The Three Key Drivers of Brand Relevance for Financial Services Companies
With fast-changing consumer behaviors, companies need to dig deeper into consumer-centric strategies.
The past year has been full of events few could have predicted. Companies are coming under increased scrutiny, whether it’s for what they do or do not say in response to the crises of COVID-19, racial injustice and political unrest. All are wondering how to keep their brand relevant to customers. After all, it’s those relentlessly relevant brands that make a true difference in customers’ lives. It’s, for this reason, the Prophet Brand Relevance Index® has just been released. Surveying over 13,000 U.S. consumers to determine which brands they simply can’t live without, it’s fascinating to see the performance of brands in this current climate.
“After all, it’s those relentlessly relevant brands that make a true difference in customers’ lives.”
Looking at the data for financial services sectors, many brands have seen an uptick in relevance. We’ve observed three key drivers of brand relevance and some learnings for how other FSI’s can continue to create closer relationships with customers by investing in their brands.
Three Drivers of Brand Relevance in Financial Services
1. Deep commitment to customer-centricity
USAA continues to reign as one of the perennial best-performing brands across industry studies because of its devotion to its customers. Eighty-five percent of respondents in the 2021 Prophet Brand Relevance Index said the brand “connects with me emotionally.” Accordingly, in 2020 USAA made the move to return an additional $280M to policyholders and donate over $6M to military members and their families affected by COVID-19. It’s no wonder USAA drives the highest customer loyalty in the insurance industry.
Financial services brands that continue to show genuine empathy toward consumers will continue to see their brands work harder for them.
2. Investment to improve digital-first experiences
Many of our clients told us the events of 2020 rapidly accelerated their digital transformation efforts. Subsequently, many of the fastest risers in the 2021 Prophet Brand Relevance Index were those associated with best-in-class digital-first experiences, like the insurance provider Lemonade, which rose by a whopping 76 slots since our 2019 rankings. Perhaps unsurprisingly, given its innovations in providing a simple, easy digital experience – with rapid, AI-driven underwriting throughout the app – over 90 percent of our survey respondents said Lemonade “pushes the status quo” in the category. Supporting this is its charitable annual “Giveback” program, which sees up to 40 percent of unclaimed premiums donated to non-profits. Lemonade is seeing high switching from competitors as it continues to delight customers – which is novel for the insurance industry – and as a result, its stock has tripled over the past months.
We also saw legacy providers who made major investments in their digital experiences rise rapidly. A leader in mobile-first and open banking, Charles Schwab rose 75 slots in the Index as it attracted investors with its focus on making investing and planning easier. A distinct improvement in its scores around “customer obsession,” respondents particularly called out how the brand “meets an important need in my life,” likely benefiting from its major announcement in 2020 to offer free digital plans to all customers. Charles Schwab also announced an integration with Google Home that allows clients to track portfolio performance information and get updates on positions with interactive voice response requests: “Hey Google, how are my Schwab accounts doing?”
These trends only highlight the need for financial services brands to continue to invest in their digital customer experiences, pushing themselves to better serve the needs not just of existing customers, but to create experiences to attract new generations of prospects.
3. Rapidly shifting consumer behaviors
2020 saw consumer spending patterns upended, as people adapted to a new lifestyle, forced by quarantine to spend less on restaurants, travel and nights out with friends and more on grocery delivery, financial services products and essentials.
This shift in spending also opened up historic increases in saving and investment. The pandemic saw new swaths of consumers spending more time and money on investing in a frothy market, and less time paying each other through peer-to-peer payments.
Perhaps unsurprisingly, we saw investment firms like Vanguard, the highest-ranked FS brand, rise to the #27 spot of the index, with 97 percent of respondents saying it meets an important need in their lives. While previously star brands like Venmo and Zelle slipped dozens of spots.
These findings reinforce the importance, for the largest financial services brands, of maintaining relevance across spending, borrowing, lending, investing and protecting, to maintain close relationships with customers and relevance even as the market shifts.
These are just a sampling of our findings. If you’d like to see how your brand performed and learn more about the Prophet 2021 Brand Relevance Index, you can find more here.