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Think Your Bank Is Different? You're Wrong.
Business Journal

Think Your Bank Is Different? You're Wrong.

The right behaviors, not clever slogans, are what truly differentiate your bank from the competition

by Jai Gill and David Helvadjian

Like most companies, banks and financial institutions invest enormous amounts of time and money crafting what they think is a unique identity. That identity is meant to appeal in an emotionally engaging manner, build deeper customer relationships, and positively affect market share and profitability. It's a good idea -- so good that every bank does it.

It pays, literally, to give customers a reason to think your bank is the best.

In mature markets such as banking, where products are commodities, creating brands that offer better value than their competitors do is a real challenge. But it's the key to acquiring and retaining customers in competitive markets. And banks cannot accomplish real differentiation until customers believe that a bank is truly different -- specifically, if they can agree that "Bank X is the best."

Bank customers rarely say so, however. In a recent banking study Gallup conducted in New Zealand, only 7% of customers believed that one bank was the best in the whole industry, while 44% of customers said that all banks and financial institutions are about the same. This is not unique to New Zealand; Gallup has found similar responses from banking customers in other parts of the world.

That 7% is a particularly valuable customer segment. Gallup has discovered that customers in New Zealand who agreed that one bank is the best are twice as likely to be fully engaged with their bank as those who believe that all banks and financial institutions are the same. Similarly, those customers are nearly two times as likely to be extremely satisfied with the bank's products and services and to be extremely likely to recommend the bank to their friends and family, compared with those who perceive no differentiation.

So it pays, literally, to give customers a reason to think your bank is the best. And while we are not suggesting that the marketing and communication initiatives by New Zealand banks are ineffective, these banks clearly are not realizing the full potential of their marketing investments. To put a fine point on it, they're missing one critical aspect of developing a banking brand: behavior.

Download the related white paper "Is Your Bank Different? Probably Not"

Actions that bring the brand to life

Every bank says that it cares about its customers, that it provides excellent services, and that its products are good for customers. Most of them are right. But how many banks can prove it every day with every customer?

Customers respond to actions that prove the bank does what it says it will do. Such moments determine whether customers remain engaged with the bank's products and services. And when an experience with a brand representative doesn't jibe with the bank's external messaging, the customer is likely to experience brand ambiguity. That may prevent customers from becoming engaged with the bank. This is why front-line employees must be authentic representatives of the brand.

Banks generally believe that their onboarding and training programs or their corporate culture is enough to teach employees to breathe life into the brand. But that 7% number proves that they aren't enough.

When Gallup conducted research across four banking brands in the Asia Pacific region, we found that many front-line employees, when asked about brand behaviors, could relay only lofty organizational goals instead of specific actions. They knew about customer-centricity, for instance, but they couldn't name specific behaviors that truly bring it about. Every company seems to claim it is customer-centric, which is, as an organizational aim, a nice goal. However, it does not distinguish one bank from another, especially from the customer's point of view, unless front-line employees know how to make being customer-centric a reality.

Here's how it's done: Bank A has branded itself as a community bank. Its organizational goal is to promote a sense of engagement in customers. Accordingly, all its print and billboard advertisements feature photos of local places. It sponsors and supports local schools' athletic teams, and it funds community organizations that, in turn, prominently display Bank A's logo in their materials.

But "community" is tricky to manifest in behavior. Bank A, nonetheless, has found some unique ways to do it: On game days, employees are permitted to wear T-shirts featuring local schools and colleges. Employees are encouraged, and sometimes paid, to assist at community events. And the bank always sets up booths at street fairs, car shows, and the like. Its mortgage specialists keep photos on their desks of houses owned by people who have originated loans with that officer (with the customers' permission, of course).

None of that costs very much -- the behaviors require more cleverness than money -- but all of them demonstrate the brand via the employee. Yet few banks mobilize that sort of behavior.

Banks can bring the brand to life by systematically selecting employees who relate to the bank's brand values.

So to make a brand come to life through behavior, this is what we recommend: Formulate a brand identity, align organizational goals to the brand values, and clearly define behaviors to help employees bring the brand to life.

Finding the right people

Bringing the brand to life through behaviors begins with people. Banks must select front-line employees for their ability to embody the behaviors that form the foundation of the bank's brand and must coach these employees to do it consistently. It is extremely important to select front-line employees with a natural talent for executing the functional demands of the role as well as the behavioral profile that fits the organization's needs.

But beware: The demands of the role should not be a long wish list of nice-to-have traits but specific attributes determined from profiling the bank's best front-line employees. This creates achievable targets for personnel and helps scale the program across the branch network. This practice is common among the best companies, including banks.

A global bank based in London, for example, uses a specific talent-based selection approach to ensure that every employee, not just front-line employees, has the talent to focus solely on creating great customer experiences. This talent makes front-line employees more responsive to customers and far more coachable. In fact, Gallup found that front-line employees who were a natural talent fit for the role increased cross-sell referrals by 64% compared with those who were not classified as a natural talent fit for the role.

