Financial services branding is a hot topic these days, from releases of (methodologically suspect) brand rankings, to a number of blog posts. Stealing Share published a study recently, and had this to say about bank brands:
The major banks remain undifferentiated and deliver little to no brand meaning. What banks need is a new brand promise, one that is a reflection of who the target audience is.”
The Open Source CU blog echoed this sentiment:
The vast majority of financial institutions will continue their pursuit of “better sameness” in lieu of real differentiation. They will continue to apply imaginary rules about what FIs should and shouldn’t look like.”
My take: Both Stealing Share and OSCU are right on regarding the lack of differentiation in bank brands.
I was disappointed, though that Stealing Share (a “strategic brand development’ firm) didn’t offer any ideas for what a new “brand promise” in banking that “reflects the target audience” would look like. And I while I agree with the author of the OSCU blog post that the majority of FIs will “continue their pursuit of better sameness,” I believe that is only in the short-term.
For the longer-term horizon (3+ years out), I envision a very different scenario for the future of bank branding efforts. A scenario that reflects not “who the target audience is”, but “who the target audiences are.”
In the future, banks will go down one of the following three branding paths:
1) Specialist. The brand message for firms going down this path will be “We do [fill-in-the-blank] — and only [fill-in-the-blank].” Fill-in-the-bank might be a specific product or service, or perhaps “serve” a specific segment of the market.
I can see the TV commercial for this brand: A prospect walks into a bank branch (a competitor), and meets with a rep to talk about a specific product. The prospect then says “great, I’d also to talk to someone about product #2.” The rep says “sure, one moment, I’ll go get someone” and gets up and walks out. The same rep returns a moment later wearing a different jacket, perhaps a wig, perhaps a fake nose and glasses, and says “hi, how can I help you?” Voice over: At XYZ Bank, we do one thing, and one thing only. And we do it better than anyone else.
Rationale: The financial supermarket concept has never worked, and never will. Consumers have never wanted a one-stop shop, and many never will. Self-directed consumers who know what they want, are willing to put in the effort to manage their finances — and multiple financial providers — will place a value on firms that specialize in narrow product areas, services, or their particular segment.
2) Trusted, objective advisor. The brand message for banks on this path is: “We do right’s for you — not us.” Think Miracle On 34th Street with Santa sending customers to other stores because it’s right for them. Sound crazy? Sure it does. But this is true differentiation — and will plenty of traffic in the door and on the site. It’s working for Progressive Insurance.
Rationale: There’s a segment of consumers — they tend to be younger, less affluent, less highly educated — that need advice and guidance on how to manage their financial lives and how to make smart decisions. Trusted advice is easy to get when you have $10 million in the bank (which is funny to say, because the people who have $10 million usually don’t keep it with a bank). Trusted, objective advice — regarding both sides of the balance sheet (assets and liabilities) — is an unment need among many consumers.
3) Operational excellence. The brand tagline for firms on this track is “We don’t screw up — ever. And if we do, we’ll fix it so fast you won’t even know it happened.” (I’m sure the copywriters will come up with more appropriate language)
In the ads for a firm on this path, an error will occur when somebody enters erroneous information on a computer screen. This will set off an “alarm” within the bank’s information system (because they’re able to flag the error as such in a nanosecond), and bots will go screaming through the ethernet to grab the error out of the dataflow, fix it immediately, and ensure that the right information goes through to the customer at the other end.
Rationale: Relatively affluent, highly educated consumers value this more than anything else. When my bank screws up a $50 charge, it can only make me wonder: “If you can’t keep track of $50, how can you expect me to invest $500k with you?”
———————————————
What about today’s predominant branding themes — convenience and superior service? They’re subordinated under the three tracks I’ve laid out. In other words, convenience and superior service are givens, or the cost of entry to compete in the first place.
I may be completely off-base with these branding approaches, so feel free to dispute them and suggest others.
Side note to the branding gurus out there: Don’t just critique and bash the banks for their current branding efforts — offer some constructive alternatives. If you’ve got any, that is. I’m not sure you do — if you did, there might not be so much sameness across today’s bank branding efforts.
Technorati Tags: Banking, Marketing, Branding, Open Source CU, Stealing Share
Ron Shevlin's Marketing Whims 
I don’t know if I would put it down to just 3 branding paths. Convenience and superior service — stick a fork in those, they are overdone.
