Personae-Driven Experience Design in Retail Financial Services

Over the years, we’ve had the opportunity to work with several leading retail financial institutions on a personae-driven approach to customer experience design.  The challenge is that most banks, insurance companies, and investment advisory businesses have a long legacy of product-centric, “everything for everybody” ways of thinking.  This leads to decision-making and resource commitments that reinforce “better sameness” rather than true differentiation.

Financial personae are used to describe a holistic picture of how specific individuals think about and behave with their money.   A financial persona includes how an individual thinks about making money, spending money, saving and investing money, donating money, etc…    This insight can be used to design highly differentiated experiences that are attractive and engaging for particular types of customers while ensuring that the experience still works well across the full range of customers in the population.  (See Personae-Driven Customer Experience Design for more background).  

There are several niche retail financial services organizations that are leveraging deeper customer insight and an out-of-the-box mindset in order to redefine the customer experience.  For example:

  • Umpqua Bank. With 146 “store” locations in Oregon and California, this growth-oriented retail services organization has been recognized by the Wall Street Journal, NY Times, Business Week, Fast Company, and CNBC for their innovative customer experience.  Their branch design is part upscale hotel, part retailer.  One of the things that is highly distinctive is Umpqua’s productized “banking blends” targeted at individual consumer and small business preferences.  For example, one of these banking blends, called “Club Carefree 50,” is geared toward people 50 or better with benefits such as travel discounts, The World’s Greatest Reads Book Club, Club Carefree 50 Community Connection Corps, and Health and Wellness programs.  Umpqua has a highly professional approach to service with the branch managers and staff cross-trained as “Universal Associates” responsible for delivering “Ritz-level” service. They have appeared 34th on Fortune’s 2007 list of “100 Best Companies To Work For.”  Since 2001, Umpqua’s organic loan and deposit growth has run 39% and 37% respectively.
  • AMPLIFY.  This Austin TX based credit union has a goal to provide more innovative, simple choices that help customers achieve more.  There are no teller windows or cubicles.  AMPLIFY branches have café style seating, wireless internet, gourmet coffee, music.  Employees use wireless table PCs, so they can sit down with customers.  Employees line up for customers rather than the other way around.  AMPLIFY provides online and mobile banking options. In addition to its own branches, AMPLIFY leverages a network of “shared branches” locally and nationwide.  AMPLIFY provides financial workshops in their branches and articles and educational information on their website.

There is a fundamental difference between having an “identity” and having “personality.”  An identity gets you recognized; a personality makes you attractive.  American Airlines has an identity; Virgin Atlantic has personality.  Ford has an identity; BMW has personality.  These two banks have personality.  That personality is driven by delivering an experience that is highly differentiated and focused on addressing the emotional and rational needs of one or more target customer personae.

The Emergence of an Individual’s Financial Persona

Each individual’s financial persona is shaped by a wide range of factors that are deeply imprinted on their perceptions, interpretations, evaluations, and behavior with money.  One important factor is an individuals’ earliest and most influential childhood experiences with money; how they watched their parents worry about, argue about, and celebrate over money.  This is influenced by the family’s financial situation and whether one or both of their parents had dysfunctional financial attitudes or behaviors.  It is also influenced by whether they really understood what went into making money rather than feeling that it just “appeared.”  Another factor is the way each individual interacted with their parents and siblings on anything even remotely associated with money.  Did they get what they wanted? Was money used as a reward or punishment?  Did they get an allowance and was it enough or was it more/less than their friends got?  Were they encouraged or forced to save?

An individual’s financial persona tends to be relatively stable over time.  While an individual’s beliefs and short-term priorities may change based on their experiences, maturation, and financial situation, we’ve found that foundational elements of an individual’s financial character tend to persist over their lifetime.  As a result, this personae-driven approach complements rather than replaces the demographic or life-stage segmentation work that many retail financial institutions have done.  A customer with a given persona will progress through their life stages in a way that is fundamentally different than a customer with a fundamentally different persona.  (See:  What is the Difference Between Personae and Segmentation?). 

