purpose.

At the same time, consumers are no longer merely passive, or even grateful recipients of products and brand messages and are increasingly vocal in their criticism of the brands that don’t deliver on expectations. The concept of instant gratification, once confined to the FMCG and entertainment categories, has made consumers raise their voices – and brands, likewise, raise their game.

In the light of this change and in the wake of the Referendum, Chime Insight & Engagement and Teamspirit set out to identify the key drivers and dynamics within this new landscape. We sought to understand how consumers feel about Financial Services brands, what their expectations are in terms of brand behaviours and the criteria against which they are evaluating their choices. To this end, we conducted proprietary online research in August 2016, surveying a nationally representative base of 2,000 UK consumers on 20 consumer brands across multiple dimensions grouped under 4 key metrics:

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The brands included traditional leading banks, insurance and financial planning providers and payment solutions providers.

What we learned

The best performing brands have taken their social purpose and put it to work as a set of operational behaviours, in terms of the products they develop, the unmet needs they address and the customer experience they deliver rather than a more passive ethos of values and beliefs that sounds good but ultimately serves little practical purpose. The brands consumers trust, respect and recommend are those which don’t just say the right things, but do the useful, helpful things, the things that solve problems and make their lives easier, for themselves and for other people. What’s more, they will only actively recommend brands which they score as 10 out of 10 on the Net Promoter scale, indicating how consumer expectations are higher than ever before.

The study also found that all 4 Es, not just ethics, are strongly related to perceptions of trustworthiness. Brands that respondents trusted had a correspondingly high score for evangelism, experience and engagement as well as ethics, whilst distrusted brands were not only considered to have poor ethical standards but also a poor customer experience and low ‘likeability’.

In other words, a brand’s ethical reputation can have a powerful halo effect on consumers’ attitudes to its behaviours in a broader sense. This helps to explain why brands which came under criticism for their unethical behaviour during the financial crisis are still suffering from perceptions of being unhelpful and unpleasant to do business with. It almost doesn’t matter how good a company’s products or services might be, if the company’s ethical values and behaviour are judged irredeemably bad, there is a default to distrust. Something the study also uncovered was the presence of active ‘passion communities’ among respondents, who had markedly different attitudes to the overall survey population. These respondents tended to rank criteria the opposite way to the majority, for example, with regard to their attitudes to innovation, ethics or a brand’s social presence, but at the same time, ranked these criteria much higher as drivers for recommendation, trust or likeability. In other words, whilst these consumers may represent a minority of a brand’s audience overall, they are likely to be more vocal and influential advocates or detractors and brands should ignore them at their peril.

Similarly, the study found some very interesting differences and also correlations in the attitudes of customers and non-customers of the surveyed brands. We were able to use this data to create 4 separate segmentations, which could be applied to each E in turn and also to create an overall market map.

To find out more simply read out Purpose in Action whitepaper.