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WHY BRAND ENGAGEMENT REALLY MATTERS TO FINANCIAL FIRMS

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BRAND-ENGAGEMENT

By John Fisher, Managing Director, FMI Group and author of Strategic Brand Engagement

Financial firms and retail banking across the globe have been through a torrid time in recent years, but rather than breast-beating and saying sorry yet again, surely it is time for senior banking executives to put things right? The problem is where to start. Trust in financial brands has never been so low.

John Fisher

John Fisher

In a recent CFA Institute global study of over 2,000 high net worth investors, just over half ‘trusted’ their financial advisers to do the right thing, despite market upheavals and scandals. But the results were patchy. In the UK, for example, only seven per cent did. There has been a catastrophic collapse in consumer confidence in the financial sector and financial analysts know all about the effect of diffidence in any marketplace. But what has brand and brand engagement got to do with the job of rebuilding trust?

Contrary to what most non-marketing VPs believe, rebuilding the brand is not about more mea culpa advertising, sponsoring African village projects or reducing fees. When you damage the brand, you lose the trust of your customers and it is not easy to rebuild that trust with paid-for promotion because almost everyone in the developed world knows that promotion is only a function of money and its sincerity is routinely discounted. Anyone on Facebook or Twitter will tell you that.

So, if you cannot get back to where you were with promotional messages, what can you do? You could do worse than start with your employees, your distribution chain and your advocates. In other words, it is not a question of just redefining your public image. It is all about regaining the trust of your staff first. Because without their renewed belief in what financial services have to offer, the consumers stand no chance of getting the message, no matter what the ads say.
LV=: a case study in back to basics

In 2006 traditional general insurer LV= recorded a significant loss which was put down to an ivory tower management mentality and employees who were simply doing their hours. A new management team was brought in to rebuild the business. But instead of simply cutting costs and tweaking commissions, it surveyed its 4,000 staff about ‘engagement’ and how internal processes might be improved to better serve their customers. As a result, a series of direct ‘people’ initiatives were undertaken which had the result of raising engagement levels across the business from a below sector average of 64% to a market-leading 83%. Motor insurance policy sales improved by 327% over the period and so did the overall bottom line. The management team freely admitted that without addressing the people issues of trust and engagement the commercial results would not have been possible.

Barclays Bank tackles values and vision
Only last year the incoming Group Chief Executive of Barclays Bank undertook a similar ‘people’ initiative by brainstorming and promoting a new vision or ‘purpose’ as he renamed it helping people achieve their ambitions…in the right way.

In news broadcasts at the time, the new values of respect, integrity, service, excellence and stewardship were prominently displayed on camera behind him as he apologised for the various mis-selling scandals and vowed to put things right. It was clear that the bank had listened to its customers and started the fight back with its own employees as the base for rebuilding trust rather than slick, marketing messages.

Engagement is not just about employees
But it would be a mistake to think that revisiting values is just an HR thing that can be done in isolation while the rest of the business carries on as normal. Consumers and business customers can spot a turkey a mile away. True engagement starts to bite when all the other players in the chain, your intermediaries, your distributors, your advocates, your commercial ambassadors, your charity partners all ‘get it’ at the same time. The model of everyone singing from the same hymn sheet is neatly summarised in this diagram from the US organisation The Enterprise Engagement Alliance which represents all those advisers and consultants trying to spread the message that authentic engagement is what counts. In this diagram you can see how the holy grail of complete engagement means having active plans to communicate with all your audiences so they get the same values, wherever they interact with the organisation.

BRAND-ENGAGEMENT

BRAND-ENGAGEMENT

But does it work?
At some stage somebody, somewhere will say that’s all very well but you need to prove that engaging with your employees and wider business partners actually makes a difference. If it’s numbers you want, here goes…

  • High-engagement firms experienced an EPS growth rate of 28% compared with 11.2% for low engagement firms
  • An IBM-sponsored survey of 287 publicly-quoted US firms in 2009 found that those who had formal engagement programmes for their employees outperformed those who did not by a factor of two to one
  • Costco achieved a remarkably low staff turnover rate of just 23% rather than the 66% market rate in food retailing by initiating an employee engagement programme

The evidence is so overwhelming that in October 2013, the Enterprise Engagement Alliance launched the EEA Good Company Stock Index (GCSI) to highlight the performance of engaged organisations and so encourage investors to look for this measure when deciding which stocks to support in their portfolios.

It seems obvious that when you’re nice to people, they are usually nice back. But for that to translate into the commercial world and become a trackable fact has taken a long time to get through. Perhaps as brands (trust) are rebuilt in the financial sector, those who set the values and vision will take note of the direct correlation between engagement and commercial success. To be successful, you could start by being nice to those who do the work for you, because the rest simply follows on.

John Fisher is the author of Strategic Brand Engagement, published by Kogan Page, ISBN 978 0 7494 7013 5, £34.99/US$49.95

For more information please visit: www.fmigroup.co.uk
You can also contact John Fisher at: [email protected]

Business

Mercedes unveils electric compact SUV in bid to outdo Tesla

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Mercedes unveils electric compact SUV in bid to outdo Tesla 1

By Nick Carey

(Reuters) – Daimler AG’s Mercedes-Benz on Wednesday unveiled the EQA, a new electric compact SUV as part of plans to take on rival Tesla Inc and offer more emission-free vehicles to consumers to meet targets in Europe and China.