Therefore, an essential key to bringing the brand to life is systematically selecting employees who relate to the bank's brand values. These employees are far more likely to successfully execute the company's strategy during those crucial employee-customer interactions.

To produce consistent, scalable outcomes, however, the entire workforce must be aligned with these desired behaviors -- as well as with clearly defined goals, responsibilities, and measures -- because that's what makes a bank's brand real for customers. A best practice for a bank is to create metrics for those behaviors and track them weekly, along with outcomes such as customer engagement and customer advocacy. These numbers give bank leaders the chance to act before the balance sheet is affected.

For example, the leadership team at an Asia Pacific bank tracked customer responses to metrics reflecting the bank's core brand values: "Be easy to do business with," "Make customers feel valued," and "Treat customers with respect." The bank also tracked customer engagement and advocacy to aid bank leaders in their decision making. Those metrics showed the bank how employees were embodying the brand and where the bank needed to focus next.

Modeling good behavior

All front-line employees are responsible for "behaving the brand." But leaders, from the executive ranks down, have their own behaviors to perform. Every leadership team member must own the brand image because that solidarity will inspire trust throughout the organization. It will also provide a foundation for whatever the bank determines to be its key drivers of success.

Because regional managers are responsible for driving behavioral change at the account level, they need to operate the company using the metrics -- those that support the brand image and all others -- that the leadership group has identified. Regional managers must hold their direct reports responsible for their performance on the key drivers and develop tactics to move the bank forward on achieving its strategic goals. These efforts must be localized, and regional managers should make adjustments based on the specific feedback they receive.

But be aware: Regional managers should use the metrics as a change management tool rather than as a means of comparison. A Southeast Asian bank made the mistake of having its team leaders solely focus on and be accountable for the metrics rather than the right behaviors. This led to a short-term increase in service metric scores, but it prevented the right behaviors from being institutionalized in the organization. As a result, each branch focused on getting a score that employees didn't know how to influence, and the bank was unable to fully maximize the potential of its brand values.

The ultimate success of any program lies in the way regional managers integrate these tools into their regular work stream rather than making them specific agenda items to be checked off a list. This isn't easy, and it likely will require proactive changes to internal reporting structures.

Execution must result in distinct customer-engaging behaviors.

One American bank tracked its service metrics daily for every branch and every interaction across the country. This helped regional managers monitor their territories and identify pockets of best practices (and the opposite). As a result, they were held accountable for responding to feedback and incorporating best practices into their work stream rather than for just their service outcomes. This allowed them to respond immediately to resolve larger systemic issues affecting customers, and the constant data stream provided instant feedback on the decisions that worked -- and on the ones that didn't.

Ultimately, this reporting system brought regional managers much closer to customers and allowed them to make decisions much faster. By trying to improve a common set of service metrics, the regional managers became aligned on the larger organizational goals they needed to achieve while maintaining the flexibility to make the right decisions for their regions.

Most often, branch-level team leaders are responsible for carrying out these decisions, while front-line employees are responsible for behaving the brand. And front-line employees can't succeed if their team leaders can't differentiate between good behavior and poor behavior. Therefore, team leaders need to be skilled coaches who focus conversations with employees on behaviors and outcomes rather than on metrics.

To continuously improve the customer experience, it is essential to reinforce good behaviors and to identify behaviors that result in poor customer interactions. Team leaders are usually the closest to the customer-facing employees and therefore have the most opportunities to support and encourage engagement-building behaviors. One Australian bank, which tracked customer engagement as a key service metric, used coaching of front-line employees as a management method. It saw a 28% increase in fully engaged customers in less than six months.

Aligning Employee Actions With the Corporate Brand

Making human connections

Because financial institutions are so similar -- they sell the same things for roughly the same prices and operate under the same laws -- it's difficult for them to differentiate their products and services. Execution, therefore, is all a bank really has to prove it is different and better.

Execution must result in distinct customer-engaging behaviors. It can't be an informal, vaguely defined value. If it is, front-line employee behaviors won't be consistent, won't relate to the brand, and won't have impact. Instead, the behaviors that distinguish a bank must be explicit, based on brand strategy, and coached from the top levels of the bank to the bottom.

Yet many banks believe that execution amounts to what bankers do on computers, not what they do with people. They forget that a customer-facing employee is the brand, as far as the customer is concerned.

But not every bank has forgotten. Some are well aware that though they're selling banking products, they're operating on human connections. Those are the banks that truly are different and better. And their balance sheets show that their customers know it.

Download the related white paper "Is Your Bank Different? Probably Not"


Jai Gill is a former Senior Consultant at Gallup's office in Bangalore, India.
David Helvadjian, Senior Consultant, is based in Gallup's office in Sydney, Australia.

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