Harvard Business Online

Cater to Your Customers' Anxieties


Posted on Harvard Business Review: March 11, 2010 2:24 PM

This post was co-authored with Anand Rao and Jamie Yoder

One of the most important things that executives forget when they craft their service model is the need to address customers' anxieties. In today's grim environment, this is more important than ever for all companies but especially for financial services firms.

Since the financial crisis of September 2008, many people have been scared to invest. Between the end of September 2007 and early December 2008 retirement accounts alone lost nearly $2.8 trillion, or 32%, of their value. Although the recent rally has been accompanied by an improvement in investor sentiment, it has not reached the levels of 2007. Little wonder: Famous institutions disappeared overnight, had to merge abruptly with their competitors, or barely skirted bankruptcy.

Money is a feeling-laden, complex, and deeply social product related to people's sense of power, risk, and self-worth, and emotional intensity about money is at an all-time high for understandable reasons. Consequently, when financial services firms think about their service offerings, they have to be especially careful to explicitly design the emotional message of their approach.

Whether the service offering in question is virtual or embodied in bricks and mortar, the key to creating emotionally satisfying experiences is to understand the core worry of your client and to craft a direct, simple, emotional message. As a wonderful essay in The Boston Globe recently pointed out, simple, easy messages are more likely to be believed.

One of the most famous historical examples of a business leader who understood this is Elisha Graves Otis. Back in mid-1800s, when Otis was introducing his new elevator, he was having a heck of a time convincing a skeptical public that his invention was any different from the dangerous grain hoists or home-made lifts they had seen before. He could have attempted to explain his clever new design, which included a patented safety. Instead, he had himself hoisted up an open shaft in front of a large audience at the Crystal Palace in New York. When he was far above the exposition floor, his assistant cut the rope supporting the elevator. The crowd gasped. But the car stopped after falling a few inches. Otis Elevator Company was on its way to becoming a phenomenal success. Otis dealt directly and simply with his audiences deepest emotion — their fear of plummeting to their deaths.

A good example of a current marketing program that directly addresses the emotional soft spot of clients is Liberty Mutual's Responsibility Project. The theme of the website is individuals must take responsibility for their actions. It employs a combination of professional actors and user-generated content to create stories about individuals who act responsibly for the good of their families and communities. It creates a context that is broader than the individual investor. And by focusing on the selflessness, it creates a brand perception that the company is responsible in all its actions, including how it deals with policyholder money.

Another example is New York Life's "Guarantees Matter" web site, which recently won the Best in Class Interactive Media Award. (Full disclosure: New York Life is a client, and we helped it with this initiative.) The purpose of this site is simple: to explain that because New York Life is owned by its policyholders it is more likely to keep its promises to them. The site delivers a simple message: through any financial disaster, New York Life is there.

What is interesting is that the company chose not to provide a performance-based comparison (e.g., how the returns on assets in life insurance compare to the market's returns). Instead, it crafted a simple, emotional message: Our guarantee is solid.

Our questions for you are:

• Do you know the core emotional trigger of your customers?
• If so, are you addressing it simply and directly?

Anand Rao is an expert in decision theory and a partner in Diamond's insurance practice. Jamie Yoder leads that practice.


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