Voices: the CMB Blog

If you believe the news you might imagine Americans have a pretty low opinion of bankers. It seems cut and dried; the recession laid bare a lot of anger over banks’ role in the economy’s crash.  But new insights from our Consumer Pulse research on banking approval, suggest bank customers’ views are a bit more balanced. We asked over 1,400 bank and credit union customers how they felt about their primary bank and the industry as a whole.  

We found that while it’s true that most Americans aren’t happy with the banking industry they are pretty happy with their own banks. This kind of discrepancy isn’t shocking or unusual— Congress has abysmal approval ratings, but people tend to rank their own representatives quite highly, clearly personal experience counts for a great deal.  

When we looked at customers' banking approval and experience we found some things worth noting:  

• Approval ratings vary by bank type. Community banks and credit unions were rated more highly than regional and large national banks, with credit union customers giving high marks to many elements of their banking experience, from fees and rates to commitment to the community and remote banking offerings. In fact 85% of credit union customers rated the value they got from their bank as “excellent.”

• As for what doesn’t appear to impact approval ratings, those with household incomes under 50k gave just slightly higher approval (51%) to their banks, compared to those making 100k or more (47%).

• Just 9% of customers who disapprove of their banks (and 2% of all respondents) say they’re actively looking for a new bank, but willingness to make the switch also varies by bank type. A full 22% of regional bank customers who disapprove of their bank say they are actively looking for a new bank, versus only 7% of large bank customers. One explanation for this disparity is that while large banks are known for accessibility and product breadth, and small banks are recognized for personal service and lower fees; regional banks are often chosen for their proximity. And as we’ve seen in our previous Consumer Pulse research, increasingly that is not enough.

•  Wondering why customers so displeased with their bank, end up staying? Over half (54%) agree switching banks is a hassle.

Amidst the real anger and displeasure aimed at banks and the banking industry as a whole, the real message may be: don’t underestimate the power of the customer’s banking experience. Fewer than one in five of respondents agreed that “all banks are pretty much the same.” This is good news for banks who can take the opportunity to differentiate themselves from the competition and from a terrible industry reputation.

Download The Future of the full-Service bank Branch here.

Posted by Jim Garrity, Jim is Managing Director of CMB’s Financial Services    practice. He isn't looking to switch banks anytime soon.

Along with millions of Americans-patients,doctors,lawyers and, politicians-health insurers also waited with bated breath for last week's Supreme Court’s ruling on health reform. Now that the Supreme Court has upheld the basic provisions of the law, health insurers face the challenge of understanding how traditional markets will be impacted by the individual mandate and implementation of health insurance exchanges.  

Even with the ruling, there is still much that remains unknown about the law’s impact, and significant uncertainty about how the law will be enforced in each state.  But there are still critical questions insurers must consider now as they adapt to a new era in health reform, including:

• How will this ruling and the establishment of exchanges impact company revenue and profitability?  Are there ways to take advantage of this ruling and increase company margins and revenues?

• How do we compete effectively in an open exchange?  If price is the key criteria to consumer decision making, is there a way to minimize its influence and yet be successful?

• Is there a need to re-examine the existing client base beyond the traditional demographics? Will an alternate classification help create a competitive advantage?

• How do we move beyond the traditional employer sponsored channel?  How can we take advantage of technological shifts?

• How relevant is the present communication strategy? Is there an opportunity to approach the future in a new, cohesive way that complements the product and distribution strategy?

Addressing these questions and mitigating the coming challenges will not be easy; surviving and flourishing in a changing market requires a truly new and innovative approach. We believe insurers must:

• Reconsider how they approach product development – the insurers who will be successful in this new reality will be those who are able and willing to stretch boundaries of what insurance products look like to meet the needs of the customers, including offering supplemental insurance, wellness programs, incentives and monetary gains for meeting health goals, etc.

• Go beyond traditional ways of looking at the market – motivations, attitudes, goals, and behaviors will become as, if not more, important to understanding and effectively messaging to insurance customers. Alternate classification of consumers could help insurance companies underwrite consumers in a more effective and efficient manner.  This could be especially advantageous for smaller insurance companies that cannot compete solely on price; perhaps it is time to start looking at a niche strategy. For a more detailed look at alternative market segmentation for health insurance, read our white paper: A New Approach to Segmentation for the Changing Insurance Industry.

• Embrace the leaps in technology – insurers must explore the possibility of reaching consumers directly (internet, smartphone, etc.), and simplifying the purchasing process.  A simple product lineup with an easy buying process can go a long way in increasing an insurer’s favorability rating.

• Consider a new messaging strategy – the health industry’s transition is a great time to consider resetting the existing image. Great products and great service need great messaging.  What are the goals people are trying to achieve? What is it that truly motivates them? What is it that truly sets us apart and does it add value to our customers’ lives? Is there a need to have specific messages to specific groups of consumers? Think about the answers to these questions. Insurers in the end must be able to convince consumers that they are partners in this journey and are mutually dependent on each other’s success.

Amidst all the uncertainty insurers are facing, we believe that to mitigate the uncertainties of the reform landscape, insurers will have to go back to the drawing board, rethink how they look at the market, engage in product development and address the fundamental goals of their customers. Insurers must recognize and leverage core capabilities that others cannot replicate. Competitive advantages stem from not one but from a series of strategic decisions. The correct mix of product, distribution, message and market coupled with inherent operational strengths (e.g., knowledge of a local market, ability to underwrite at low costs,  relationships with existing customers) can set insurers apart from competition and pave the way to long term success.

