There is an entire science branch dedicated to discovering how people make decisions and what circumstances, emotions, sounds and sights influence them. For instance, men tip waitresses more if they wear red. The overwhelming majority of logos of successful companies is rectangular, square or spherical. People with short names tend to be make more promotions. The meteoric rise of the Internet and social media have made clear that people we trust play a vital role as well. Hence websites like Yelp and TripAdvisor.
At the same time and because it is laid bare so much more often that people can be easily led to make – bad – decisions based on factors that seem frivolous, the current generation of consumers has a more critical eye for corporate tactics that try to influence their spending, certainly in the finance sector. Even the trust in the professional reviewer and expert class has faded, with many of these professed experts suspected to be on someone’s payroll, and also because the Internet has allowed everybody to be a critic and do their own research. But one class of influencers has held on bravely, and that’s our own network.
With a little help from my friends
What we may now surround with buzzwords like peer-to-peer decision making or virality in the sudden rise of a product or service has basically been around forever. Close friends or family members are beyond any suspicion of being bought or making a personal profit off of your decisions. Especially on the Internet, we can choose who to follow and who to read. The world has become much bigger than the classic village where our great-grandfather’s grandfather was the source of all wisdom.
Millennials and the still more nebulous generation to come after them have experienced the 2008 Credit Crunch realize that putting all eggs in one basket financially isn’t the best strategy. Their assets are not as passive as those of previous generations, where banks essentially made money by inertia. To capture this more nomadic money, some retail companies are already relying on “advice from your friends” as a marketing strategy by engaging with celebrity bloggers, which are basically the consumer’s friends writ large (or celebrity endorsements writ small, if you will).
Skepticism is good. It shows that people care. Indifference would be a lot harder to fight.
Judo and other defensive martial arts claim that practitioners use their opponents’ kinetic energy against them. In the same way, the finance sector can open up and have their experts connect with an audience that is curious about finance but skeptical of the industry. Their skepticism is a gift in disguise: by offering key players in social networks advice, information and data that shows how consumers can reach smarter decisions, they seed trust. Skepticism is good. It shows that people care. Indifference would be a lot harder to fight.
I’m not saying that banks simply need to open the floodgates to the blogging and Twitter communities. Things can start small. Most 20 year olds, for instance, aren’t particularly interested in complicated finance plans to buy a house 20 years down the line. To find out what’s keeping these people awake, the research is already there, and can be complemented by behavioral data from the bank: if you can tell an influential social media consumer that most people in their peer group save one way but would be smarter to save in another way, that’s something that holds a direct advantage for them. Especially when you can prove it with data.
We’re all in this together now
The good news for all key players in the finance world is that most tools to capture influencers’ attention already exist. Social media have matured considerably and strategy handbooks about the decision-making behavior in networks (as opposed to rigid, more hierarchical environments) have already gone through numerous revisions. However, adapting to the more nomadic and peer-oriented mindset of the current consumer generations also means adapting your own mindset. A mere cosmetic change will be rightly perceived as insincere and risk tanking your operation. But changing will become a necessity soon. You and your consumers are all in this together, and today, to thrive means to help.