The EQA, the first of several electric models Mercedes-Benz plans to launch this year, will initially have a range of 426 kilometres (265 miles), with a 500km model coming later, the premium brand carmaker said in a video presentation.

The SUV will go on sale in Europe on Feb 4 at what board of management Britta Seeger described as “very attractive price points”.

Electric vehicle (EV) sales took off in Europe last year as carmakers scrambled to meet European Union CO2 emissions targets. Sales received a boost from subsidies included in economic stimulus measures rolled out in France and Germany, in particular.

Sales of fully electric and plug-in hybrid models rose 122% across the EU through the first three quarters of 2020.

Mercedes-Benz describes the EQA as an “urban entry model” and board member Seeger touted its “sustainability, versatility and fresh look”.

Electric carmaker Tesla got a head start on traditional carmakers with their vast investments in fossil-fuel vehicles and has dominated global sales. The mass-market Tesla Model 3 is the world’s best-selling EV, followed in distant second place by Renault’s Zoe.

As well as emissions targets, carmakers face bans on fossil-fuel vehicles that come into effect as early as 2030 in some markets.

(Reporting by Nick Carey; editing by Jason Neely)

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Wetherspoon shares higher after raising cash at top end of expectations

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Wetherspoon shares higher after raising cash at top end of expectations 2

(Reuters) – Britain’s Wetherspoon priced its sale of 93.7 million pounds ($127.92 million) worth of new shares at the top end of its expected range on Wednesday, a signal of confidence from investors that pushed the pub operator’s shares 3% higher in morning trade.

The cheap beer specialist said 8.4 million new shares had been placed at 1,120 pence per share – a discount of over 5% to Tuesday’s closing price, but the proceeds raised were at the top of the range it had given when announcing the offer a day earlier.

“We like Wetherspoon’s relentless consumer focus, employee engagement, largely freehold estate and history of evolution. This profile should allow JDW to fast return to its former profitability,” Jefferies analysts said.

Following strict COVID-19 led curbs in December, England went into its third national lockdown earlier this month.

The pandemic-hit hospitality industry has laid off thousands of workers, with Wetherspoon cutting jobs at its head office and airport pubs.

The company said on Tuesday it expects pubs to remain shut until March and that the fresh funds would provide enough liquidity to deal with very low sales after reopening.

It is also considering buying properties in central London, freehold reversions of pubs of where it is currently the tenant, and properties close to successful pubs in an effort to cash in on declining property prices.

“It has a young customer base who have been less fearful of venturing out when restrictions do ease, which does bode well for recovery unless there is another twist in the trajectory of the virus,” Hargreaves Lansdown analyst Susannah Streeter said.

Wetherspoon, which has seen no sales since shutting all its pubs from Dec. 31, had expected the placing to raise between 92.1 million pounds and 93.7 million pounds.

($1 = 0.7325 pounds)

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Subhranshu Sahu and Shailesh Kuber)

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UK regulator slams waiting times, patient records at trans clinic

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UK regulator slams waiting times, patient records at trans clinic 3

By Rachel Savage

LONDON (Thomson Reuters Foundation) – England’s only youth gender identity clinic faced criticism on Wednesday from the country’s health regulator, which said patients “at risk of self-harm” were waiting too long to access specialist care.

A report by the Care Quality Commission rated the clinic run by London’s Tavistock & Portman NHS Foundation Trust as “inadequate” – the worst of four ratings – and said 26% of patients waited more than two years for their first appointment.

Two thirds of patients referred to a specialist at the Gender Identity Development Service had to wait for more than a year.

“Many of the young people waiting for or receiving a service were very vulnerable and at risk of self-harm,” the report said.

“The size of the waiting list meant that staff could not proactively monitor the risks to all patients waiting for their first appointment,” the report added, noting a sharp increase in referrals from 77 in 2009/10 to more than 2,700 in 2019/20.

The regulator’s criticism follows a high-profile court ruling last month that stopped doctors from being able to prescribe puberty-blocking drugs to under-16s without a judge’s approval.

Trans activists point to studies showing the drugs may help alleviate mental health issues trans young people suffer going through puberty in their birth sex, but others say the drugs have unknown long-term mental and physical effects.

The High Court ruling fueled a global debate about the age a child can transition gender.

The Tavistock, which was granted leave to appeal the judgment this week, said it took the Care Quality Commission’s report “very seriously”.

“(We) would like to say sorry to patients for the length of time they are waiting to be seen,” a spokesman for the Tavistock said in an emailed statement.

“We very much accept the need for improvements in our assessments, systems and processes … and will be agreeing a full action plan with the CQC to address further concerns.”

England’s National Health Service (NHS) said it had “previously recognised the need for a review of how to best meet the needs of children and young people with gender incongruence”.

It launched an independent review of the gender identity service in September.

Late last year, a transgender teenager took legal action against the NHS over the long wait to see a specialist at the Tavistock clinic. Under NHS rules, specialist care should be available within 18 weeks.

Besides the concern over waiting times, the Care Quality Commission criticised the clinic over the quality of its medical records.

“There was no clear rationale for clinical decision making,” it said.

(Reporting by Rachel Savage @rachelmsavage; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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