|
The Global Financial Crisis has shaken people’s trust in the financial services industry. And while the panic is over, the fear still remains in many. Five years ago, people were riding high and more prepared to take some risks with their money for the chance of making more of it. Today, people are much more focused on protecting what they’ve got. Any financial service that holds or deals with people’s money will have seen a wave of risk adversity come over their customers.
In the research we do with super fund members, a strong theme is about being with a fund that ‘won’t go down’. Trust to them is about preserving what they’ve got, particularly for members over the age of 40 who don’t want to lose what they’ve worked for and know they don’t have enough time left to make it up if something goes wrong.
Members having multiple super funds is an issue that the super industry is trying to address, but there are members that see this as a form of diversification by not having all of their money with just one fund. Interestingly, neither Lehman’s nor Storm Financial were super funds, but people don’t really make the distinction (‘they were big organisations that handled other people’s money and so are you’). The whole industry is bearing the reputational brunt of these collapses.
The Australian banking sector held up very well during the last few years and consumer confidence was given a shot in the arm through the Government guarantee. But the difference here is that most people do not have large sums of money sitting in a bank account. Rather, it is they who have the banks money through home loans and credit cards, so issue of trust isn’t so critical here.
Financial planners will have seen a change in many of their clients’ objectives from outright wealth accumulation to (at least in part) wealth preservation. A more conservative client needs complete trust in the advice they are receiving. This trust can come from established relationships, referrals or the brand of the practice.
So while trust has become elevated in importance in people’s minds, the question is: is trust really a viable primary brand position for financial services organisations?
Trust is the foundation of all financial services brands. Without a base level of trust, people simply will not do business with a financial organisation. If people did not trust the financial organisation they were with, they would move to one they did. So, by necessity, there is an existing base level of trust of financial organisations by their customers, so from this perspective trust is not an adequate differentiator to have this as a primary brand position. In superannuation, many funds position on their size (FUM and members) to signify security and trust. If most funds are saying this, then there is no discernable difference between them to members who will likely be asked to choose a fund on change of jobs.
Higher levels of trust can certainly aid customer retention. “I am comfortable who I am with so I have no reason to leave.” But high levels of trust will seldom attract more customers from competitors.
So while trust isn’t a primary differentiator, lack of it certainly is.
If your organisation is trusted less than your competitors, then you are at a disadvantage. There is a view that where there’s smoke, there’s fire. People talk, and now do it extremely efficiently online through blogs, forums and wikis. You need to address this trust issue to create an even playing field and move on to higher-order branding initiatives to make a competitive difference to your business. There are branding steps you can take to improve your position by introducing branded trust markers.
Branded trust markers are actions and initiatives that naturally increase the market’s trust in your organisation. These can take many forms. An endorsement from a trusted celebrity. Bricks and mortar presence for primarily virtual organisations. In fact, any programs and initiatives that mark a visible, major long-term commitment to customers will increase trust levels.
A case in point is the new kid on the insurance block, Youi. A massive media spend has seen the awareness of Youi skyrocket. Youi has a brilliant positioning as the insurer that only charges you for the cover you need – a strong brand position of value. Its brand position is different on a functional attribute that is important to the market (only paying for the insurance needed). But as a new kid on the block, Youi has experienced trust issues. From our research, people love the value proposition but when it comes time to sign up, some baulk because they don’t know if Youi will be around when they need them or how easy or difficult they will be to deal with when they need to make a claim. Other, longer standing brands have more to protect by providing a good claims experience, and people know this. Youi is a case of an organisation being hampered by insufficient trust. Once it addresses this issue, Youi will likely become a dominant force in the car and home insurance market.
Big brands naturally generate some additional trust through their longevity and sheer advertising and promotional presence in the market. Smaller brands, such as niche credit unions or financial planning practices, do not have large marketing budgets so they need to build trust through relationships, services and referrals.
If trust levels are lower than your competitors, then you need to address it. If they are at least as good, then spend your time and energy finding a brand position that will make a fundamental difference to your business.
Trust is needed, but it’s not enough. It is the entry ticket to the game. Without it you can’t play, but even with it your brand still needs a point of difference on something else of value to your target market to win the game.
|
