To their credit, financial services brands have generally kept their customers’ confidence through the financial crisis.
But they are not out of the woods yet. A combination of technological and social trends, less traumatic than the financial crisis but no less powerful, is changing customer expectations. Every financial institution should look at its fitness to compete in the ‘human era’.
A fundamental shift is taking place in business, which has profound implications for brands and organisations. At the core of this shift is the realisation that, to create a meaningful connection and real trust, brands need to start behaving more like people and less like faceless institutions. Customers are demanding that companies connect in new ways, which are more transparent, empathetic, open and authentic.
This fall in trust in institutions is not confined to the commercial world. Governments, churches and the media have experienced the same fate. Complex and rigid institutions, designed to function with machine-like efficiency but remain impenetrable to outside opinion or influence, have not kept pace with the expectations of today’s consumers.
Brands that thrive in today’s human era talk and act differently. They are empathetic with customers, and care intensely about the little things. They are not boring; they are open, real and even flawed. And they can only be that way by empowering their individual people to embody the brand.
The financial crisis might have been the trigger for people to reject the institutional behaviour of financial institutions. There was certainly enough anger and frustration. Research with UK banking customers, back in 2009, found predictably strong criticism of the banks, and appetite for some quite different banking services — and yet a strong preference to receive these services from their current bank, not an alternative provider. In that moment of crisis, customers wanted the security of a big institution.
So what does it take to adapt and thrive in the human era? I have five suggestions:
1. Really care about people as people
As a frustrated telecom customer tweeted, only half in jest: “Couldn’t get wi-fi so I ate a whole pack of Jammy Dodgers out of frustration and now I hate myself.” Would a customer service agent helping with her connectivity have focused only on the technical problem to solve, or have recognised the degree of frustration — apparently out of proportion, but not unusual – that it led to? A good hotelier cares not just about the quality of the service he provides, but also whether the guest is having an enjoyable and productive stay. What should the equivalent be in financial services? It goes far beyond Knowing Your Customer. And it is not about replacing an anonymous number with a computer-prompted name. It is about what you really care about.
2. Have a purpose and guiding principles that permeate the customer experience
Human behaviours cannot be scripted. Scripts are a mechanism for delivering institutional behaviours through human mouths. To act in a human era way, individuals must make their own judgments, in real time. That is what we mean by companies empowering their individual people to be the brand.
But how should we expect individuals to make those judgments? Human is good, but not if it means that a customer’s experience could be anything, depending on who answers the phone. Employees do not need a script, but they do need a context: a guiding purpose and principles that they can draw on in any given situation, so their judgment is about interpreting the situation, not about setting policy. Today when we articulate a company’s brand positioning, we think not just about how it will drive external communication, but how it will guide people’s intuitive behaviours within the company.
A few years ago, the Icelandic volcano that stranded an unprecedented number of people around Europe provided a test for many companies. Few had scripts that anticipated the situation, so everyone had to improvise, guided not by situation-specific instructions but by the broader principles in their company. M&S Insurance (in partnership with HSBC) had the principles to decide quickly that it would honour insurance claims from stranded travellers, even though the terms of the contracts suggested they were not covered.
3. Convey humility with confidence
We said earlier that human era brands need to level with their customers. They are open, and listen to customers a lot, to get feedback and ideas. They are real and acknowledge their flaws.
All this requires humility — but not feebleness. Customers do not want to make all the effort. They want to be heard, but they still want to be led, and to be stimulated with new ideas. Deep, open, involvement with customers is a route to leadership, not a substitute for it. The best human era brands involve consumers, respond to them, put them in control — but within a context the brand has conceived and innovated.
Bank of America’s partnership with the Khan Academy to create ‘Better Money Habits’ is a good financial services example. The bank helps its customers — and anybody else’s — to get better at managing their money, bringing in the online teaching skills and objectivity of the Khan Academy, rather than preaching to its customers itself.
4. Be sensitive to the little things
When making a big transition, it is tempting to focus on a few, big things that will have the big impact — an 80/20 approach. But that is top-down thinking, from the command and control of the institutional era. And it will not take you into the human era, because all the niggly things your customers encounter will undermine your efforts.
It is the attention to detail in the daily interactions that will reveal the truth about whether you are really a human era company. So encourage and support your people in attending to what might seem small details, when these are the clues that customers look for to judge the relationship they have with you.
5. Align these values to your company’s profit model
The fifth value is an enabler of all the others. You can set out on the four points above with the best intentions. But if this is all seen to be something extra — an enlightened view of how business should be, driven by nice but soft ideas like caring and purpose — then it will not survive the first underperforming quarter. Short-term financial pressures are real. If all the efforts above are seen as discretionary, then it will prove impossible to deliver them with enough consistency, and from the first cutback their failure will be a self-fulfilling prophecy.
In the most successful brands, these activities are not cut back when money is tight, because management understands that they are fundamental to the profit model. In a tight month, courier companies do not compromise on on-time delivery, and hotels do not skimp on changing the sheets.
Perhaps the toughest challenge in the human era is not just to make the efforts above as individual initiatives, but to bake them into the management culture and hard metrics, so they are embedded in how the company does business.
Article originally published in Financial Times Adviser on June 24, 2015.