Jeff Judy

Jeff's Thoughts - October 21, 2015

Need vs. Value

As an individual consumer, how do you feel about the utility that delivers electricity to your home?

Oh, sure, you need them. Energy is a necessity, and for most of us in today's world, some of that energy has to be delivered as electricity.

But do you like them? Love them? Trust them? Feel warm fuzzies whenever you think about them?

Point in fact, "whenever you think about them" is likely to be only when you have problems. About the only times you think about your electric utility are when:

  1. You have a power failure, or
  2. They are in the news requesting a rate increase.

Do you trust them? Do you think it is a priority for them to serve the community? Or are their driving motives more selfish, in your opinion?

Perhaps it doesn't matter much. Given that electric utilities operate as monopolies in their market areas, perhaps being needed, if unloved, is good enough.

But it isn't good enough in financial services.

Recently, a site I often recommend, The Financial Brand, offered a nice summary of a recent study by GfK and Personetics, surveying 1,000 U.S. adults about how they regard banks. And about 40% of respondents pretty much saw banks the way they do their utilities, as something they need to have, but that they don't necessarily value, like, or trust. Just over one-fourth of respondents regarded their banks as "trusted providers".

Now, we all want to be appreciated, to be liked and trusted. But some might argue that there may not be that much difference, in business outcomes, between the "utility" and the "trusted" categories.

After all, many consumers interact with their financial institutions mainly through mobile phones and web sites, perhaps with an occasional phone call added in. As long as there aren't any problems, as long as you reliably deliver financial services, can't you count people like that as satisfied customers?

Well, yes, up to a point. The problem is that, unlike the electric company, you don't have a monopoly. You compete for market share. And this survey shows some significant differences in how consumers act in regard to "utility" vs "trusted" providers.

Just consider these two results to start with:

Being needed, even considered a necessity, is good enough for the electric company. But it is nowhere near enough to win you market share.

What steps can you take to move from the "utility" category to "trusted provider"?