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice, when she gets the time she loves going to the beach with her two kids.

We’re pleased to announce Chadwick Martin Bailey was recently named as a “Top 50” firm in the annual Honomichl report of the top revenue-generating marketing research companies in the US. While we’re happy to be recognized for our revenue, what we are most proud of is our continued commitment to our core values—our clients, our approach, and our people.

Our Clients

We are a client-centered firm.  Our clients trust us for the insights we provide them, and we take this responsibility seriously. Our collaborative approach and role as trusted advisors means that insights are translated into practical business advice and solutions. 

Our Approach
Our mantra is solving companies’ problems. We provide the right information in the right way so clients gain insight—not confusing or burdensome data dumps. We maintain a methodological center of excellence, and use integrated data sources, rigorous research methods, and leading edge technology to solve real world problems and guide effective business decisions.  Our offerings are not “off the shelf,” but rather acknowledge that every company’s situation is different and needs to be treated that way.

Our People
From the very beginning, we have strived to build a culture focused on team work, common sense, and excellence. The CMB client experience is so much about our people; our clients benefit not just from the efforts of individuals, but from a team of smart and committed people sharing their high-level skills and experience. We are a strategic learning organization where all of us are expected to be active learners and contributors.  I am most proud of the way our consultants, analysts, and methodologists work together.

Learn more about why CMB stands out from the crowd:

 

Posted by Anne Bailey Berman. Anne is the President of Chadwick Martin Bailey and enjoys volunteering in the community, traveling with her family and spending time in her vegetable garden.

All seasoned business travelers have their share of funny or painful airline stories, and I’m no exception.  But a particularly memorable incident on a recent flight to SFO got me thinking, and it’s the genesis for this blog.

Long story short, I was sitting by the window and celebrating the open middle seat next to me when a 6’8” 350 lb. man shuffled down the aisle and plopped into it.  Our conversation went exactly like this:

Giant:  “I know, I know, I’m a giant. Sorry.”
Brant:  “I have to admit, I was chanting ‘not him, not him’ from the moment you walked on.  Sorry.”

From there the conversation (between my snores) was amiable.  And then, somewhere over the Great Plains, my new friend spilled cranberry juice all over his seat-back table, and himself.  Have you ever seen a man that size try to clean himself in an area that small?  Not pretty.

My mind ran with this incident, and I immediately started thinking about the seemingly ridiculous (to me anyway) amount of cranberry and tomato juice that is consumed on airplanes.  The data below is completely fictitious, but I bet it is directionally accurate.

 

Now, what does this have to do with market research?  Not much… but I’ll reach.

To me, the chart above segues nicely into a discussion of the differences between Market Segmentation, and Needs-State (AKA “Occasion-Based”) Segmentation. 

Market Segmentation groups people or businesses into mutually exclusive and collectively exhaustive (MECE) groups.  It is limited by the realities that people and businesses are complex, don’t always think or behave the same way all the time, and because of this any segmentation scheme is forced to be an over-simplification of reality.  However, despite these limitations, great market segmentation can provide businesses with a common lexicon to use to describe the audiences it serves, prioritization of who to invest in, and the foundation for understanding what to say and where to say it in marketing at a brand level.  Market Segmentation is great for setting strategy.  If I’m a cranberry juice company, I’m going to go after segments that drink a lot of juice (kids, active women in their 40s, health/energy motivated people, etc.)   But it is far less useful in some important areas … namely in identifying the best places to reach our core segments, what improvements to make, and how to grow our business beyond the core.  This is where Needs-State Segmentation comes into play.

Needs-State Segmentation groups together occasions (e.g., shopping trip types, travel trip types, usage occasions and information gathering moments) based on common needs, rather than grouping people or businesses.  While the Needs-States are mutually exclusive, each person/business can experience multiple needs states as they interact with the category.  Needs-State Segmentation has two major orientations:  purchase decision occasions, and usage occasions.  A segmentation focused on purchase decision occasions will break down all of the critical moments in the purchase funnel where the process of buying is impacted (from seeing a commercial on T.V. to chatting with a friend / WOM).  This type of segmentation will dramatically improve a company’s ROI on their integrated marketing plans by highlighting the most important occasions to hit and what to communicate in them.  In contrast, a segmentation focused on usage occasions will lay out all of the moments when actual product usage occurs and what distinct needs must be fulfilled in each.  This is the bread and butter of innovation for both short-term improvements within an existing line of products and for longer-term high growth innovation where a new niche in the market is identified (like when Red Bull figured out that it could target the mid-night clubbing need state rather than the afternoon-pick-me-up occasion).

Market Segmentation and Needs-State Segmentation complement each other.  I can only assume that cross-country flights are a unique need state, where multiple segments swerve from their typical behaviors and begin pining for bright red liquids.  The question here is do the bright red liquid companies know this?  And if they do, do they understand the need state deeply enough to take full advantage of it?

Posted by Brant Cruz and Lori Wahl, Brant is resident segmentation guru and the Vice President of CMB’s eCommerce and Retail Practice. Read more of Brant’s thoughts on segmentation here.

Lori is a former CPG marketer turned researcher, who now runs her own strategic qualitative research consultancy, BIGinsightz.  Lori is an expert in strategic market research, having built three best-in-class insight processes for her former company that drive product, branding and selling strategies.  You can reach her at BIGinsightz@gmail.com

Infographic designed by Stephanie Kimball. Stephanie is CMB's Marketing Operations Manager. You can follow her on Twitter at @SKBalls