Storytelling in finance A means for customer acquisition and retention

Banks are under pressure. Fewer and fewer people frequent bank branches to seek advice or use local services. This increasingly eliminates the opportunity to convince customers of one’s own offer in direct contact, to establish a basis of trust and to bind them emotionally to their own bank in the long run. This trend is not only due to innovative technologies, new competitors and changing customer requirements, but also to a general loss of confidence.

In addition, the target group is confronted with a steadily growing number of homogeneous products from various financial institutions, which are advertised through numerous channels. The customer loses track and ultimately the price decides the fight. The cheaper one wins. In order to escape this situation, another level of differentiation from the competitors has to be found. Banks must be able to approach customers emotionally without personal contact and make abstract products and services understandable, tangible and, ultimately, desirable. One means of achieving just this is called storytelling.

What is storytelling and where can it be used?

Storytelling means telling a story about a product or company (such as corporate culture or history). Storytelling must clearly be distinguished from fairy telling. That is, a bad product should not be embellished by a good story, but rather should good products or their providers – embedded in an emotional context – stay in the customer’s memory.

Already in the early stages of human evolution, the best way to share information was by socializing around the campfire and through vibrant and exciting stories. While in the past, for example, the stories centered around dangers such as bears and saber-toothed tigers, the typical banking customer is now struggling with other problems. He worries about his assets, has to deal with numerous terms from the financial world and faces a mass of product offerings. By addressing the emotional level, storytelling can make all the difference to the competition.

Used as a form of corporate communication, storytelling in advertising formats, such as information brochures and customer magazines, videos on YouTube or social media posts such as Facebook and Twitter can be used to communicate informative aspects in an amusing or exciting way. The aim is to inspire customers, to make them think, or at least to arouse an interest to learn more.

What are the advantages of storytelling?

If the means of storytelling are applied correctly, several positive aspects can be observed:

  1. Easier memorizing of information
    Giving information in an exciting or entertaining way will arouse more interest than mere enumeration of (product) facts. The content is easier to remember and will be retained for a longer time, since the product or business are linked to a meaning. This effect is comparable to a mnemonic when memorizing. Images are particularly effective in storytelling because they are easier to process than mere information.
  2. Long-term customer retention
    Due to the emotional impact of a good story, empathy is constructed as its protagonist. In the best case, customers ultimately identify directly with the product or the company behind, which manifests itself in a feeling of long-term connectedness.
  3. Increase of credibility
    In storytelling, information is embedded in an overall concept. It makes the information believable and reliable, which in the best case translates to the company behind the story.
  4. Increase the reach
    Stories have a binding effect when they are being spoken about or discussed. Customers themselves often take over the distribution of a story they remember or have been moved by, for example in social media. This in turn can save on advertising costs. An increase in reach can also be achieved by actively involving the target audience in the design or development of a story.

How can a suitable story be found?

The more extraordinary and emotionally touching a story is, the better. However, actually finding one can prove to be more difficult than anticipated. The following questions can provide support:

  • What stories about the bank exist?
  • Which stories could interest the customers?
  • Which stories could make customers pass them on?
  • How did a product come about?
  • In which situations can the product help?
  • Whom can the product help?
  • What are the distinguishing features to other products?
  • What needs do customers have and what do they want to achieve?

What must be considered during storytelling?

The above questions should initially be seen as starting points. In order to build a really good story, which also lingers in the memory of the customers, further elements have to be included in the development.

  1. Defined target audience
    Before designing a story, it is important to precisely define the target audience. Aspects such as age or gender play an important role in deciding how to reach the target audience best. In addition to defining the target audience, it must be decided which channels (print media, YouTube …) will be used for communication. If multiple channels are used to spread the story, it must be ensured that this is done consistently. This means that there must be a meaningful connection across all channels.
  2. Clear message
    At the heart of good storytelling is the message that is to be communicated. It must be clear what should be passed on to the addressee of the story. What is the reason for the story? The clear message is the core around which the plot and the characters are aligned.In addition, the message for the recipient must also be understandable. Bringing irrelevant or too much information into the story should be avoided. The focus must be on a storyline and a clear message.
  3. Emotional reference and authenticity
    Already at the beginning of the story, it is important that the attention of the addressee is so high that curiosity and suspense arise. The addressee has to be emotionally “picked up”. As the story progresses, it is important that no errors in meaning are incorporated into the plot and that the story feels true and authentic to the customer. It must represent the bank, the products and the values. A contrived story will sound unbelievable. Especially stories taken from real life are perceived as being authentic.The own company or the product should not prevail in the plot, but rather be linked to the story at the end. The aim must be that the emotions of the recipient, which he experiences during the action, are transmitted positively to the product or the bank. If, in the end, he only remembers the characters or other aspects of the storyline, but not the bridge to the product or the bank, storytelling will fail.
  4. The protagonist
    A good story revolves around a protagonist who is at the center of the action and pursues a goal. This protagonist, who does not necessarily have to be human, should appeal to the target audience. Only if the audience cheers and cries for the protagonist does the attention remain high and identification or solidarity ensues. The own company should not be presented as the hero of the story, as this is generally perceived by the addressees as a negative form of image cultivation. However, the hero can clearly be identified as a model customer of the company whose story is told.
  5. Conflicts or obstacles
    In order for the target audience to be captivated by the story, the protagonist should overcome obstacles or survive a conflict on the way to fulfilling his desire. Obstacles can come in many forms, such as a human rogue, time constraints, a public authority, interest rates, lack of money, strife or personal limitations. If the protagonist does not have to overcome obstacles, a story becomes boring and implausible.
  6. Climax and resolution of the story
    The culmination of the story should give the addressee a sense of enrichment. This is achieved by solving puzzles that have been built up in the course of the story, resulting in a coherent image or the final triumph of the protagonist after overcoming obstacles and conflicts. This point forms the moral of the story and gives the addressee a conclusion. A before-after or eureka effect occurs. The addressee must have learned or gained something from the story. Under no circumstances should he feel that he has wasted his time. Otherwise, it will be hard to capture his full attention again in future storytelling projects.

Examples of successful storytelling

What perfect storytelling can look like is demonstrated, among others, by the most-watched ad on YouTube in 2017. In this spot, Samsung conveys the clear message that the company wants to be there for their customers no matter how complicated the situation may be.

The spot begins with a call from a young girl who contacts a service representative about a broken television. Although the girl lives in a poorly accessible area in the middle of the mountains, the leading character of the spot sets out to fix the TV. Numerous obstacles, such as a fallen tree or a flock of sheep on the road, complicate his journey. But despite the difficulties, the service representative finally reaches the caller’s house. As the story dissolves, the emotional climax of why the long journey full of obstacles was more than worthwhile, follows shortly thereafter.

Other storytelling examples that skillfully combine the elements mentioned in the previous section and that demonstrate that even without using so many words, emotional stories can be told with children and leading characters from the animal world, are available at the following Web addresses below:

Conclusion

Banks have advice and information obligations when it comes to product completion. Hard facts around returns, lending rates or investment horizons will continue to be in the foreground. The path to bring a customer to the product is rocky. Storytelling can be the means of choice to emotionally address customers with advertising formats and thereby gain a competitive advantage. Those who succeed in triggering positive emotions while at the same time anchoring informative aspects that offer real added value, and manage to easily and comprehensibly linger in the memory of the customer build up bonds. Maya Angelou, the American civil rights activist and author hits the nail on the head:

„I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.“

Image Fabian Plumbaum

Fabian Plumbaum

Consultant Office Frankfurt

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