'Green' Strategies to Win Over 'Moderates'
As customers become more environmentally conscious, banks need to keep pace with their own “green” products and services, according to Mark Schwanhausser, financial services analyst for Pleasanton, California-based Javelin Strategy & Research.
“Many consumers are willing to be influenced by green initiatives,” Schwanhausser said during a June 10 Javelin-hosted Webinar entitled “The Four E's of Green Banking.” The presentation was largely based on Javelin's March 2008 survey of 2,350 U.S. online consumers.
Javelin’s survey found that green issues are increasingly important to bank customers overall, with 34% of respondents saying that they no longer received paper bank statements because of environmental concerns. That’s up substantially from the 21% of consumers who responded that way in a 2005 Javelin survey, Schwanhausser said.
Almost half (48%) of respondents to the 2008 survey said that they are more likely to remain customers of a bank due to its green activities, he said, adding that the survey found that consumers can be divided into three categories when it comes to environmental issues:
- “Greens” — who said it is extremely important to them to consider the environmental impact of their purchases and the companies with which they do business
- “Moderates” — who are less swayed by the environmental argument unless there is something else in it for them
- “Skeptics” — who are “tired of the global warming messages” and not likely to change their behavior over eco-issues
Schwanhausser noted that green consumers are not only the most influenced by a bank’s efforts to be eco-friendly but also the most comfortable with their bank. Ninety percent of green consumers in the survey expressed satisfaction with their bank relationship, compared with 71% of moderates and 72% of skeptics, he said.
On the other hand, moderates offer banks the most potential because they are likely to have a wider range of assets than either of the other two groups, Schwanhausser said. The key to engaging this group, he added is with a “green-plus marketing strategy — something that incorporates the green ideal but has something in the pocketbook as well.”
For example, 79% of moderate customers still receive paper bank statements, which could save banks tens of millions of dollars every year in paper, printing and postage. According to the survey, 33% of these consumers could be enticed to switch to electronic statements if they understood the benefits of reducing clutter. A further 26% could be sold on reducing fraud risk and another 25% would respond to financial incentives.
The moderates, Schwanhausser said, “want to turn off their statements to help the environment, but they also want to reduce their clutter and improve security. Banks need to help convince moderates.”
Schwanhausser added that banks could also win over green-leaning consumers by offering additional services to make an environmentally friendly position a little easier, such as offering an option through their own Web sites to assist customers in turning off unwanted direct mail. Banks could help facilitate this by teaming with associations that help consumers reduce the direct mail they receive. These actions enable a bank to improve its green profile with consumers while also limiting the amount of marketing their customers receive from potential competitors, Schwanhausser said.
(Article featured in BAI Retail Delivery Insights July 2, 2008)
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