Ideology dominates the cultural conversation. Around the world, consumers are putting their personal convictions front and center — they are buying on belief — and companies must learn to navigate this new reality.
The 2017 Edelman Earned Brand study set out to understand how polarizing societal issues are affecting the consumer/brand relationship and uncover how brands can achieve a deeper connection with consumers. The study’s findings can help provide a roadmap for financial services companies navigating this new normal. Below are a few key points and insights for the industry.
First, companies need to understand consumer’s expectations. Fifty-one percent of Earned Brand respondents said they believe brands can do more to solve social ills than government. This is important for financial services companies, which need to create a link to consumers using the power of shared beliefs and values. This will foster a connection with “belief-driven buyers,” consumers who choose to buy, switch, avoid or boycott a brand based on its stand on social issues. These consumers are key stakeholders for financial services companies; they are both younger (60 percent of millennials in our survey are belief-driven) and have a higher income (57 percent of higher income buyers do so based on shared beliefs).
Second, companies must know that silence is not an option. Sixty-five percent of belief-driven buyers in our survey said they stopped buying a brand solely because it remained silent on a controversial or political issue they believe the company has an obligation to publicly address. Financial services brands that understand this concept and have spoken up or taken action include:
- State Street, which published guidelines to staked companies encouraging them to improve gender diversity and address gender bias in hiring;
- PayPal*, whose CEO, Dan Schulman, publicly canceled plans to open a new global operations center in Charlotte, North Carolina, following passage of a state law that prevents cities from creating non-discrimination policies based on gender identity;
- Goldman Sachs, whose CEO, Lloyd Blankfein, took to Twitter to voice criticism of President Trump’s decision to leave the Paris climate accords;
- and Berkshire Hathaway*, whose CEO, Warren Buffet (among many other CEOs), condemned President Trump’s decision to repeal the Deferred Action for Childhood Arrivals program.
Next, it is important for financial services companies to know that, should they ignore this new normal, they will find themselves in no brand’s land. What is no brand’s land? It is a place where companies stay silent and do not speak out; where companies fail to connect on belief and instead have indifferent relationships with consumers; and where companies are most vulnerable to disruption and competition. Companies need to go beyond no brand’s land, to act more than talk and encourage others to do the same.
Finally, it is key for financial services brands to understand that if they share the beliefs and values of their consumers and other stakeholders, those same consumers and stakeholders will reward them. Our research shows belief-driven buyers will reward companies that share their beliefs by:
- Buying loyally: 51 percent of belief-driven buyers buy more often and buy only that brand when the brand supports their position on an issue;
- Buying for the first time: 67 percent of belief-driven buyers bought a brand for the first time because of its position on a controversial issue;
- Speaking on a company’s behalf: 48 percent of belief-driven buyers advocate for a brand and defend it against critics when a brand supports their position on an issue.
Financial services brands are working every day to earn trust. The Earned Brand study tells us that these companies need to not only speak their values, but also to live them and communicate them through the lens of doing social good. This behavior catalyzes relationships with customers and other stakeholders, building a foundation for committed relationships to flourish.
Deidre H. Campbell is global chair, Financial Services sector.
*Edelman client