Acquisitions can be both a strategic move and a transformative challenge. When a financial institution acquires a new institution, it’s not just about numbers and assets; it’s also about people and relationships. Gaining and maintaining consumer loyalty after an acquisition is crucial. Here are the steps a financial institution can take to foster trust and loyalty among newly acquired consumers.
Plan For Success
A solid integration and communication plan for all of the internal and external stakeholders needs to be in place before the acquisition takes place. This ensures a positive start to the process.
A Deloitte survey found that 17% of bank customers that had been acquired switched at least one of their accounts to another institution. Almost two-thirds of the survey respondents who had switched an account to another bank did so within the first month after the deal was announced.
Transparent Communication is Key
Communication is the cornerstone of any successful relationship, and this holds true for financial institution relationships with consumers as well.
A transparent and open dialogue with consumers about the acquisition is the first step toward gaining their trust. Clearly explain the benefits it brings, and assure them that their interests and investments remain a top priority.
When PNC acquired BBVA USA it began communicating with customers as soon as the acquisition was announced. They created a dedicated website and customer service line to answer questions and provide support.
Maintain Consistency in Services
Change can be unsettling, especially when it comes to financial matters.
To ease the transition, it’s important to maintain consistency in the services offered. Ensure that existing products and services continue without disruption, thereby reducing the inconvenience that could be associated with the acquisition. If there are enhancements or new offerings in the pipeline, communicate them clearly and provide adequate training and support.
Invest in employee training to ensure that staff members from both institutions are knowledgeable about products and services. This helps maintain consistency in the way services are delivered.
Showcase the Strengths of the New Entity
Highlight the strengths and advantages that the acquisition brings to the table. This could be expanded services, broader geographical reach, or access to innovative technologies. Make sure consumers are aware of the added value they now receive as a result of the acquisition.
When Amazon acquired Zappos they knew Zappos was famous for its outstanding customer service, including a generous return policy and 24/7 customer support. Amazon not only maintained these practices but also leveraged its own expertise in logistics to improve Zappos’ delivery and inventory management. By building on the existing strengths and showcasing ways they could add to those strengths they made customers feel comfortable with the transition.
Community Engagement
Continue and enhance the acquired institution’s tradition of community involvement and support for local charities and events. This commitment to community values resonates with existing customers and demonstrates a continuity of corporate culture.
In the case of the PNC/BBVA USA acquisition, they announced an $88 Billion Community Benefits Plan to expand economic opportunity support for minorities and low- and moderate-income individuals and communities.
This contributed to PNC being able to retain a high percentage of BBVA USA’s customers. According to a study by J.D. Power, PNC’s customer satisfaction rating among newly acquired customers was higher than the industry average.
Seek Feedback and Act on It
Encourage consumers to share their thoughts and concerns about the acquisition. Conduct surveys, focus groups, or one-on-one interviews to gather feedback. Act on this feedback to make necessary adjustments. This not only shows that you value their opinions but also helps in fine-tuning your strategies to meet expectations.
Personalize Consumer Interactions
One of the advantages of acquiring a new company is the wealth of data and insights that come with it. This data gives you the ability to personalize consumer interactions. Understand their preferences, needs, and financial goals. Tailor your communications and offerings according to how they want to communicate and what types of offerings they want to see. A personalized touch goes a long way in building consumer loyalty.
Invest in Employee Satisfaction
Amazon recognized the importance of Zappos’ employee-centric culture and continued to support it after its acquisition. Zappos’ “Deliver WOW Through Service” philosophy and its emphasis on employee happiness remained integral to the company’s operations.
As the partnership grows, acknowledge and celebrate milestones together. Whether it’s anniversaries, or successful goals, commemorating these moments creates a sense of belonging and shared success.
Be Trustworthy
Trust is fragile and takes time to build but can be shattered in an instant. Uphold responsible business practices at all times, including data security and strict adherence to regulatory guidelines.
Acquiring a new company is not just about gaining assets; it’s about gaining trust. By prioritizing transparent communication, maintaining service consistency, personalizing interactions, and upholding ethical practices, a financial institution can pave the way for a loyal customer base.
Be More
Overall, acquisitions that successfully retain customers do so because they respect and nurture the qualities that made the acquired company unique, while also leveraging new strengths to enhance the customer experience. Offering more technology, more education, more opportunities for financial growth and insurance protection will make you the “new and improved” partner that will engender loyalty among newly acquired customers.