2009/10 - A market in turmoil

Consumers are used to thinking that providers are greed driven profiteers or incompetent fools. Now they have what they see as clear evidence that providers are both of these at the same time.

What started as an over-inflated property market and looming credit crunch in the UK is now part of a global recession. In a shrinking financial services market, competition will be fiercer and returns lower.

In a changed competitive landscape, some of the biggest UK financial brands have been reduced to a shadow of their former selves. Faith in financial services and trust in the providers have never looked more misplaced.

Years of carefully nurtured brand marketing built on stories of trustworthiness, expertise and the solidity that comes with history and size have been nullified in just a few weeks. The brands are in tatters, and sceptical questions about the products are turning from “How good are they really?” to “How do I know they are not a complete waste of my money?” And for the first time in living memory, these questions are being asked about ‘safe’ products like savings.

Brands will need to work hard to rebuild their images, and marketing alone will not be enough: they need to show customers that they have changed. And with customers as shaken as the providers by recent events, opportunities exist for those providers less damaged by these events to develop their brands and build on their relative strengths.

What used to be a low-trust, reluctant-respect environment is becoming a no-trust, no-respect environment. And this position will have been underlined by the partial nationalisation of the UK banking system, which consumers and businesses alike will be tempted to see as an endorsement of the view that ‘they’ cannot be trusted to steer their own ship.

However, people and organisations still need these products, and the brands that provide them.

If those brands are going to regain the trust they need, they have to understand how to rebuild it. And so it has never been more important to understand how their customers feel and what they think: what messages and reassurances are needed, and what it will take to make these messages feel credible. The products need to be relevant, transparent and clear cut for consumers.

And it has never been more important to know how to talk to the customer, not just in direct communications, but in advertising and other marketing. The smugness and complacent reassurance that has typified financial services marketing over recent years simply will not wash anymore. But what will?

Customer relationships will need to be rewritten. Gaining and retaining customers and market share will need to be looked at in a completely new context – one in which, in crude transactional analysis terms, the bank may no longer be the adult or parent in the relationship, but the child, and a wayward one at that. Customer respect and loyalty will need to be earned again.