WE’RE HEARING that in the wake of the financial crisis, which sullied the public image of the financial services industry, traditional advertising and marketing messages from the banking industry may be falling on deaf ears.
Kevin McCutcheon, a client partner who oversees much of the financial services business at Bazaarvoice, told me that customer reviews may be one way lenders can rebuild trust with consumers.
“We think it’s really important for financial service providers, more so than for just about any other industry, to let in some customer oxygen into the customer experience.”
And he believes the housing finance vertical in particular has some special challenges in regaining consumer confidence.
“The mortgage products generally are the most challenged products when it comes to word of mouth,” he said. “The mortgage application process itself is more painful than it has ever been, largely due to increased regulation.”
Moreover, because most loan originators outsource pieces of the process, like title work and appraisals, the lender does not have complete control of the customer experience.
Because applying for a home loan is so difficult today, McCutcheon said it’s important for lenders to define who they are trying to engage in the consumer review process. Engaging customers too early, during the difficult process of getting approved, may invite negative feedback because of the hassles and obstacles consumers face.
“Ideally, you want to engage customers who have been all the way through the process and have been approved and funded a loan. They are the ones who actually own your product and have experience with it,” he said.
Because social media sites such as Facebook, Twitter, LinkedIn and Pinterest are “far from the cash register,” online reviews and feedback are often most effective if they are available on the financial firm’s own site, where consumers can begin the loan application process. Bazaarvoice.com tries to help companies create “an earned media asset” through consumer feedback.
“We are trying to help them turn their asset into a social experience that is close to where they do business with their customer.”
Bazaarvoice provides the social technology platform that helps companies capture customer word of mouth and have that word of mouth moderated and displayed through any digital or online platform the company has. The goal is to provide structure for the unstructured data that comes in from consumer feedback. The company does not classify or code messages based on the sentiment or tone of the reviewer, however.
Company officials are quick to assert that they don’t censor or alter the views of consumers. The moderation may entail blocking messages that are profane, off-topic or don’t meet the company’s guidelines, but the company doesn’t swipe away negative comments or stack the deck in favor of positive ones. Firms can, however, ban certain topics, such as too big to fail, litigation, TARP or the name of the company’s CEO. The authenticity of the comments is key to their effectiveness in generating word of mouth.
In the financial services space, firms also have to be mindful of rules and regulations from agencies such as FINRA and the SEC that may affect how firms can engage with consumers via social media and customer feedback. Those rules often limit the collection of personal information and require extra efforts to maintain data security around consumers. Lenders also have to be sure they can respond to regulators’ requests for reports about their online communications.
“It’s important to get compliance folks involved early in the process.”
McCutcheon acknowledges that no company is immune from negative commentary, and that disgruntled consumers are often the ones most anxious to speak out via social media. People who’ve had a negative experience often want to “flame out a brand,” and they’ll seek to do so on platforms independent of the company’s control.
“What we are trying to do is give a voice to the silent majority of customers who are overwhelmingly happy with their experience,” he said.
That may sound a little reminiscent of Richard Nixon, but in a world where Millennials are three times more likely than baby boomers to rely on social media when evaluating products and services, harnessing consumer feedback may be key to getting the attention of younger, and often more skeptical, consumers.
Bazaarvoice.com’s research has found that Generation X and Millennial customers are more distrustful of large institutions than their older counterparts. That makes it more difficult for companies to control the image of their brand through their own marketing, advertising and public relations efforts.
“The brand has sort of lost the right to own and drive the conversation,” McCutcheon said.
Another challenge facing companies as they seek to harness the power of customer feedback is the increasing reliance upon mobile devices and apps, which sometimes don’t lend themselves to customer reviews and comments. Mobile apps have usually been developed to enable self-service financial services, such as paying bills and checking balances. McCutcheon said some customers do all their online banking via mobile apps today rather than going to their bank’s website.
Bazaarvoice.com is seeing to broaden the mobile experience to make it a more powerful tool for cross-sales and upselling by incorporating more product service and information alongside of word of mouth on mobile apps. The hope is that consumers can get the same level of information through their digital interaction with a bank regardless of whether they are using a website, a mobile app or a kiosk.
Bazaarvoice.com developed its advertising technology in house. The company is based in Austin, Texas and has offices in Chicago, New York, San Francisco and overseas. The public company’s shares are traded on the Nasdaq stock exchange.
Ted Cornwell has covered the mortgage markets since 1990. He is a former editor of both Mortgage Servicing News and Mortgage Technology.
