I recently decided to move my company profit-sharing plan from Vanguard, primarily because it did everything it could to make me do it.
It started with a letter in March telling me that it had decided, quite for its own benefit, to stop offering the type of retirement savings plan that I'd had with Vanguard for a few years. There were other options for me, all of which would require additional documents as per a new government regulation called EGTRRA (the meaning of which is meaningless).
This communication was branding strike #1: don't use a rare exchange with a happy customer to give them bad news. I'd rarely given my Vanguard account more than 30 seconds of conscious thought all year long, which I'd say is an incredible statement of brand loyalty (and customer reliability, and perhaps profitability?). Then I got a letter written in stilted corporate-ese, telling me obliquely that things were changing for Vanguard's benefit, not mine.
Fine. Presented with no choice, I called a "dedicated representative" to help me decide what to do. My stated desire was to change as little as possible, though after reviewing the "robust menu of alternate plan options" that Vanguard promised in my letter, it turned out that the option I wanted wasn't available to me. The representative spent lots of time telling me about other forms and issues I had to know about; he spoke very earnestly, but I couldn't stop thinking to myself why am I doing this?
Branding strike #2: don't talk to a customer without addressing her or his clear, stated purpose. I kept asking the rep "Can't I just put my money into something as close as possible to what I used to have?" He never answered my question. I'm not a total ingrate when it comes to financial matters, and I honestly couldn't understand what he was talking about. Since I didn't really like why we were having the conversation in the first place -- to fix something they'd decided to break -- the what wasn't working for me, either.
So I decided to ask to close my account, and I told the guy I planned to open another retirement account somewhere else. Not so fast, it turns out...more forms, issues, tax challenges, and plan types that I had to consider. He offered to partially fill out the forms I'd need to use, but had to ask me lots of rather detailed questions. First, the conversation was unpleasant; now, it was uncomfortable, too.
Branding strike #3: when the relationship is souring in real-time before your very eyes, do something about it. The representative was wholly unequipped to handle the conversation. So Vanguard could take all the supposed "value" it sees in its branding and reputation, and reduce the ledger column to zero. The brand was decided on the call, and it was a strike out.
I still can't explain to you what happened, or why I can't have my pension plan at Vanguard. I have a sneaking suspicion that it didn't want my business -- maybe the money amount is too small, or something -- and did its best to push me out. It struck out on purpose...
and it worked.
The Bulb Asks:
- Every exchange needs to have meaning, relevance, and utility for your customer, so could Vanguard have started the conversation differently?
- By identifying a customer-centric purpose for the exchange, would it have been easier to "hear" my questions and thus better address them?
- Are some of the best relationships those that are all but on auto-pilot?
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