How different are your customers from the following profile of today’s American financial consumer as described by U.S.-based Forrester Research?
The report Winning The Changing Financial Consumer reveals the results of Forrester’s analysis of almost a million consumer responses collected by mail or online from U.S. households and individuals between1998 and 2003.
They found that today’s financial consumers are:
• disillusioned, skeptical and wary of firms,
• disbelieving of privacy claims,
• worried about their security,
• anxious about personal data,
• retreating back to the coziness of family,
• wanting to participate in managing their investments, and
• wanting to do their own research before making financial decisions.
The Forrester report suggests that financial firms can hold onto such consumers through what they call customer advocacy: doing what’s right for the customer, not just what’s best for the firm’s bottom line. “It’s customer advocacy that drives satisfaction, surpassing other predictors like service, convenient branches, a personal relationship with firm representatives, or a wide range of products.”
And how does this tie in to IT?
Firms that lead in customer advocacy are also seen as the most advanced in technology use, reads the report.
Forrester claims that a financial firm demonstrates and delivers customer advocacy when it:
• is transparent about how it makes money. “Consumers don’t have a problem with a firm making money; what raises mistrust is making money in ways they can’t understand.”
• puts the customer’s interests first and says no even when the transaction could result in revenue for the firm.
• learns more about its customers. As the report points out, how can a firm recommend what’s right for customers if they don’t know anything about their life stage, attitudes and needs? Despite distrust in privacy claims, Forrester found that consumers are willing to share their information if they know exactly how they would benefit from doing so. Earlier research revealed that financial institutions have an advantage already because consumers trust them more with their personal data than they trust retailers, long distance carriers or even charities.
This issue of IT Focus looks at IT tools for improving customer service and highlights the strategies of firms as they strive to get, keep and grow their share of the market. It would appear from these examples that they have already figured out that their customers are not that different from Forrester’s profile of American financial consumers.