Building a Better Bank

Building a Better Bank
Tags: Consumer Behavior, Customer Experience, Retail - General
April 14, 2010 - Annamaria Turano

How many of us filed our taxes “early?” How many of us delayed our tax prep, work, and filing until the last minute – causing some kind of stress on our families, our accountants, and ourselves?

In the realm of retail shopping, Reluctant Shoppers* are defined by their ability to “put off” shopping as long as possible. The actual problem might never fully materialized or any new solution is a “nice to have” vs. a “need to have.” This is a frustrating and challenging dilemma for retailers because your mission is to convince your target that they actually have a problem and need to buy a solution. In the case of Reluctant Shoppers, the consumer’s current solutions are “good enough” and the underlying problem never fully surfaces.

Banks are retailers too. But not all Banks understand the importance of creating and executing a true retail experience for their account holders.

When was the last time you changed banks? Probably not in the past 5 years – unless your bank closed its doors, you moved, and/or your place of employment moved. More often than not, you bank with the bank that is most convenient and aligned to your commuting habits – even factoring in the side of the street or corner of the intersection which is most convenient for you.

TD Bank knows this to be true – and bases their whole strategy around poaching consumers who no longer find their original bank to be terribly convenient. With its “building a better bank” strategy, TD doesn’t consider itself a traditional bank – it positions itself as a retailer that always provides a “WOW!” to their customers.

TD Bank’s success is driven by innovative, consumer-based marketing practices with the goal of innovating and improving its legendary customer experience. Their marketing levers are truly consumer-inspired – such as late hours (8pm!), Sunday hours, the free penny arcade (which I frequent even though I am not a TD customer), good coffee while you wait in queue, etc. A particularly intriguing promotion in recent months was to offer cash back on grocery purchases. This promotion demonstrates how well TD Bank knows and respects it target – and seeks to encourage switching by offering much-appreciated real-time rewards for everyday purchases vs. traditional banks which offer frequent flier miles.

Given TD Bank’s success (some key metrics: adjusted net income grow +24% in 2009 vs. 2008; TD Bank is one of only 3 North American banks to receive an AAA credit rating from Moody’s), competing financial institutions should look harder at how they want their customers to bank vs. how their customers actually want to “shop.”

*Reluctant Shoppers are defined in more detail in Stopwatch Marketing: Take Charge of the Time When Your Customer Decides to Buy (Portfolio: 2008) by AnnaMaria Turano and John Rosen