“When I was young, I thought that money was the most important thing in life; now that I am old, I know it is.” – Oscar Wilde
Whilst we can agree or disagree with Oscar Wilde on this, one aspect is certain: money is omnipresent and consumer neuroscience offers fascinating insights into our emotions when dealing with money.
The psychology of money and financial decision-making
We’re all different. And so are our motives when it comes to financial decisions. This week, let’s look at what this means for our choices when it comes to the financial institutions we do business with.
As with any other brand, banks have an image in consumers’ minds. This image is the sum of associations consumers have with a brand based on its communications, look and feel, products, services, experiences, etc. When done correctly, a brand is a set of differentiating promises that link its products to the right consumers.
Now, some of these promises are made on an overt, explicit level, such as the claims “Happy Banking” (Bankwest) or “Passion for Performance” (Deutsche Bank) or by way of the products on offer, identity and mission statements, etc.
Other promises are made on a subliminal, subconscious level. One example for this would be the colour orange of Bankwest, which signals fun, easiness and flexibility, whilst the dark blue of Deutsche Bank subconsciously promises establishment, competency and trust.
So which consumers choose which bank?
In order to understand this, we must first acknowledge that different personality types have different motives and strive for different outcomes when it comes to dealing with money.
While some of us are cautious spenders (colloquially: stingy), with long-term saving goals, avoiding risks and seeking financial stability and security in the future (Balance dimension in the limbic brain), others live fully in the moment, spend all they have and beyond, have a tendency to seek instant rewards and are in the market for quick, easily accessible credits and loans (Stimulance dimension in the limbic brain). Again, other consumers strive to strategically expand their capital and are receptive to more ‘complex’ financial products like equity funds (those who are driven by the Dominance system, called Performers).
Consumers’ interest in equity funds; by personality type
Source: Dr Haeusel, Emotional Boosting
Overall, the propensities to take risks and, consequently, the products relevant for different consumers vary dramatically.
How can banks become more relevant to consumers’ emotional drivers?
A few years ago the head of strategy at a major German bank decided that classifying customers by income and assets was insufficient.
After listening to a speech on limbic® customer profiling by our partner, the renowned neuromarketing expert Dr Haeusel, the head of strategy approached Dr Haeusel to apply the introduced limbic® segmentation to the banks’ customer database. His aim was to address customers in a far more targeted way, and to offer the right services, communications and products to the right customers in order to increase satisfaction, loyalty and ROI.
In the following project, the bank’s customer database was profiled and it was determined for each customer, which emotional cluster they belonged to. This information made its way back into the electronic customer files and today, even when a customer enters the bank, the consultant on the counter sees the limbic® customer type on the screen and is able to instantly connect with and service the customer according to his or her needs.
Personality-type specific motives towards money
Source: Dr Haeusel, Emotional Boosting
Where do some of Australia’s banks sit in the consumers’ minds?
Banks emphasizing safety lie in the balance sector and attract corresponding consumer types, namely Harmonisers and Traditionalists. For example St George bank positions itself as “friendly local banking, exceptional business banking, and an authentic, grassroots commitment to our communities” – all values in the emotional dimension of the care, trust, approachability and safety.