Banking has two key elements which are also the highest costs, people (staff) and data processing (IT). Mix that with your customer/membership base and you do have a ‘oil and water’ mix. How one finds a ‘brand’ with these elements that are in a constant state of change is like walking a tightrope, you are always in a balancing act. It seems you need to understand and move these elements in concert with each other in you own unique markets before you can contemplate a brand. All of what you are and where you are will contribute to that branding solution.
What I see as the problem is the inability of most to see this or the fear to do anything different. What was that old expression you will never get fired for buying IBM? Keep it gray and irrelevant with something like ‘convenience and superior service’ and you won’t rock the boat.
What are the brand tag-lines for some FI’s? MLCU’s recent foray into this was ‘Keeping it fresh’. Will it change? Possibly. Does it work? At this point, yes.
Ron:
Bank branding is broken. I’m glad you have the assets to call it like it is. I think it’s so broken that new brands need to be created. If I was running Bank of America I would consider forming two new brands. I would go ultra high-end with one, and I’d go downmarket with the other one. If you don’t care about banking fees, etc, you can stay with BofA and we’ll take great care of you. But with the two different brands, it can not only sharpen it’s approach, it can build a new customer platform. Retain current high-end customers, for example, and create a new promise for new customers. Branding is too important for banks to get lazy.
Gene’s right. There are other brand themes.
* You could build your brand around making banking easier and simpler.
* How about choices? Many or few. You could have a brand that promises lots of choices – “the widest selection” strategy. Or a brand that is built around one choice – one checking account, one CD, one loan.
* There’s a whole segment of the population whose decisions are driven by style alone. You could simply choose to connect – stylistically – with your audience. A brand built entirely around a personality? With all other things being equal, why not?
* How about a WalMart strategy? Where you always guarantee the best value/savings/cost on a wide selection of financial services.
* You could build a brand around making banking fun/funny.
Each of these directions can be more than just an ad campaign or marketing focus. They can impact everything: product mix, pricing, branch design, messaging, staff behavior and training, and so on.
Ron, it sounds like what you’re suggesting is pick a direction then stick to your guns. That’s one way to build a brand – from the inside-out. It’s what many financial institutions do (those that do “branding” anyway).
The other way is to build it from the outside-in. Start by defining a narrow audience, then figure out what drives their decisions. This usually helps create a distinct brand, one that doesn’t end up at a preconceived destination.
“I was disappointed, though that Stealing Share (a “strategic brand development’ firm) didn’t offer any ideas for what a new “brand promise” in banking that “reflects the target audience” would look like.”
There is a reason that this was not included, well there are many reasons actually, with the main one being “it depends on the institution and the target audience.”
For example are we talking about a local community bank, a regional bank, or a national bank? What business is that bank/FI in? Are they only consumer oriented or do they also do commercial, do they engage in brokering etc? What percentage of their business is tied to each?
The message is not only a reflection of the target audience, it is also discovered through study of that target audience. Plus, it has to be true to the institution and reflective of their values as well. Brands and brand messaging for a market as complex as financial services can not and should not be boiled down into generic terms for the purposes of illustration as there is no context in which to place that brand and its meaning. In and of themselves a brand promise is “just words.”
I have to disagree with your contention of 3 “branding paths.” To my view, each of those “paths” are in fact definitions of what it means to be a financial institution.
Does anyone really want to use a bank that are not specialists in their field, trusted, and have operational excellence? Seems like you have to have all of these things to be a financial institution in the first place.
From a marketing perspective, the “branding” paths may work as marketing TACTICS (under the umbrella of a greater brand promise). However, these are not brands – a brand can never be built on a category definition but instead should be based on those values and beliefs the target market hold dear that guides EVERYTHING they do.
@Gene In the book Buying In (not finished reading it, but so far — it’s the best book I’ve read in years), the author defines branding as “attaching an idea to a product.”
I like that definition much better than the squishy “a brand is a promise.”
So given the Buying In definition, MLCU’s “keep it fresh” is a tough one to digest. What idea is being communicated or formed by that?
@John For BofA to form 2 brands, they would first have to become 2 companies, or create 2 completely separate and independent business units. Not only can’t you be all things to all people, you can’t be even 2 things to all people.
