Ethnography in Action at Wells Fargo

Ethnography is described in a recent MIT Sloan Management Review article as “artful in situ investigation into what customers do and feel, and how they talk about what they do and feel.” It’s a disciplined way to try to understand how consumers live, work and play — and how their lives make them more or less receptive to a company’s products and services.

In the article “Stories That Deliver Business Insights,” in the Winter 2014 issue of MIT Sloan Management Review, Julien Cayla, Robin Beers and Eric Arnould give an example of how ethnographic insight helped Wells Fargo Bank develop a behavior-based segmentation that divided retirement-planning approaches of its customers into three categories.

“Only a few years ago, the corporate view of retirement planning at San Francisco-based Wells Fargo Bank tended to focus on dollars and cents — how much an individual needed to invest, by when and for how many years,” write the authors. This segmentation did not account for context such as whether a person was inclined to think about long-term financial goals.

“As part of an ethnographic project commissioned by the bank, researchers had customers walk through a life timeline and recount activities they engaged in that related to retirement planning in each decade of their lives — their 20s, 30s, 40s, 50s and beyond,” write the authors. The stories showed that baby boomers faced “a complex phenomenon of continually negotiated personal travails and marketplace dynamics.”

As a result of what they heard, the Wells Fargo team reworked how they think of customers. The bank developed a behavior-based segmentation that divided retirement approaches into three groups — Reactor, Pooler and Maximizer. These groups represented how people felt about and addressed retirement planning: Reactors are stuck in the now; Poolers tackle financial goals one at a time and tend to be risk averse; and Maximizers, the smallest group, think strategically and are willing to make their money work for them. The bank discovered that the category people are in emerges when they are in their 20s or earlier, and is influenced by how many resources they have available and by their general financial savvy.

“This deceptively simple model transformed the way Wells Fargo executives thought about customers’ retirement planning,” write the authors. “The management team grasped that the language of Maximizers (which is closest to the language of bankers) would not resonate with Poolers, who were the largest and probably best-suited target for the company.”

As a result, the bank adjusted its marketing strategy and “designed its retirement planning site to include the various life stages used in the ethnographic research to convey the message ‘we meet you where you are’ and provide relevant, unintimidating guidance — as opposed to producing numbers-dense material filled with endless financial projections.”

In both tone and content, “the overall research result was a more nuanced view of how the interplay between the personal, social and cultural affects people’s vision of retirement planning.”

For more about how companies are using ethnography to better understand the true needs of customers, read the full article.