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Archive for the ‘Banking’ CategoryTop Canadian BrandsWednesday, May 20th, 2009
It would be an understatement to say that the financial services sector globally has had a shaky year. Yet, interestingly, Canadian financial services brands, while not completely immune to the sector’s difficulties, have generally been performing strongly. Brand Finance Canada has published a report on Canada’s Most Valuable Brands 2009, which is dominated by financial services companies. Five of the top ten spots are taken by banks, with Royal Bank of Canada earning top honors with an estimated brand value of CAD$5.4 billion. BlackBerry, building on its startling success of recent years, takes second place with its value rated at CAN$4.6 billion. The full top ten of most valuable brands is as follows:
The report goes on to reiterate the importance of a strong brand, explaining that brands tends to create value by shifting both the demand and supply curves. On the demand side, they influence buyer behaviour by instigating greater trial, improved frequency of use, increased loyalty, and often a willingness to pay a price premium, among other things. From a supply point of view, strong brands can attract better employees, influence terms of trade, and may even reduce the cost of capital. So, while some organizations may overlook or neglect their brand at times such as these, when the economy is uncertain and other things may seem to be a greater priority, it is vitally important to understand the importance of your brand.
To Keep Up, You Must Keep In TouchFriday, May 1st, 2009
In her latest Thursday Night Insight, Chrissie Douglas highlights the sheer pace and scale of economic change in the UK (the so called credit crunch), how this has completely changed our perceptions of things that we have always taken for granted (i.e. that our money is safe in the bank!), and the fact that market research is now perhaps more important than ever to keep in touch with what exactly is going on out there. Let me start by telling you about my banking experience in the last six months. After ten years of riding the property boom we sold our house and put the proceeds in the safe hands of our family bank – Royal Bank of Scotland, whilst waiting for our next dream move. The months passed and as the property market began to decline we felt great in the knowledge that our secure pot would actually buy more as time went on. We thought we were playing it by the book. We’d made some money and we’d put the proceeds away safely in the bank with no risk – just as we’d always been told to do (“after all, your money is always safe in the bank”). This all changed in October last year with news reports that British banking giant Royal Bank of Scotland was about to collapse. The share price had fallen from over £2.50 to 40p (a fall of 84%!) in a matter of days and was on the verge of going under. We had to move quickly. A review of the alternatives revealed that the only 100% safe option for savings was now the Post Office (owned by the Bank of Ireland), following the Irish government’s pledge to guarantee 100% of all savings in Irish Institutions. So the money was safe again, or so we thought. Just after Christmas, amidst continuous press reports of financial doom and gloom, we noticed that the Irish economy was worst hit and on the verge of bankruptcy. The promise of their 100% safety on savings was not worth the paper it was written on (they would not have the funds to back up this guarantee if bankruptcy occurred). With the hysteria surrounding the bankruptcy of the Iceland economy and the loss of savers’ deposits in Icesave still fresh in our minds, we moved the money back to RBS where incidentally it would have been safe all along (in the meantime RBS had become 75% owned by the British government). The point of telling this story is to highlight the rapid scale and pace of change, and that things that you had always taken for granted are not necessarily so in the current climate. The term ‘credit crunch’ has become part of our everyday vocabulary but, until it hits you on a personal level, I don’t think you appreciate the nature of the current financial situation in the UK. Things are changing very quickly and it is difficult to keep up. A quick review of recent headlines highlights this point. For example:
There are many more examples but the common theme is that economic decline seems to be on a bigger scale and is changing faster than ever before. Nobody knows what is going on. Nobody knows what will happen next. All we do know is that we have to carry on and plan for the future as we have always done. This brings me back to the topic of market research. In this current environment it would be understandable to remove market research from your list of top priorities. It may be hard to justify expenditure on something that may be out of date soon after completion (given the pace and scale of change, last year’s market research may already be out of date). However, companies still need to make informed decisions on future direction. I would argue that market research is actually now more important than ever. What we really need is continuous customer monitoring that is cheaper and has a quick turnaround. Luckily with the aid of new technology, market research techniques have come on leaps and bounds and now enable us to keep our nose to the ground. For example, e-surveys, online focus groups, internet panels and bulletin boards are all providing us with the ability to keep up and keep in touch. For more information on how B2B International can help you stay in touch, please call one of the B2B teams on +44 (0)161 440 6000 or +1 914 761 1909.
