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The polarization of your customer landscape

Apr 08, 2015

Banks have traditionally served their customers by providing a mix of products and services. This made perfect sense since the vast majority of the customers were looking for a blend of efficient operations and useful guidance.

The customer landscape has, however, drastically changed in the last five years or so. The majority of customers is not looking for a ‘balanced’ approach anymore. Rather, it is now divided into two opposite types (figure 1).

On one hand, transactional customers know what they want. They treat you as a commodity, they don’t want to meet, they focus on costs, and they buy on price and convenience. In contrast, consultative customers have a problem, they value your time, they want meetings, they focus on advice, and they buy on expertise and trust.

 The polarization of your customer landscape
 

Figure 1: The center cannot hold. Take these two opposite customer types into account
when devising your sales strategies (adapted from Neil Rackham, IESE Insight, 2014).

Today’s customers are either transactional- or consultative-oriented, but rarely both with a given bank. In fact, a customer can be transactional-oriented with all their banks, except with the one they trust more and will consult for advice.

Failing to distinguish which of the two relationship types each of your customers has with you can lead to inadequate marketing, messages and communications. This in turn translates into wasted efforts and investments on your side, and annoyance or even dissatisfaction on the customer’s side.[1]

Now, customers have changed in other ways as well. They are mobile, they are pro-active, they want seamless and real-time interaction, and they want a personalized and contextual experience.

Addressing these challenges will be key to build a strong, differentiated customer experience. Nonetheless, taking the two opposite customer types and buying patterns into account when devising your customer interaction strategies is an important yet often overlooked starting point.

More generally, the overall bank strategy and positioning will be affected by this shift in customer buying patterns. Whether the bank decides to serve one type of customers or both, its products, sales, and relationship strategies must clearly differentiate between the two.

David Andrieux, PhD



[1] I experienced this dissonance very recently. One of my banks engaged with me from a consultative perspective whereas my expectations were on the transactional side. As I couldn't perform simple - but important - bank transfers within a reasonable timeframe, they ended up losing my business.