Digital Wavefront

Today financial services providers, whether they are banks, investment firms or insurance companies, want desperately to deepen existing customer relationships. A key driver of deeper customer relationships centers on a trait often labeled “customer advocacy.” Simply put this trait is the perception by the customer that the firm acts in their interests and not just what’s best for the firm.

Unfortunately, today there’s a mother lode of mistrust because too many institutions have looked the other way. And while a customer may not switch providers as a result, persuading that customer to buy additional products and services becomes problematic despite the advancement of marketing tools and technology.

Forrester Research has created statistical models that demonstrate that customers who do business with financial services companies who rate high on customer advocacy are most likely to consider buying more products from that company. Here are 4 common themes demonstrated by these companies along the customer advocacy dimension.

1. Simplicity - Help customers simplify their lives – whether it’s offering free financial advice or making it easy to navigate on a website or landing page.
2. Benevolence - In many relationships there comes a time sometimes labeled as a “moment of truth.” With insurance providers this often occurs when filing a claim. The best of the best deliver empathy when a moment of truth arrives. They listen, they care and they deliver. The customer remembers that moment for a long time and often shares that moment with others.
3. Transparency - It’s all about being straight with customers. This is especially true when it comes to fees and rates. Today many investment companies are still woefully unclear about management fees and other charges levied against holders of mutual funds. Understanding insurance policies can be daunting in terms of exclusions and definitions around what’s covered and what’s not.
4. Trustworthiness - This is the toughest one to master because the business models for many firms cause their reps to be selective with the truth or simply not give impartial advice when asked for it.

The good news is that there are some companies who are true customer advocates and their clientele has rewarded them with additional business. My hat goes off to the insurance industry that has made great strides in delivering customer advocacy. Companies such as USAA, AAA Life and Amica come to mind but there are others as well. And banks are beginning to try harder, especially smaller community banks.

While it stills takes great marketing to drive loyalty, delivering customer advocacy makes those efforts all the more powerful and accountable to the bottom line.