Loyal To A Fault: Doing Business in the New Economy

Loyalty takes on some strange dimensions in today’s world. In everything from the Presidential election to routine bank transactions, loyalty—a character trait that once implied rock-solid behavior—has become not only more flexible but even malleable.

The best way to look at it may be that like every other aspect of modern life, loyalty is dynamic. It must be earned, then retained, then perhaps earned again. And that’s why the subject is the first item on the agenda at #BankSocial, or the Bank Social Media Conference, set for April 7-8 in Newark, N.J. It’s a gathering designed to offer attendees the latest social media initiatives in this critical discipline. It will feature everything from success stories to lessons learned.

By any definition, this issue is vital. To begin with, let’s acknowledge that the industry itself has a perception problem. As recently as three years ago, the annual American Banker/Reputation Institute Survey of Bank Reputations found that on feelings of, admiration and other positive perceptions, financial services ranked dead last out of the 16 industries listed. Still, it’s a little like voters saying they hate Congress in general but keep re-electing their own Congressman. Banks overall rated only 56 points out of a possible 100, but the number jumped to 69 when those same respondents were asked about their own bank.

On a related note, contemporary culture is essentially dependent on fickle attitudes—every day many consumers favor a new blog, a new site, a new app, etc. We’re always in pursuit of the next big thing, which means that credibility and reputation developed over decades of hard work can go by the wayside.

The glut of options adds to the complexity. Technology advances have lowered the barriers of entry into this once-daunting arena, and today we constantly see new players in different corners of the banking market, all aided by emerging channels of access to information. Customers are newly empowered, giving rise to what The Financial Brand referred to more than five years ago as the ‘overbanked’ consumer. That’s someone holding open deposit accounts with at least three institutions at any given time. Indeed, back in 2012, the Ernst & Young Global Consumer Banking Survey found that nearly a third of all retail banking customers had this number of bank relationships.

So how and where does loyalty fit into all this?

Andrew Davis, the keynote presenter at #BankSocial, has the eclecticism needed to thrive in this challenging field. His 20-year career has taken him from local TV to the Today Show, he’s worked for the Muppets, and produced for MTV. Through books, appearances and consulting, he pushes companies to revisit the way to go to market.

At #BankSocial, his presentation is titled “The Loyalty Loop: How Smart Experiences Drive New Revenue,” and it focuses on telling customers’ stories and differentiating the experiences provided. That’s the best (and perhaps only) way to build loyalty in the new world.

That’s just the keynote; there are many other presentations on the agenda, each designed to offer a fresh approach to doing what’s needed to survive and thrive in the new environment. It’s not as if loyalty can’t be gained—in fact, it’s there to be earned. But the rules have changed and the methods required are very different.

That’s why some of us from Banking.com are coming to #BankSocial. Hope to see you there.

Written by Jack Dougal

Jack Dougal

Jack Dougal is Banking.com's resident news reporter. He writes regular blogs covering the latest stories and key developments in the global financial services industry.

Read more articles from Jack Dougal