Getting to the Bottom of Individual Financial Characteristics and Profiles

One of our starting places for constructing financial personae was Your Money Personality, by Katherine Gurney.  In this book, Gurney outlines 13 important characteristics that describe an individuals’ relationship to money.  This includes: their level of involvement in actively managing their money and reflectivity in considering past decisions; the degree to which emotionality drives decisions to spend or save; their comfort with risk taking; their balance between spending, saving, and altruism; the extent to which the desire for power drives their financial decisions; the level of anxiety they feel about financial decisions; the extent to which the individual associates their work ethic with financial success; their degree of pride about how they’ve handled their money and contentment with their financial situation; their level of self-determination ranging from believing their financial situation is due to their decisions versus luck; and the extent to which they trust others involvement in financial decisions.

Gurney goes on to define nine psychographic profiles that build on these characteristics.  These profiles create a solid foundation for developing situation-specific financial personae.  These nine profiles are:

  • Money Masters.  Experience contentment and security derived from money. They are the No. 1 wealth accumulators even though they don’t necessarily earn the most. They have the highest level of involvement with their money. They trust the recommendations of others and act on sound advice. Their philosophy is “success through determination rather than luck.”
  • Achievers.  The second-highest income earners, usually college graduates and mostly married. They feel work, diligence, and effort pay off. They’re proud of their achievements. They tend to distrust others’ honesty with money. They are conservative and generally not interested in risking assets they’ve worked hard to accumulate. Protection is a primary consideration. Being take-charge types, they are highly involved and reflective on financial decisions.
  • Entrepreneurs. The most male-dominated profile, driven by passion for excellence and commitment to achieve goals. They are the highest income earners but not workaholics motivated by money alone (a scorecard to measure achievements). They enjoy the power and prestige that money brings. They are proud and reward themselves with the best cars, homes, wines, etc. Investing in the stock market is their favored strategy.
  • Hunters. These individuals are usually highly educated, with a live-for-today financial style. Hunters are more frequently women who make purchasing decisions with their hearts, not their heads. Hunters use impulsive spending to reward themselves. They have a strong work ethic, like the Entrepreneurs, but lack confidence. They attribute success to luck rather than ability and judgment. If they understand their traits, they can make dramatic progress.
  • Producers. These individuals rank high in work ethic but lower in assets due to lack of confidence in money management. This leads to real frustrations: they work hard, desire more but feel the difficulty of getting ahead financially. Financial education important since these individuals need help understanding how money system works. They do not evaluate risks carefully and rarely profit from them. They lack confidence in making financial decisions.
  • Optimists. Money has brought these people peace of mind. They have the fewest anxieties and tend to be proud and content. These individuals are the least reflective, and money decisions are somewhat impulsive. Often in or near retirement, they’re more interested in enjoying their money than making it grow. They are not highly involved with their money, taxes or investments, which might cause stress
  • High Rollers. To these individuals, money presents infinite possibilities. They’re thrill seekers. They enjoy risk but are only mildly interested in where it takes them. They seek power and recognition that money brings them. These individuals tend to be creative, extroverted, and competitive. They work and play hard. Money is an emotional release. They prefer to risk assets rather than sit bored by financial security. If they don’t learn to manage their styles, they can end up with low pride and contentment.
  • Perfectionists. They are so afraid of making a mistake they often avoid making a decision. They will continue to try harder, but lack self-esteem, especially about money. These individuals have the least pride in handling financial matters. They have tunnel vision, consider every angle, and find fault with practically any risky venture. Finding suitable investments is difficult for them .
  • Safety Players. They are the lowest in self determination. Most of their money goes into safe and secure investments. They lack confidence and motivation to reap more growth by taking more calculated risk (even though they are well educated). These individuals take the path of least resistance, feel they’re doing fine, and repeat whatever investment strategies worked for them before.