@JP Apologies if I sounded like I was saying there are only three paths or branding themes. I don’t know how many there are — I put a stake in the ground for the three I believe will (or maybe “should” in my opinion) be dominant. While you could build a bank brand around being fun, I don’t think many (if any) banks will, and for an explanation of why I believe that see https://marketingroi.wordpress.com/2008/07/08/the-bar-is-kind-of-low-no/
Regarding building a brand around choices… not to sound disrespectful, but where the hell have you been for the past 10 years? This is supermarket approach which has yet to prove itself to be a viable approach.
The Wal-mart approach — ie, value — I would agree is definitely a possibility.
Lastly, I don’t think I’m taking an “inside-out” approach at all. The “rationale” part of each point is trying to show that each of the approaches I’ve laid out “reflects a target audience”.
The issue I have with some of your suggestions is that you don’t back it up w/ a “target audience” driving the branding approach. Do you have market research (or a logical theory) to support a branding approach built around “banking is fun/funny” or a “stylistic personality”?
Re: A “choices” brand.
Ron, your view of “choices” is too narrow. As Corbin said, every aspect of the organization would have to be built around the “Choices” theme. You have to be creative and imaginative. You have to be willing to engineer everything around the brand.
* Products – Simply offering a lot of product choices isn’t enough. Adding more products doesn’t cut it either. You have to stress that your wide and varied product mix includes a lot of options. People can tailor accounts to their needs.
* Branch Access – You’d have to have drive-through lanes, a drive-up ATM, a walk-up ATM, maybe two entrances, etc. Every branch would need to provide these choices. This impacts site selection too.
* Rewards Program – How about giving me a choice about what kinds of rewards I want? Cash? Rate increases/decreases? Additional [free] services?
* Marketing – There’s choices about how to be contacted: by phone, e-mail, regular mail. How about giving me the choice to not be contacted at all?
* Promotions – Loans could be driven around a “choose your payment” option… “We’ll make it happen!” How about the “choose your APY” thing Netbanker wrote about yesterday? The promotional side of “choices” is endless, for instance, every giveaway could include a choice – trip or cash – maybe even something like “What’s behind Door #1, Door #2 or Door #3.”
* Operational Decisions – Give people a choice. Let them vote. Which TV commercial you should run (A or B)? Which charity should the organization should support?
* Advertising – A “choices” theme points towards individuality. Many creative veins to explore here. A consistent brand voice could be sustained for many years without running out of fresh material.
* Staff Incentives – Would you like cash or PTO? It’s your choice. (Note: There are many cultural ways to deploy “choices” internally with staff.)
I’ve not seen any financial institution anywhere celebrate “Choices” to this degree. Not even close. A brand at this level would be driven entirely around things like options, democracy, individuality and customization/tailoring.
You wanted an alternative brand theme? There’s one (almost complete) brand theme – free of charge. Anyone else want a brand theme? Go to ICONiQ.com and shoot me an email.
@Jeffrey “Anyone else want a brand theme? Go to stealingshare.com and shoot me an email.” was my first answer. 🙂
Re: The brand themes I suggested not have a target audience backed up by research.
As I said, there’s two ways to build a brand:
1) INSIDE-OUT – W\here the organization takes a stand and hopes to connect with a segment of the audience. This is the most common way financial brands are built. For many FIs, research is too expensive, takes too much energy and takes too long.
But research isn’t always required. 30 years ago, would research have told Howard Schultz to open espresso stores around the world? Do you really need research to tell you that building a financial brand around making banking easier/simpler would work?
2) OUTSIDE-IN – Using research to define your audience segment and identify the drivers behind their decisions. This is hard, but arguably the better way to go.
What we’re talking about here today is INSIDE-OUT approaches. Everyone’s got their opinion about what brand themes would work and what wouldn’t, but to your point: Where’s the research to back it up? And as Corbin said, who are we talking about here? A small teachers’ credit union with two branches? Or a national bank with 2,000 branches and a huge commercial lending arm?
Re: The brand themes I suggested do not have a target audience backed up by research.
As I said, there’s two ways to build a brand:
1) INSIDE-OUT – W\here the organization takes a stand and hopes to connect with a segment of the audience. This is the most common way financial brands are built. For many FIs, research is too expensive, takes too much energy and takes too long.
