On the Holmes and Rahe stress scale, 24 of the 43 most stressful life events have a financial component. Mortgages made the list three times! These important events – like starting a new job or having a child – have serious financial components and emotions can run high. Financial marketers can drive sales if they understand how emotional branding influences decision-making.
The first thing to understand is that people aren’t as rational as we like to think we are. We’re driven by emotions. An extreme example would be a parent running into a burning home to save an important family photo album; A perilous feat that’s emotionally motivated. We make decisions like this (albeit in a way less dramatic fashion) everyday.
Me? Just last weekend I picked up a rice cooker at Target. This wasn’t a rational purchase – it’s no sweat to make rice on a stove – but I was sold on the emotional idea of flipping a switch to “cook” and having the process carry itself out.
Emotions are even endemic to the very way we talk about brands. When you think about it, it’s kind of weird when a person says, “I love my iPhone!” Of course this isn’t literal, but it’s easy to see that our attachment to brands can run pretty deep.
For financial institutions, emotional branding conveys to your customers that you can help them put out fires. It develops customers’ confidence in your brand. They see you as a resource that can make them less worried or anxious about financial decisions. Emotional branding helps put customers at ease.
Avoid This Mistake
A Gallup interview can shed a little more light on how our emotions influence us.
“I will give you an example of human behavior and behavioral economics called the endowment effect. If an organization offers a set of features to customers and one of the features is rarely used or maybe not used at all, the organization may decide to remove that feature from the product offering. After the organization communicates the removal of the feature, everyone goes crazy and the phones light up with people complaining and threatening to close their accounts. Once I’ve given you something, regardless of whether you use it or not, you perceive it to be of value. I can’t take it away from you because you have an emotional connection to that feature, even though the feature is not something you use every day or even intend to use.”
Whether you’re enacted an emotional branding strategy or not, people will still relate to your brand on an emotional level.
An Emotional Branding Strategy That Works
Financial institutions should work to alleviate a fear, anxiety or concern that their customers are facing. A powerful way to do that is to provide answers.
Your customers are looking for help. They want to save money and avoid mistakes. They want to make the right decision for whatever stressful life event they’re facing. Marketers should communicate their institution’s capability to help customers with their problems.
The key to strong emotional branding is to eschew sales messages. Focus on the emotion first and foremost.
-A customer needs a mortgage and is really stressed out!
-The bank can explain the fundamentals of how mortgages work
-The customer learns the basics and develops confidence in their ability to choose the right financial product
-The customer gets connected with a person at the bank who can help them find that product
Along this journey customers develop a better appreciation for the services their bank can provide. Customers who are emotionally engaged like this represent a 23% premium in terms of share of wallet and profitability.