When speaking with banks and financial services in the wake of COVID-19 upending the economy, I’ve continually stressed the importance of re-framing and expanding upon our perceptions of what being “there” for our clients means during a crisis of this scale and magnitude.
Initially stemming from a novel virus with immediate implications for the healthcare industry, COVID-19’s impact quickly expanded into a personal financial crisis for consumers. We are now in a deep, broad, and painful recession. And while the country has hopefully rounded the corner on the health-side, the financial crisis is just getting started.
Marketers should anticipate consumer spending to remain contracted for the foreseeable future, due to interrelated factors stemming from consumers being:
- Logistically unable to spend at previous levels
due to industry closures and health concerns
- Tangibly unable to spend due to loss of income
- Psychologically unable to spend due to fear of
future income loss or diminished economic prospects.
This decrease in spending will prolong the recession and stifle recovery, putting more pressure on consumers to manage their money well during this time.
That’s where you come in.
Part of the initial challenge for financial services during this crisis has been ambiguity, both from dealing with a new form of modern crisis as well as inconsistent government responses. What would be done to help consumers? What rules and policies might be eased or lifted to aid banks, etc.…? This has led to uncertainty and confusion. And I know (because many of you have told me) that it’s also led to hesitation and concern about how to engage with consumers during this time, fearing a misstep could further erode trust and loyalty – to be sure, the Great Recession has had a long tail. But banks should be encouraged to remember that this is not 2008. The Financial Services industry did not cause the present economic crisis, and consumers know it.
However, even though FS is not the cause of the crisis, your industry has an important, and ongoing role in the response. So, what does that look like in practice? Here are some examples.
Foreground Reassurance in Mass-Market Messaging. During this period of heightened turbulence, consumers are largely looking for reassurance from financial services institutions. In addition to valuing logistical notifications like new branch hours, policy changes and other similar concerns, consumers told us they want to know their money is safe. In fact, the majority of the consumers surveyed in our Gartner Consumer Community expressed a desire for straightforward security-focused sentiments, like Brianna, a high-income Millennial, who said, “Tell me that my money is safe, that I will not be penalized if I can’t or don’t pay something on time.”
Focus on Tactical Assistance in Direct Customer Messaging. Direct communications with customers and prospects via email, direct mail and brand websites also deliver these key messages of reassurance but are most effective when framed succinctly in how brands can help. Our research shows consumers were already overwhelmed by the amount of content in their lives prior to the pandemic, so it’s not surprising (and research proves out) that customers want relevant, concise and actionable emails centered in your brand’s zone of expertise.
Service Flexibility and Crisis Response in the Near-Term. This is a crisis, and millions are hurting. Customers are looking for understanding, empathy, and flexibility in finding solutions to the challenge they’re facing. We asked our Gartner Consumer Community panel what they would like to see their bank do for them or their community. More than one in four desire increased flexibility for making payments on mortgages or other loans, including waiving late payment and overdraft fees. These findings are underscored by larger Google Trends that speak to widespread financial concerns.
Strategize around Sustained Economic Disruption and Consumer Financial Pain for the Midterm. Whereas it took just six weeks to see dramatic surges in consumer concerns over their ability to pay bills, it will take far longer for these numbers to start trending downward. From preparing for a credit crunch and anticipating heightened customer retention challenges to focusing on changing physical footprint needs and planning for virtual engagement technology, financial institutions have to be preparing for the ways in which this pandemic will continue to impact both the lives of customers as well as your ability to continue engaging with those customers.
These action items represent just a starting point, but the most important thing is to remember that financial services will have an ongoing role in this crisis. To not step firmly forward into this opportunity could result in appearing tone-deaf or out of touch with the reality of your customers.
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