Scandal upon scandal has hit the banking sector and evidence of collusion has left customers feeling none are to be trusted. So, when a whole group of brands are considered toxic how do consumers respond – especially when the service is one everybody needs, amounting to distress purchases.
Brand damage usually results in rejection by the public and often by an exodus of customers. Competitors can benefit as disaffected consumers drift in search of alternative suppliers. But what happens when you have nowhere to go, when a whole sector has lost brand confidence? We all need our banks but now we see them as something akin to distress purchases. Brand choice is no longer an issue. Customer paralysis seems to have set in.
For a canny bank brand, however, there is an opportunity here. With nobody prepared to jump ship, retail customers will still be aware. There is space for a new clearly differentiated offer. But first, the offer must be authentic. Customers will be way too wary of bankers’ words.
I believe the damage done to the big banking brands is so serious that the contender to win the hearts and minds of retail customers will come from a much smaller or newer bank. Sure, the big boys are necessary for the business arena with investment and custody services etc. but for retail customers, emotional attachment is key.
Whoever emerges as the people’s champion is likely to succeed through the medium of advocacy. We don’t trust the words of the banks, so we listen to the words of friends and trusted advocates. Perhaps the time is right for social networks to take centre stage as the consumer stirs into action.