But research isn’t always required. 30 years ago, would research have told Howard Schultz to open espresso stores around the world? Do you really need research to tell you that building a financial brand around making banking easier/simpler would work?
2) OUTSIDE-IN – Using research to define your audience segment and identify the drivers behind their decisions. This is hard, but arguably the better way to go.
What we’re talking about here today is INSIDE-OUT approaches. Everyone’s got their opinion about what brand themes would work and what wouldn’t, but to your point: Where’s the research to back it up? And as Corbin said, who are we talking about here? A small teachers’ credit union with two branches? Or a national bank with 2,000 branches and a huge commercial lending arm?
Certainly outside-in is the best way to go…perhaps the ONLY way to go and do it right.
I think the Inside-out approach is what got FIs into this position now. Jeffry is absolutely correct though research is expensive. In addition, there are many “branding firms” who make brand to only be about identity. If you just want a new logo, color palette and tag line, the inside out approach will work just fine. However, what you have is not a BRAND it is an Identity.
The best brands bleed their brand. Disney, Harley Davidson, Apple. EVERYTHING a business does must be brand centered. There is a difference between the business of the business and the business of the brand. To be successful, banks must continue to do the business of their business, of that there is no doubt. However in order to survive, they need to put more resources to the business of their brands.
My take is that there is a deeper point at stake here. Banks all brand the same, because they are all the same, and its important [imho] to look deeper and understand why they are all the same.
some commonalities:
– incredibly highly levered
– obsessed with risk management [didn’t say they were good at it!]
– in constant fear of losing depositors
Lets assume I am right about these characteristics. Nothing there suggests any of them will move outside the mould easily, and anything new will look like a big and unacceptable risk.
First cure the mindset.
@Colin While I would agree with you regarding the “cure the mindset” comment, I would argue the point that banks brand are the same “because they are all the same”.
Maybe in Canada…. but I actually know that to not be true either.
I think a major contributor to the brand sameness is the process by which most large FIs go through to arrive at their brand positioning. These processes (as best as I can tell) are completely divorced from any understanding of, and immersion in the everyday customer experiences as they pertain to sales/marketing interactions, service interactions, online transaction/acct management transactions, etc.
And so what emerges is a bunch of aspirational branding crap, which is in total discord with what customers experience — or need.
The need part is missed because the market research that informs the branding process focuses — again — on aspirational stuff.
But behind the thin branding veneer, there are a ton of real differences between the banks.
@Ron .. I would argue the difference is largely in the branding veneer. Under the covers the approach in Banks by the people who make the real hard decisions,is i find quite similar in approach.
However I generally agree with all you say there.
@Ron…Unfortunately, I am going to have to disagree with you concerning…”But behind the thin branding veneer, there are a ton of real differences between the banks.” – at least the last part anyway. I absolutely agree that FIs have a ridiculously thin branding veneer, but “a ton of real differences?”
Yes, there are most certainly differences in the processes of FIs – different products, different operational set up, different locations, CU vs Traditional banks etc…” But, these are not REAL differences. We have reams of research on a national and local level that from the perspective of the customer (target or current) there are NO differences. The vast majority of folks see FIs as the same and as a means to an end…almost like they HAVE to have a bank so it might as well be FI “X.”
But the issue is really not whether there are differences, the issue is do the customers BELIEVE there are differences. Beliefs are very powerful and a belief does not have to be true to be believed. Perception is reality.
In the current state of FI branding, the problem then becomes if FI “x” starts talking about the “real” differences, will the market believe them…and even if they do, will they switch? Switching FI is a real pain and people rarely do it. Secondly, if FI “x” starts talking up their “difference” it is only a matter of time until the market copies that difference and it becomes yet another descriptor of the category. (reward points programs, keep the change programs, extended hours, and mobile banking come immediately to mind).
And for Credit Unions it is even worse. Yes, there are differences between a traditional credit union and a traditional bank. But only credit union members know that. And what makes it a double edged sword for a credit union is that if Credit Union “Y” starts to message the differences between a credit union and a bank, you have the same issue of believability but even more than that you are spending money to build a category (generic credit union) rather than building Credit Union “Y.”
Pls send me details of branding and new product for a bank