Customers vs. believers (why a brand purpose helps you outperform your peers)
I was working with a bank on a customer acquisition effort. We were designing a test to find the best way to engage prospects – something that would help potential customers take action while not breaking the bank (no pun intended). Someone pointed out that promoting the free checking account product always created lots of activity.
It's true. 'Free checking' efforts always seem to get lots of attention, attracting new account opens.
But, free checking customers tend to have lower balances, sign up for fewer additional products, and don't stick around as long. That's not exactly ideal customer for any bank. Yet, this is a strategy I've seen lots of banks pursue. Because it's easy to show success (we got a bunch of new accounts!) And to kick the can down the road when it comes to those problems like accounts that are more expensive to service than they're worth and high account closing rates.
Now I'd like to believe we can turn these problems into opportunities. To believe that if they just understood what our awesome purpose could mean for them that we could turn them into the ideal customers we seek. I'm optimistic to a fault about this.
Which leads me to the question, "Why don't we just start with that awesome brand purpose?"
Why a brand purpose = more success
By bringing a brand purpose into our positioning we start to separate ourselves from all the other free checking white noise out there. Right from the beginning.
Will we have a smaller universe of prospects? Yes. But they will be easier to pursue. And more rewarding to engage. Ultimately, it's a more lucrative strategy. I've seen it play out. And not just in financial services.
The free checking example is great because it really points out the powerful difference between customers and believers.
Someone who signs on for free checking is a transactional engagement. They need a checking account and you have a free one.
Someone who signs on because of our purpose-driven brand is a believer. Yes, they need a checking account. But we have connected with a much deeper need that we serve.
Look, nobody really wants a checking account. What they really want is a convenient way to understand, access, and feel more in control of their money. So that they make more confident decisions that help them feel more at ease and even happy with their money.
Imagine that insight powering the purpose behind the brand. What if we made it about transforming lives? That is something that could attract believers. Those who do some pretty wonderful things that those transactional people won't do for us. Like willingly do even more business with us. Forgive our honest missteps. And recommend us to others.
This is why purpose-driven brands excel. It's why they outperform the short-term gains of just trying to get more account opens.
We can fight the brutal battle for more customers. Or we can choose to gather in our believers. And reap the rewards.