Credit, collections & insolvency news
Consumers are prioritising brand reputation above both product and price when choosing a finance provider, according to new research by Amp Corporate Communications.
When asked to place the three in order of importance, 37% put brand reputation in first place. This was followed by product (34%) and then price (24%).
Additionally, 73% of consumers said that when looking for a financial product – such as a loan, credit card or mortgage – if they saw an offer from a finance provider they didn’t already use, they would search online to find out about the company’s reputation, before making a decision. This figure is even higher for younger generations, peaking at 82% for those aged 18 to 24.
The consumer survey follows research with finance executives which showed that eight in 10 think reputation management is more important for businesses now than it has been previously.
Dee Gallagher, founder of Amp Corporate Communications which conducted the survey, said “It’s positive to see the alignment here between executives in financial services and consumers, in terms of recognising the importance of brand reputation. The findings demonstrate that a company’s reputation is front and centre when it comes to attracting new customers, so having strategies in place to strengthen and support that is essential for growth and sustainability.”
Looking at the factors affecting reputation, financial instability weighed much more heavily with consumers than with the executives surveyed. Consumers ranked this as their biggest concern, with 26% saying their trust would be most impacted if they became aware a company was facing financial difficulties. This may be a legacy from the Covid-19 pandemic, where consumers witnessed many big brand names collapse and perhaps now feel more cautious about a company’s financial standing.
Service issues ranked as highly with consumers as they did for businesses, coming in as the second most important concern for both. Poor customer service – such as service failures, low customer ratings and poor communication – would have the biggest impact on brand trust for 22% of consumers, according to the independent survey.
Jacqueline Dewey, CEO of financial review website Smart Money People said “It’s essential to make sure people know your product or service delivers on its promise.
“Showcasing positive customer reviews is a great way to build credibility, whilst regular communications at all stages of the customer journey play a key role in building long-lasting trust and strong customer relationships.”
Compliance was high on the agenda for both businesses and consumers. The C-suite leaders surveyed cited this as their greatest reputational risk, whilst for consumers, it made the top three, with a fifth (20%) saying their trust in a company would be impacted most if they read about, or were affected by, any legal or regulatory concerns.
Philip Naughton, CEO of compliance consultancy Cosegic, said “There’s been significant evolution in the role compliance plays in supporting a firm’s strategic objectives, and that’s going to continue, given the ongoing intense regulatory pressures that businesses face.”
Unsurprisingly, data breaches would also impact trust if personal data was compromised, with 19% of consumers saying this would have the biggest impact, yet only 6% placed cyber attacks impacting service as being the most detrimental to trust. This perhaps illustrates the inevitability attributed to cyber attacks today. However, given that executives placed cyber attacks much higher on their list of concerns, the more relaxed attitude from consumers could also be seen as a reflection of the increasingly sophisticated security measures that finance providers are implementing to help limit the impacts.
