Community financial institutions often promote their “commitment to their community” and claim that their dedicated staff and attention to social responsibility sets them above their competition. At least a handful of individuals in each of our clients’ management teams cite their community commitment as their primary attribute.
But is it really? Does “commitment to community” matter anymore? Do your customers care that you care? Or do they simply want the latest technology?
What does your website say and show?
I decided to take a look at community financial institutions’ websites to gauge their social responsibility to the communities they serve.
I was glad to see many financial institutions backed up their claim of community commitment with proof, such as donations to local charities, developing a Community Advisory Board, and taking part in community fundraising activities. They proudly posted photographs of their employees sporting company gear at local events or giving one of those oversized cardboard checks to the community animal shelter.
Other financial institutions…. not so much.
Sure, their websites told visitors they supported their community and cared immensely about the people they served, but they presented little evidence to support their statements.
In the writing world, we call that model “Tell, not show” (or “filler,” depending on the reader’s mood). In literature, that pattern often leads to an incredibly tiresome and unremarkable novel which acquires a number of scathing Amazon reviews.
It’s all about social values
So why does any of this matter?
According to the 2017 Cone Communications Corporate Social Responsibility Study1, 87% of consumers will purchase a product because the company shares their social values. The survey also reported that 76% would pass on a product because the company advocated an issue that did not align with their beliefs.
Another study, by the University of Southern California2, revealed that 91% of millennials and 85% of average U.S. consumers preferred brands associated with a social cause.
These studies indicate that consumers are incredibly sensitive to the social causes their money is supporting, and it can be a far larger factor in customer acquisition and retention than many financial institutions realize.
For a small, regional financial institution, commitment to their community can prove a key feature, setting them apart in consumers’ eyes from megabanks with more resources. In fact, the 2015 Consumer Banking Insights Study3 showed that 66% of U.S. consumers, including 59% of megabank customers, would rather bank at a community financial institution than a large national bank.
But if you build it, will they still come?
So why aren’t people flocking to their community’s local bank?
Although consumers may prefer a community financial institution, the Consumer Banking Insights Study also revealed that 31% of megabank customers say they don’t switch because small institutions lack the products and technology they want and need, while 34% say they simply haven’t thought about it or were unaware of their options.
Community financial institutions cannot use their support of local social causes as a crutch to excuse their lack of contemporary technology or innovative products.
If their only evidence of social responsibility is a tagline below their bank’s name or a brief statement in the “About Us” section, that crutch is made of popsicle sticks.
Proven commitment is best paired with contemporary products and services, because consumers won’t stay with an organization that can’t deliver their customers’ requirements.
1Cone Communications. “2017 Cone Communications CSR Study,” accessed Aug. 10, 2017.
2University of Southern California. Psychology of Successfully Marketing to Millennials, accessed Aug. 10, 2017.
3Bancvue. 2015 Consumer Banking Insight Study, accessed Aug. 11, 2017.