Friday, 3 October 2008

Credit Crunch - What Business Are The Banks Really In?

As many of you will be aware, one of the most penetrating questions anyone can ask an organisation is "What business are you in?" One of the seminal thinkers to promote this question was Ted Levitt in the much vaunted HBR article Marketing Myopia.

The essence of Levitt's thinking lies at the heart of true strategic marketing philosophy because it causes business people to consider what their business 'does' rather than what it 'is'.

As far as Banks and Consumers are concerned I would like to raise attention to what I will call Consumer Myopia and the way this has been exploited by the financial 'services' (sic) industry.

I believe that it should be illegal for financial institutions to portray what they do as a 'service'. This is entirely misleading, and plays fast and loose with the notions of service and relationship marketing developed by the Nordic School and key writers like Christian Gronroos.

The use of the term 'service' is skilfully used to manipulate perceptions. It is an attempt by The Banks to create a positive Euphamism for the fact that they SELL financial products that are designed to make profit for the bank. Let me be clear, I am not against organisations making profits. I am against those that fudge the issue and pretend that they are organisations of care and welfare by hijacking the term 'service'. Does anybody seriously accept that Banks should be thought of in the same way as the Medical, Fire, Police, Military, Educational and other public services!

Banks ultimately are in the business of trust. We trust them (and they try very hard to convince us that they are trustworthy)with our hard earned cash. They know that as soon as we 'trust' we abdicate our power and control and significantly we relax our critical reasoning. Its time we got this back!

Look and listen carefully to the next bank adverts you see. Not the 'operational' ones that tell you about savings rates, but the one's that imply they are there to save you from the hassles and dangers of life. They constantly use a technique of social influence known as 'Fear and Relief' They bring to our attention all of the bad things that might happen in our lives and then position themselves as the provider of relief from fear. This is not service it is manipulation and exploitation.

The Banks and other Financial Institutions should only be allowed to state that they 'sell money products', and explicitly state that they are in the business of making money from these products. This information should not be in the small print but on the 'front page' in plain English in the same way that we have cigarette packet warnings.

For The Banks to imply that they can fund our material and consumer desires is merely exploiting the 'mind work' that the advertisers have done to us to 'soften us up'. The Banks should not be allowed to promote their 'money products' as means to acquire things that have not been saved for. That they can do this is fine, and an uninfluenced choice is the right of everybody. I'm taking issue with the fact that they conflate what they do as a business with the appeal of other products and therefore cannot ever have the best interests of their customers at heart! The sale of their products is never 'unbiased'.

Let's get the debate moving on this! If you think that Banks should be restricted in how they portray themselves as a 'service' perhaps you might Stumble or Digg this article, because they have alot to answer for.

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