5 Reasons Financial Institutions Must Curate Deeper Customer Relationships

In the competitive financial landscape, customer relationship management for financial services is a pivotal strategy for sustainable growth and success. As your financial institution navigates the evolving needs and expectations of your clientele, the imperative to foster deeper connections with customers has never been more pronounced. Beyond transactions, cultivating robust and enduring relationships is essential for your marketing success.

In this edition of Compound Interest, we’ll touch on five key factors driving the urgency for customer relationship management for financial services like yours.

• 1. Building Trust Is Essential for Growth and Retention
• 2. Ambassadors Need To Feel Heard
• 3. You Need to Bring Your Values To Light
• 4. Customer Trust Is Your Insurance Against Inevitable Issues
• 5. Word of Mouth Is a Powerful Force
• Get Expert Help With Customer Relationship Management for Financial Services

1. Building Trust Is Essential for Growth and Retention

Financial institutions of all types understand the importance of trust. Without it, you won’t be successful in retaining existing customers, and it will be difficult to lure in new money without a trustworthy reputation. However, relying solely on the notion that trust is established by fulfilling basic expectations falls short of a proactive approach. Many customers tend to notice an institution’s trustworthiness solely based on how it handles their issues. The problem is that by this point, some customers or members may already have a bad taste in their mouth due to the issue, or worse yet, some customers may decide to leave before bringing the issue to your full attention. 

A commonly cited TARP study conducted by John Goodman dating back to 1999 found that 4% of customers who are “wronged” by a company will complain, while the other 96% simply quit using the company’s products or services. A well-constructed feedback loop is essential for not only optimizing your operations but also showing your customers how much they matter. Regular collection of customer sentiments and pain points will help you identify problems and opportunities and get ahead of them.

2. Ambassadors Need To Feel Heard

Some brands make the mistake of believing that ambassadors are simply users who had great experiences with their product. This group’s ultra-loyalty stems from a great holistic experience with the brand’s product, service, and convenience tools. They also feel important to the brand, which contributes to their strong loyalty as well. When an individual believes their voice is heard, they not only appreciate that their problem or request was addressed, but they can actually feel as though they helped consult the brand on the matter.

While it may not feel natural for many organizations to let their customers feel like they led them to water, this mindset on the part of the customer can build pride within them and make them feel trusted. If a customer brings a need or issue to your attention, you don’t want them to feel like you begrudgingly took care of it for them or even just simply took care of it. You want them to feel greatly appreciated for coming to you with the issue. You’re not just taking care of them; you’re optimizing your business around their feedback in a mutually beneficial manner.

From this, a deep relationship is built, reciprocating the trust. The next thing you know, you have an ambassador who is beating your drum for you, not just because of what you’ve done for them but also because they have a sense of importance as it pertains to your brand.

3. You Need to Bring Your Values To Light

For many financial institutions, connecting with younger generations is an essential part of their growth plan. Values are one of the most important factors in brand loyalty among millennials and Gen Z. Counting on this audience to learn your values by coming into your branches, visiting the “About Us” page of your website or reading your latest press release about a nonprofit you support isn’t going to do the job.

Developing as many touchpoints as possible to weave in messaging about your values is key. Monitor how these age groups are engaging with your brand and ensure that your values are omnipresent in those channels. For channels that allow for easy audience segmentation (such as e-newsletters), you may even consider tailoring messaging for younger generations to amplify your values to these audiences.

4. Customer Trust Is Your Insurance Against Inevitable Issues

Customer demand is driving the adoption of more tech solutions in the financial space. On one hand, organizations have to adhere to this in order to meet customer demand. On the other hand, it’s inevitable that you will run into a few snafus along the way. It may be as simple as a customer having to log in more than once during a session on a new app you launch. These things will happen, but when customers encounter annoyances while using a technology that’s supposed to make their lives easier, it frustrates them.

5. Word of Mouth Is a Powerful Force

We already hit on the importance of trust when it comes to both acquiring and retaining new customers, but another important thing to keep in mind is that it’s important for the medium to match the message. People consider certain mediums more trustworthy than others. The trust message must fully resonate by conveying not only a powerful message but also by using a means that the audience trusts. No matter how persuasive your marketing is, most of your audience will still put more credence in the experiences with your brand of their friends and family members.

This explains the importance of not only cultivating trust with your current customers but also giving them a sense of pride that their voice helped optimize your processes. This will make them into ambassadors of your brand, and their word will be far more persuasive to people close to them than your paid marketing efforts. This doesn’t mean that marketing shouldn’t have a place in the equation though.

Tactics such as customer testimonial advertising can allow for marketing to amplify the voice of their customers. This allows brands to not just benefit from a current customer’s good experience with that customer’s direct network but to also package that customer’s experience and share it with a target audience that you control. Financial institutions can both build trust and drive growth by running ads that highlight a customer’s good experience with their brand and packaging it with an appealing offer.

Get Expert Help With Customer Relationship Management for Financial Services

If you have questions or would like to discuss improving your customer relationship management for financial services, feel free to contact us here. You can also call us at 502-499-4209.