Staying In Touch With Your CustomersFriday, October 31st, 2008
It is widely accepted that satisfying customers profitably lies at the core of every successful business. But do we always fully appreciate all the different ways our customers come into contact with us, and do whatever we can to understand how they can best be served? Nick Hague isn’t so sure… In these uncertain times, holding on to your most valued customers is more crucial than ever. From just a quick Google search you can get many different statistics thrown in your face: The average company loses 10% of its customers each year A 5% reduction in the customer defection rate can increase profits by 25% to 85%, depending on the industry The top 20% of customers in a business may generate as much as 80% of the company’s profits, half of which are lost serving the bottom 30% of unprofitable customers I recently read an article on www.btobonline.com about some research carried out by the CMO Council (an online survey of more than 450 global marketers). It stated that only a half of global marketers have strategies in place to further penetrate or monetize key customer account relationships, and only one-third have strategies in place to win back dormant or lost customers. It brought it back home to me that while b-to-b marketers are increasingly focused on improving relationships with customers, they still have a long way to go in implementing effective, consistent customer retention practices. The survey found that everybody was spending money on demand-generation programs, but was missing a trick in not looking closer to home at their existing customer data and leveraging it further. We all know that it is easier to sell more of a product or service to a current customer than it is to try and get a potential customer on board, so it begs the question, ‘why aren’t more companies doing this?’ The problem is that, historically, companies’ customer satisfaction data hasn’t been disseminated widely enough throughout the company to heighten the importance of little things, like the fact that a delivery driver can speak the native language and is friendly and polite when on site, or that the appearance of the delivery fleet is up to scratch. These little things can impact on customer satisfaction and loyalty in a big way, especially because this might be the only real contact that a customer has with the company. Therefore, the lack of ownership of the customer relationship across a company is the first step to reducing churn. Marketers should determine their most profitable customers, and look at how to improve the customer experience and how to increase business with those customers. The study showed that only 6.8% of marketers stated they have excellent knowledge of the customer when it comes to demographic, behavioral and psychographic data; there is no excuse! At B2B International we are passionate about customer satisfaction and customer loyalty research. We have spent our lifetime speaking to other people’s customers. However, the question is often asked; ‘who is the customer?’ This is the biggest challenge business-to-business companies face in the battle for customer loyalty. Keeping on top of all the interactions and touch points a customer has with a company is difficult, but it is important to return again and again to this subject because we all know that the customer is made up of many touch points and different people in different positions. A company not only needs to know who the key decision maker is, who ratifies the decision and who are the key influencers, but also the wider myriad of connections between companies and their customers. Think about the bank that you deal with. It is not just the cashier that you come into contact with; what influence does the ATM machine, the call centre, or the adverts you see on the television have on your perceptions and satisfaction?
A customer might call in to a call centre for a query on their bank account and get turned off because the call wasn’t handled properly. Small things like this might go unnoticed but when added up these could result in large churn. It is crucial that all marketers understand that customer touch points are linked and thus work towards heading off the ‘domino effect’ if something goes wrong at one of them. Banking on Customer SatisfactionFriday, October 10th, 2008
Paul Hague looks back at his personal experiences – both good and bad – with the banking sector to highlight the importance of building and maintaining relationships with your customers, whatever the industry you operate in. As a penniless student in Durham, I needed a bank. I had no conceptions or experience of banking and my choice was made entirely on convenience. Walking down the Bailey in the centre of the town, I was attracted by the swinging sign of a grasshopper. The bank was called Martins. Half an hour later as I left the bank, clutching my initiation pack and a cheque book, I felt that I was somebody and going somewhere. Martin’s didn’t remain independent for long, however; it was shortly swallowed up by Barclay’s, with whom I did business for over 20 years. In the first few years of this relationship they fulfilled all that I needed from a bank in both my business and private banking capacity. And then, things began to change. The bank manager who I had got to know was abandoned as the bank rationalised and began its drive to greater efficiency and profitability. It wasn’t long before I was just a number. One day this number received a letter through the post saying that a stamp collection that I had in their safe deposit would now be subject to a charge. This was not especially unreasonable but, in the context of the amount of business I was doing with the bank, I thought it merited a phone call to tell me this rather than a snotty letter. And it followed on from a constant series of initiatives to reduce services or find opportunities to charge for them. At the time, my business and personal wealth should have been sufficient for the bank to have some slight concerns about losing me. Since my patience had by this point snapped, I dialled the bank, was answered by an automatic answering machine, and was ultimately directed by a series of numbers to someone I could speak to. If, at this time, I had been offered an apology or indeed if any interest had been shown in retaining me as a customer, I am sure I would have still been doing business with Barclays. But it was clear that they were indifferent; I really was just a number. After much tedious changing of standing orders, I moved to NatWest Bank. It wasn’t long after joining that bank that I received a phone call that invited me to move to a private banking facility within their banking group. There I was introduced to real people who knew my name and who gave me their business cards, inviting me to contact them if ever I needed their financial services. And I have to say that they haven’t let me down. As I look back over this experience I cannot believe the stupidity of Barclay’s to give up the loyalty I had shown them over the years. As a lifetime customer, my business was worth millions and yet to them I was still just a number. I am reminded of this story following a recent survey that B2B International carried out into banking services among SMEs. Less than a third of SMEs believed that Barclays fulfilled the role of being an important business partner. This compared with the Royal Bank of Scotland (which headed the league table), where over three quarters of respondents thought that it fulfilled the status of being an important business partner. Banks get kidded into believing that they have loyal customers because they have a relatively low churn. It is not because they are satisfying their customers, rather it is due to the considerable difficulty a customer faces when switching banks. Customers are effectively hostages. So what is it that creates a relationship with a bank or indeed with any other supplier? Relationships are nearly always between people rather than inanimate objects. Getting rid of the bank manager and having a constant stream of different people supplying services destroys any opportunity to create a relationship. People value someone to talk to; someone who will actually listen and who will genuinely want to help. The second point to make is that relationships are built up over time. A relationship that has satisfactorily endured a number of years is capable of withstanding problems – and problems are inevitable in any business service. As we watch the financial services sector move into meltdown, we know that the greed of bankers has played a big part. But in the High Street, and particularly with business customers, it has been the banks’ lack of understanding and unwillingness to listen that has been the cause of their demise. The moral that I draw from this blog today is that understanding customers and building relationships are the two most important elements of the marketing task. This is not difficult; it is not rocket science. In fact it is blindingly obvious and yet it is so often ignored. |
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