Applying This Insight

We’ve found that each business situation (e.g., retail banking, insurance, wealth management, etc…) can leverage different personae that build on the characteristics and profiles.  For example, a personae-driven design approach in retail banking could start with the following observations:

  • Retail banks are often not the primary place where the highest involvement and highest reflectivity customers “shop.” In Gurney’s model, these are the Money Masters and Achievers. We’ve found that these high involvement and reflectivity customers often access traditional banking services from non-bank providers, such as using checking associated with their brokerage account.
  • The lowest involvement and lowest reflectivity customers may be in the sweet spot for a bank but, since they are not “switchers,” they’re generally not good targets for optimizing the design of the experience. In Gurney’s model, these are the Perfectionists and Safety Players.
  • This leaves several “swing” profiles that can be targeted with highly differentiated experience designs:
    • Entrepreneurs. An experience design focused on these customers might emphasize the tight integration of personal and small business finances.
    • Hunters & Producers. These high work ethic customers have income but limited assets. They’re disappointed about their financial position, but have high potential. A differentiated experience design might emphasize financial planning, more incentivized savings, and financial education. Hunters many need help breaking the cycle of emotional spending. There are a couple of examples of retail financial services organizations that have done a good job of being attractive to these customers: ING with it’s push around http://www.ihatefinancialplanning.com/ several years ago and, more recently, Ameriprise with the promotion of it’s Dream Book.
    • Optimists. Umpqua Bank offers a productized “banking blend” called Club Carefree 50 that incorporates travel discounts, social networking, a reading club, and several other non-banking services in a way that seems to really fit these customers’ priorities for using money as a means of enjoying their lives.

The most creative of the banking organizations with begin to play a broader role in their customers’ financial lives.  This requires thinking about customers’ experiences well beyond the traditional banking touch points.  We’ve found that the most important insight that companies need in order to identify ways to redefine the customer experience occurs at the non-touchpoints.  (See:  The Customer Experience Does Not Happen at Your Touchpoints).  As such, there are significant opportunities for retail banking organizations to facilitate experiences that go beyond the basic touchpoints.   For example, this might include a broader, facilitative role in how customers spend money.   For example, providing financial education, arranging discounts and privileged access to local service business (who are also potentially small business or middle market clients of the bank), providing alternative means of paying for goods and services via micro-loans, and facilitating fractional or short term ownership / leasing of things.

We are continuing to refine our understanding of the beliefs, emotional reactions, and behaviors associated with different financial personae.   This area is ripe for continued sophistication.  Understanding target personae provides a vehicle for thinking more concretely about the design of a differentiated experience.  In addition, understanding the different personae that exist across the population provides insight into how to design more whole-brained and effective customer communications.

4 Responses

  1. […] the business in terms of the traditional industry boundaries.  In a recent post, I talked about a customer-personae driven experience design approach that starts by considering the broader set of needs that different kinds of customers have… […]

  2. Many companies in the financial services & insurance sectors are trying to crack the code to attract and retain mass affluent customers. Many study just what they mean by that and they try to categorize by income or assets or age e.g., the baby boomers. The reality it turns out to be such a large focus that it leads to no focus. The connection can be made much clearer by looking at persona and developing an offering, promise, an intended customer experience to best match one’s mental model. It is also interesting as you begin to look at the mental model of the customer in the financial services and insurance sectors just what you find. For example – is the “customer” of a life insurance policy the insured or the beneficiaries? The answer is it depends and a little bit of both but too many companies tend to just look at the insured – particularly if they fall into the mass affluent category. But in many cases, regardless of wealth, there is a much different rationale for selecting an agent, an insurance product, or a company. It is the below the water line emotional needs and this is what is missed by many companies who hang their hat on segmentation for making a customer connection. Segmentation does have its merit, as years of marketing have proven, but the persona lens is key to a remarkable customer experience in the financial services & insurance sectors.

  3. Steve, thanks for your comment.

    Your point about Mass Affluent is well taken. It seems like every bank and insurance company says they’re targeting mass affluent. “Targeting mass affluent” is an oxymoron. The group is so highly heterogeneous you can’t target it; the only common characteristic is income or investible assets.

    Defining different customer personae that capture differences in customer “mental models” about making money, spending money, saving money, investing money, etc… provides a way to design experiences that fit well with the way specific customers think and act.

  4. You sound like a smart guy with LOTS of experience.

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