What can financial firms in the UK do to earn back the trust of consumers?
More importantly, is consumer mistrust exclusive to financial firms - or is it a sign of bigger issues dogging many UK brands?
These are just a couple of questions we aimed to answer in a recent Vision Critical study.
First,some background. According to recent stats, consumers' lack of trust in financial firms in the UK has led to a 92% rise in cases taken up by the financial ombudsmen service. A distinct lack of understanding and faith within the banking and financial sector, as well as an increase in awareness of consumer rights, has culminated in an unprecedented level of complaints; so many in fact, the Financial Ombudsman Service (FOS) is considering taking on 1,000 extra staff members.
A recent Vision Critical study emphasises the lack of faith in the financial sector has adverse and insidious consequences on brand perception, as consumers share detrimental views with others. But it's worth asking how this consumer mistrust compares to other providers.
Our study shows that public perception of the financial service industry is actually no worse than other sectors:
- For each of the top 30 consumer financial brands, an average of 24% of consumers passed on negative comments to someone they knew.
- Utility, media and telecom firms are slightly worse off with 27% on average.
This finding suggests that most brands can learn from what the financial industry is currently going through. To remain top of mind and profitable, all brands need to earn - or in many cases, regain - the trust of consumers.
What can brands do to regain people's trust?
Here are four lessons for insight and marketing professionals:
- Find ways to drive positive word of mouth
Believe it or not, positive word of mouth is very evident. When consumers are happy with a product or service, they share this information with friends and family. Of the people we surveyed, 38% indicate they recommend brands to people they know.
This stat is great news for industries and brands that currently struggle with public perception: positive changes made now can help turn public perception around as people talk about the great service they receive from brands. Fixing issues that consumers complain about is a good first step in rebuilding a brand's reputation.
- Do not ignore younger consumers
We often assume older generations talk more about poor service; possibly because the older demographic hold more complex financial products. However, according to the F.O.S., younger people are more than twice as likely to know about the F.O.S. through word of mouth, showing active discussion of financial issues.
Even more importantly, the 18-34 demographic is more likely to recommend and pass on negative comments to people they know than any other age group. 57% of 18-34 year olds in Great Britain have recommended financial brands to someone they know. It is, therefore, essential that financial service companies appreciate the importance of engaging the younger demographic who too have an influence in brand reputation.
- Measure actual as well as theoretical recommendation
To alter perception, financial firms need to measure the actual behaviour and opinions of their consumers instead of relying purely on Net Promoter Score, a measure of "theoretical" recommendation.
Insight managers need to measure consumer's behaviours and opinions by engaging consumers in a two-way dialogue; this will give a more accurate insight into their actual opinions, allowing you to act upon both negative and positive feedback.
- Aim for transparency
Ultimately, re-establishing trust and improving brand perception can only be achieved through transparency as well as clearer and more frequent communication between brands and the consumer.
Just like many global brands, financial firms should consider using online platforms such as social media and insight communities to start the process of engaging consumers. These brands should take action soon to show consumers they are listening. After all, listening without action is unlikely to change people's minds.
The issues dogging the financial sector and other similar industries probably won't go away overnight. Many of the issues will take some time to change. But by working closely with the sector's biggest critics - their customers - financial firms can start rebuilding what's left of their reputation and avoid further damage.