Like most retail/service businesses, your bank has multiple target audiences, each of them with at least somewhat different needs and expectations.
Welcome to the fifth and final installment in our blog series on branding in banking. So far, I’ve talked about the five reasons strong brands win. They:
- Gain a sharper competitive edge
- Build trust
- Communicate effectively
- Can adjust more easily to financial pressures
- Become a more desirable partner for mergers or acquisitions
If you’ve been following this series, you now know the benefits of a strong brand as well as the risks of ignoring branding. It’s time to take action. How can you cultivate a strong brand strategy so that your bank becomes a winner? Well, let’s see.
Know Thyself First
You cannot project a clear brand if you don’t know who and what your bank is as a business. How do you want to be perceived? What is your unique value proposition (USP) – that special something that makes you different? What are your core values? Community focus, exceptional service, other concepts? The number of core values doesn’t matter, but be clear about yours so you can clearly communicate them to others.
Be clear about your persona, too. Banks used to be the epitome of dull and stodgy, but if you remain in that space no one will want to do business with you. Fortunately, you can be traditional without being boring. And it’s perfectly OK these days for banks to have personalities that are fun or cutting-edge-innovative or down-to-earth homey. Your brand’s personality reflects your corporate culture, and it determines the voice and tone you’ll want to use in your communications, especially marketing.
Mergers and acquisitions create their own set of branding issues for banks. You can’t operate under two names, so which one do you keep? Expanding your “empire” means you have broader – perhaps now international – capabilities and resources to offer customers. But it could also suggest to prospects that you are likely out of touch with their locale and locally relevant needs. It’s a conundrum, one you’ll have to resolve in order to build a strong brand.
One of the most challenging barriers to differentiation among banks and other financial companies is that the range of products and services is so similar from one to another. And since no one wants your toaster any more, you’ll have to pinpoint other aspects of your business that make your bank unique and desirable compared to the competition.
Like most retail/service businesses, your bank has multiple target audiences, each of them with at least somewhat different needs and expectations. Therefore, tailoring products and services for each key audience is a must. Which brings me to my next point.
Know Thy Customers
The Financial Brand notes that, “Many institutions hope they can market their way to greater profits, but the answer is not just more or better advertising – it’s understanding what really drives consumers.” They say banks that develop great relationships with customers have a high Customer Quotient, as measured by five factors:
- Openness (transparency builds trust)
- Customer experience
- Emotional rewards (experience that results in a sense of fulfillment)
So, be honest here, what is your brand’s current CQ? Strong brands closely align their products, services, delivery systems, communications and marketing content with their customers’ most ardent desires. For example, in my last article, I noted that closing branches may reduce costs but it can also harm your brand by reducing customer convenience. Business decision-making is always a balancing act, but strong brands always put customers first.
How can you learn more about your customers? Data analytics, of course. There is no shortage of information available about individual customers and ways in which they use your bank. Any successful marketer will tell you that the greater your insight into your audience, the more effectively you can tailor your products, services and marketing to impress and engage them.
Along with knowing yourself and your customers, you need to consider your competition. How have they positioned themselves in the marketplace? And how are they actually perceived by the customers you both want to attract? It’s not about offering a fancier toaster. Strong brands rise above their competitors by providing an all-around better experience.
Go Digital Or Die
McKinsey & Company, an international financial services company, warns, “Institutions that resist digital innovation will be punished by customers, financial markets, and – sometimes – regulators.” They suggest that “digital laggards” could lose as much as 35% of their profits, whereas strong brands stand to boost profits by 40% or more. McKinsey predicts that by 2018 digital sales of financial services products will account for more than half of new revenue for banks in the UK, Western Europe and Scandinavia, with American banks seeing significant but slightly lower numbers.
Meanwhile, in the last year, banks have lost value – 11% for global banks and 12% for regional banks. “We’re at a tipping point,” says Sana Carlton, Banking and Finance Sector Managing Director at the UK’s Millward Brown. “It’s the disruptors who are recognizing what consumers need and successfully filling the gaps. They’re using technology not just to innovate and create new functionality, but to drive a great brand experience.” She’s right.
Your bank cannot compete without promising and delivering a great brand experience of your own. There’s a reason FinTech startups have been so well-received. You can go head to head with these upstarts by developing your own array of digital products and services, or you can do a deal to merge with or acquire a financial technology company or two. Either way, Start Group’s Patrick Baglee warns that “it is more critical than ever that banks understand the crucial difference between ‘doing banking’ and ‘going banking’ and are able to deliver a customer experience to match.”
He goes on to warn that “banks must begin acting more like places that people want to visit, not just need to visit whether that visit takes place by app, by browser or by branch. Banking that moves at the speed of life is what customers expect and banks need to provide, not just via technology but through the people that deliver the services and who live a brand’s purpose through action every day.” Strong brands provide a smooth, compelling, omni-channel experience.
In my third article, I noted that Google, Amazon and other tech giants have taken aim at financial services to broaden their corporate portfolios. Competition from outside the industry is yet another reason your bank needs a strong brand identity now.
Develop A Strong, Integrated Omni-Channel Presence
If your banking services are not available and consistent across multiple channels, customers will run into barriers. Lack of convenience and efficiency are deal-killers, especially for younger generations. Online, mobile, and physical branches all matter because customers want face-to-face interaction as well as digital access. But savvy banks are moving away from the traditional teller-behind-glass model to using brick-and-mortar locations to build more personalized, advisory-style relationships.
Banks that embrace technology not only earn customer love, they benefit internally, too. Mobile apps allow people to easily access account information, perform transactions, and receive notifications instantly, whenever they want, wherever they are. That saves valuable staff time handling mundane tasks and eliminates frustration that comes from “banker’s hours” or the dreaded interminable phone hold.
And despite the challenges of intense regulatory compliance requirements, smart banks are using social media to answer question and personalize their business.
With a Strong Brand, the Sky’s the Limit
Building a great brand is a lot of work. Ongoing work. But it’s an investment in your bank’s future that will pay off handsomely, with:
- More reasons for new prospects to choose you over the competition
- Easier decision-making for customers to choose you again and again, thanks to experiencing your brand promise first-hand
- Lower customer acquisition costs, thanks to increased loyalty
Strong branding enables you to speak to prospects and existing customers in new, more appealing ways. Your messaging can focus on your unique selling proposition – the thing(s) that truly do differentiate your bank. Today, understanding your competitive edge and building your brand are the only ways to increase your market share. Especially when most banks are stuck behind the times, still trying to sell their “stuff” instead of their brand.
Marketing your company brand is essential. But remember, the reality of your brand – the actual customer experiences you deliver – transcends any marketing claims you might make.