Boutique consultancy cg42 is taking a fresh look at banking brands by isolating a banking operation’s weaknesses and measuring the impact they could have on retaining customers.
“We recognised a gap in how most companies measure their brands in that they focus on basically key strengths… Very little time is spent analysing the areas were the businesses fail, and specifically where the businesses fail with their current customers,” said Steve Beck, the managing director of cg42.
Beck is currently in the process of patenting the research method and idea behind brand vulnerability.
Although brand vulnerability studies can be conducted on almost any industry, the first publicized study by cg42 applied to retail banking. In perhaps a happy coincidence for cg42, the release of the research last November coincided with the height of the Occupy Wall Street movement as it spread across the U.S. and resulted in coordinated efforts like Bank Transfer Day.
The Retail Banking Vulnerability Study surveyed current customers of the top 10 banks in America, and measured the weaknesses in services and its possible impact on whether a customer may leave the bank or not. Although none of the top banks were cg42’s clients, Beck said the research report has been requested and downloaded by every bank that was studied. (Download a copy of the study here >)
In the 2011 study, the banks that had the highest brand vulnerability were Bank of America, Citibank and Wells Fargo.
By analysing where businesses fail, management can not only understand and address their own weaknesses, but also see where competitors might fail and innovate their own services to attract customers away from other banks, Beck said. He added that it is also helpful to look across the entire industry and see what a main weakness could be and address it from that level.
For example, one of the top frustration for customers at the Bank of America, Citibank and Wells Fargo was that they felt they were being ripped off on incidental charges and overdraft fees.
In addition, knowing and understand where top customer frustrations lay can also help banks prioritise how to address a problem when it does occur. Beck said brand vulnerability will help banks differentiate between problems “that is a very significant business issue that needs to be addressed in a major proactive way versus something that needs to be fixed but maybe is not as important.”