What Should Banks Be Telling Their Customers?

Opinion  Research Corporation issued a press release highlighting the results of a survey it recently conducted. According to the release:

“Nearly half of those surveyed (46%) said the bank in which they have the most assets was not communicating with them enough. Mutual funds fared slightly better than banks, with 42 percent of respondents that hold the majority of assets there expressing disappointment in the level of communication from their provider.  Brokerage firms appeared to be doing the best job of keeping their customers informed, with sixty-two percent of respondents that hold the majority of assets there indicating that the level of communication has been good.”

My take: Look on the bright side: A majority of those surveyed (54%) did say that their banks was communicating with them enough. And nearly six in ten respondents said their mutual fund provider was doing a good job of communicating.

The problem here is that we have nothing to compare this to. In normal times, how many consumers think that their bank communicates with them enough? And how do we define “communicate” in this regard? Are blatant marketing messages considered “communication”?

Elizabeth Glagowski of 1to1 magazine was right on with her comment on the 1:1 blog:

“At this point, even a simple mass email or direct mail piece to reassure (or prepare) customers would definitely go a long way. am a customer of many financial institutions. Only one has sent me any type of communication explaining its role in the financial landscape. It really made a difference to me as a customer.”

I did a quick check of the largest banks’ Web sites to see if any had posted a message online. The result: Only a few have posted anything. One example: Wells Fargo.

It’s a shame that few banks have established a blog — each day brings new news (is that redundant?) that is great blog fodder for banks to communicate with their customers about.

It’s too late for banks to start a blog now (for the purpose of communicating about the crisis, not in general). But it’s not too late for them to put up a message on their Web sites (especially with nearly of some banks’ customers coming online to check account balances or pay bills on a regular basis).

Not to take WF to task here, but I would suggest writing a letter a little different from what it published. My suggestion would be to publish a letter that talked a little more about the situation itself. Help customers understand how the industry got into this situation in the first place, why other banks are having trouble and — this is the tricky part — how to know whether or not they should pull their money out of the other banks they do business with.

This last part is the one that most banks will struggle with. With some firms running full-page ads touting their newly superior rates, it leaves one consumer (me) with the impression that they’re vultures picking over the newly killed. Banks have got to recognize that few customers put all their eggs in one basket (or bank), and that consumers have a lot of reasons for doing so. It would be nice for my bank to assure me that the piddly amount of money I putin a CD with the bank across the street from them (which was opened because it offered me a better rate for the next 6 months than my primary bank did) is OK to keep there.

The end result of this financial crisis is not going to be the consolidation of accounts with the banks left standing. It’s going to be the opposite — further dispersion of assets across institutions. We Boomers are already of the mindset that we would never have all of our accounts with one bank. This crisis is going to lead a lot Gen Yers and Xers to feel the same way.

So what should banks be telling their customers? The answer is simple: The truth. The truth about what’s going on in the industry, and what customers should do about it (that’s best for the customer, and not necessarily the bank).

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Update: For more on this, go here and here.

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10 thoughts on “What Should Banks Be Telling Their Customers?

  1. Financial institutions should tell their members/customers the truth? >gasp!< What a shocking suggestion! This will NEVER fly. I am aghast! I think you are causing some light-headedness, possibly fainting, in FI board rooms with this daring recommendation.

  2. @Mike: Your research here is right on. Here’s another annoying thing: I mentioned this idea (re: special communication w/ customers thru Web site and email) to someone at a large bank.

    He said “But we don’t have a lot of our customers’ email addresses.”

    I replied “Then send an email message to the customers whose email address you DO have.”

    DOH!

  3. Ron – in your opinion, is this finally the event that will get FI marketers thinking? Most of the communication that I’m seeing between FIs and their customers/members is just more of the same. Nothing at all that indicates any empathy for the concerns that their customers may be experiencing.

    Additionally, if there was ever a time that the Executive team of the FI needs to be picking up the phone and calling, or getting out of office and meeting with, the best customers/members – this would be it! If you still don’t know who those customers/members are that are contributing to your bottom line, shame on you.

    I’m still laughing at the comment you got from the banker about the e-mail addresses…

  4. In contrast, the community banks and at least 1 CU have been all over External communications related to the crisis – at least here in Florida.

    We’re seeing a lot of uber-folksy trust-me TV spots:

    “Hi, I’m the President of XXX Community Bank. Even though I should never be in a TV spot because I’m a horrible actor, I ‘d like to tell you we actually have cash here and it’s safe. Need a loan? Want your money to be safe? Come see us”.

    Certainly could work, especially down here where starting then selling Community banks to the majors is something of a blood sport; a lot of the deposits currently at the majors were originally deposited in Community banks.

    How many e-mail addresses do you think he has?

  5. @Jim. Regardless of how many email addresses he has, I can tell him this: He better not send marketing offers via email. Unless he’s sending corny jokes thru email, it won’t get read down there.

  6. Couldn’t agree more. Funny story here. I live in Middle TN. Back around August I called 2 or 3 local community banks. With all 3, I left a voice mail as follows: “Hi, I’m a marketing consultant and I’m looking to find a bank that wants to step up and be a leader in the community and form deeper engagements with its customers.” Only 1 bank even returned my call. When I explained that I was suggesting a social media exploratory, he proceeded to tell me how they were just fine with their current brand marketing and made it clear they do not really waste a lot of time running ads. The social media did intrigue him, but basically, the subtext seemed to be, “I don’t really understand social media hence I don’t want to try it.” I think their main marketing efforts are bi-monthly wiener roasts in the main branch parking lot.

  7. I am one of the many in the communications business who cannot understand the reticens of the finacial industry during the economic downturn. My experience with banks tells me that they’d rather play it safe and hope for the best rather than putting something out that they possibly would rue at later on. Yesterday I thought that had all changed when a very larger, international bank that I do business with sent me a letter that began, “Dear Valued Customer”. But it was just a federally mandated letter to tell me that I had exceeded my transaction limit for the month. They did offer to let me speak to a representative about alternatives to keep me from ‘screwing up’ again. How nice.

    I’m keeping score. I have 5 finanacial partners. Only 1 bank and 1 investment organization have written to me on the topic. A mortgage lender I have done business with more than 4 years ago sent me a note on the topic. These three are top of mind and top of list for me.

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