How Financial Institutions Can Improve Customer Relationships

BY Rachel Cagle
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One thing most Americans can agree on is that the pandemic has been rough on people financially. Mass layoffs, unexpected medical bills, and other expenses disrupted many consumers’ financial security. As such, financial institutions have been in high demand for over a year now. However, there’s a common problem they face. The switch to digital channels for shopping, banking, work, etc. was also expedited last year. This may not sound like much of a problem since many organizations had already invested in digitalization before the pandemic. However, according to a report by Nielsen, “that doesn’t mean that their customer relationships are active and healthy.”

The State of Financial Institutions and Customer Relationships

Consumer trust with traditional banks continues to fall, which is inspiring increased engagement with alternative providers,” says Nielsen. “When you couple that with the pressure on many advertising budgets at the start of the pandemic last year, the challenge to stay top of mind and meaningful with consumers increases substantially.” Financial institutions may not think that now is the time to be dedicating more of their reduced budgets to advertising. However, increasing brand awareness is proving to be crucial to maintaining existing customer relationships and establishing new ones.

Why Advertising is so Important Right Now

You may be wondering how advertising can influence something as personal as customer relationships. Take a moment to think about your relationship with your bank. It’s fairly passive compared to the ones you have with your favorite retailers or service providers, right? That’s because financial services aren’t generally ones that require much personal connection outside of setting up your account and customer service. Now that digitalization has taken away the remaining face-​to-​face aspect of financial services, there’s not a lot left to help these organizations establish personal seeming relationships with their customers. A lack of personal interaction can also keep financial institutions from staying top-​of-​mind with consumers.

How to Advertise

Nielsen says that, “personalizing messaging to meet consumers’ needs, attitudes and experiences,” is the key to fueling customer relationships through advertising. Areas of service/​customer needs that could use a pick me up include:

  • Auto loans
  • Credit cards
  • Home improvement or equity loans
  • Home mortgages
  • Personal loans
  • Refinanced home mortgages
  • Student loans

These are all services that consumers use their primary banks for, but have been declining in usage as more customers switch to other companies for these services. “In fact,” says Nielsen, “digital bankers are 20% less likely than those who do not do any digital banking to use their primary bank for ancillary financial services needs.” So, one way for financial institutions to build customer relationships and increase their revenues is to promote these offerings to existing and potential customers. “(36%) of U.S. consumers say it’s important to be familiar with brands so they can determine if they are a right fit for their needs,” says Nielsen.

Which types of advertising media should your financial services clients be using to build customer relationships? Check out their target audience’s profile on AudienceSCAN on AdMall by SalesFuel to find out. For example, last year, the most popular forms of advertising among Online Banking Customers were direct mail, TV, and social media ads.

Photo: MayoFi