How Banks Are Using “Compassion Pricing” To Help Brand And Performance

Compassion Pricing Strategy

Banks that fancy themselves as “customer-centric” should consider the latest trend of offering discounts or specials in order to lend a helping hand in difficult times or to support shared values. Banks claim they care about customer’s everyday challenges, but what exactly do they do to care? Countless surveys, reports and statistics point in the same direction that when it comes to truly caring about the customer, few banks get it. It may be time for banks to get more “human.”

 

Every bank wants to help when times are good, but to really earn loyalty and respect, banks can do simple things to prove their value in both good and bad times. Pricing is a simple example and one that is becoming more common in this age of better systems, deeper information and more predictive data. Large banks have already experimented with utilizing existing information in account balances, social media data and customer input to develop what is called “Compassion Pricing.” Compassion Pricing is flexible pricing that falls into two categories: 1) Pain Relief Pricing and 2) Purposeful Pricing.

 

For Pain Relief Pricing, one clear example comes from Uber that offered students in Boston free rides during a 24-hour bus strike at the end of last year. The move helped the area students in time of need, built goodwill, received great press and was able to pick up a large array of new customers. Banks can do something similar, offering waived fees for those out of work or hit by a disaster; offer discounted services for startup companies; offer free government fund transfers for those late on their taxes; special CD rates for customers that received parking tickets in a given month; or a preferential package on Health Savings Accounts tied to higher health care costs. The point is that by picking a pain point and solving it with Compassion Pain Relief Pricing, your bank can garner goodwill, press and new customers.

 

Then there is Purposeful Pricing. Purposeful Pricing is pricing a service to support a shared value or belief. Some banks have been doing this for years as they have “Green Accounts” to support the environment, special credit cards to protect the Salmon or special loan programs to rebuild a community. What has changed over the last year is the extent banks will go now to tie banking into non-bank areas. For example, banks donate funds to targeted charities for every customer that bikes to work on a “spare the air day” in Los Angeles. Another bank on the East Coast offered discounts at local merchants to support gay marriage, while another offered free internet for customers that Tweeted their support of helping the homeless. We also reported on that bank last month that ties customer’s fitness tracker into their savings rate.This trend goes beyond customers and also impacts a bank’s staff. One bank highlighted in a brochure the favorite charity of each of its employees, a move that caused many to develop a love for a cause that they did not have before. Umpqua Bank pays for its employees to give their time to charity and CenterState Bank plays into this trend by our company-wide wellness program that gives each employee the tools and education they need to improve their health.

 

Compassion Pricing is a trend that more and more banks can tap into for the benefit of their customers, their employees and themselves. The ability to offer more customized pricing, more personalized service and greater community engagement will fuel the trends of greater mindfulness and more humanity. The confluence of factors creates the ideal time for banks to tap into this trend. Get creative and see if you can harness this energy to be more meaningful to your stakeholders. The beauty of this trend is, it is almost impossible to fail.