KQ Article

In the current landscape of M&As and government-mandated takeovers of financial institutions nationwide, a new category of customer seems to be emerging: the one who has not chosen you.

This is a remarkably common phenomenon today. Most consumers simply accept their new adopted bank or credit union, until a negative experience leads them to evaluate whether they want to stay in the relationship or opt out.

My financial institution has not been acquired, and it engaged in sound decisionmaking and banking practices while some others have not. I have not been forced into a new relationship with another bank. But there have been other situations in which I have been forced to rethink a business relationship as a result of an acquisition. I have experienced this as both an employee and a consumer.

Missed connection
Prior to my career at Deluxe, I worked as a consultant helping companies establish efficient systems for hiring, managing and promoting their people into positions in which they were fully engaged. My focus caused me to work with companies that set themselves apart by their interest and belief in their people.

One of those companies was McDonnell Douglas. This aerospace manufacturer was committed to the idea that if its people were fully engaged, it would increase quality and productivity and minimize errors. I spent fourteen months working with employees in multiple locations across the company, and you know what? It was working. With every passing week, we saw operational improvements occurring at every site, right before our eyes.

And then came the acquisition. McDonnell Douglas was absorbed by the Boeing Corporation, and the internal culture clearly and immediately changed. The work felt different. It was less intimate and employees seemed less passionate. It wasn’t that Boeing was a bad company. It was simply a matter of uncertainty taking over and changing the work environment. I eventually removed myself from the relationship altogether and began working with another client. I opted out.

Shopping elsewhere
Another unfavorable acquisition experience occurred for me as a consumer. While I was in graduate school in Minnesota, Chicago-based retailer Marshall Field’s acquired Dayton’s, a Minnesota retail icon. When Dayton’s was acquired, we were traumatized over the loss of such a local favorite. However, Marshall Field’s was close enough in its approach to retail that we could practically ignore the acquisition (while still referring to the store as “Dayton’s”). Most people opted to stay in the relationship.

Then Macy’s acquired Marshall Field’s, and that was the turning point. Macy’s was clearly inferior in its approach to the customer, in the brands it carried, and in the staff it employed. This is when Minnesotans finally felt the loss of Dayton’s. It is also when my own behavior changed. I opted out. I stopped shopping at department stores altogether, taking my business to smaller retail venues and boutiques.

What lesson might these stories impart to today’s banks and credit unions? Perhaps it is that the widespread acquisition of “involuntary” employees and customers creates a big challenge for acquiring financial institutions — and a big opportunity for the financial institutions that surround them.

If you’ve been part of a recent acquisition, are you taking careful measures to avoid widespread “opting out” among your staff and newly acquired customers? If you haven’t been part of one, are you focusing on ways to attract consumers who may soon opt out of the acquired bank around the corner?

Financial institutions can be bought, and so can lists and marketing campaigns. But loyalty must always be earned — especially if it involves people who did not choose you in the first place.