Branding: "What's the first step?"

Last Friday, I attended a day-long branding seminar put on by the ABA New England Bank Marketing Chapter. The sessions, led by Tom Asacker – author of “A Clear Eye for Branding”, were very different (in a good way) from other branding conversations I have been a part of at other banking conferences.

Tom pushed the audience to think differently about their institutions and brands. And, throughout his presentations he emphasized the importance of how brands make people feel – which he discussed, goes well beyond simply what people think about your company and brand. As you can imagine, this challenged the bankers in the room; when was the last time you thought about how your bank makes your customers feel?

Late in the day, Tom opened the floor for questions. And, not surprisingly, someone in the audience asked “What’s the first step?” – What’s the first step we, as community bankers, can take to bring clarity, strength and focus to our brands?

Tom handled the question very well.

He told the audience that the first step is having the passion and commitment – and a shared mindset among your team to really get the job done. Referring to a concept he discussed earlier in his presentation about the difference between formula and framework, Tom reminded us that there is no specific formula you can follow to bring clarity to your brand.

Rather, he presented a framework of elements that are necessary in building a successful brand; these elements include:

1. Be Close (to your customer and target market) – and being close is not as simple as proximity; it means allowing yourself to be close enough to your customers and your target to feel what they’re feeling

2. Be Different (in the consumers' eyes) – be unique; be compelling. Stop focusing on trying to be better, faster, etc. than your competition and just be different

3. Be Relevant –be relevant to your target market within the context of your market and your competition

4. Be Real (once again, from the consumers' perspective) – align your brand with authentic human qualities; let your customers see your human face

I think Tom is right; these points serve as a great framework for bankers to evaluate and strengthen their brands. While many banks will continue to conduct business as usual - with little, or no attention paid to strengthening their brands - those that can strengthen their brand, their position and their connection with their target market will be those that can remain relevant and grow in today's increasingly competitive marketplace.

A Bold New Look

There was a news story this morning announcing that Washington Mutual is launching a new version of their website, www.wamu.com. Their stated purpose for this upgrade is to make “the customer's online banking experience simpler, faster and more personalized.” We’ve been talking a lot lately about the importance of relevancy and growth. While I’m not certain their new site gets the job done; I was pleased to see that they are clearly paying attention to two important aspects of remaining relevant: 1) they know that their marketing must remain dynamic; and 2) they understand the customer is at the center of all they do. When was the last time you updated your website? (and yes, by the way, our website is under revision…stay tuned).

One thing their new website does that helps ensure relevancy: they ask "what do you think about the new wamu.com?" They invite feedback. If they have taken steps to show they listen to the feedback they receive, they are well on their way to staying relevant.

Who is setting your customers' expectations?

Trendwatching.com's February Trend Briefing highlights the expectation economy which it has defined as:

“An economy inhabited by experienced, well-informed customers…who have a long list of high expectations that they apply to each and every good, service and experience on offer.”

This includes financial services. And while the expectation economy does not include all consumers, evidence that financial institutions are taking notice of this group is evident in everything from the elimination of traditional teller lines at some banks and credit unions to the installation of lobby coffee bars in others.

Perhaps the most interesting point made in the article, and one which I think is often overlooked by financial services executives and marketers, is that expectations are often set outside your industry - in our case, bank customers' and credit union members' expectations are driven, in some part, by experiences outside of financial services. The article cites “Singapore Airlines’ sense of status, Starbucks’ understanding of indulgence and rituals, H&M’s obsession with making up-to-the-minute fashion affordable, or Apple’s prowess in design and usability” as examples of companies that are driving consumer expectations across the country.

Whether it’s industry leaders like these examples, or a local business in your community offering value above and beyond the expected, it's important to realize that your customers’ expectations of you and your institution are not necessarily driven by anything within your direct control. And, that you recognize opportunities where you can bring the customer experience your institution offers more in-line with these expectations.

We are all consumers; and we all have experiences with retailers, restaurants and other businesses that shape our expectations. Rather than relying on peer-to-peer comparisons to drive decisions (the article also goes as far as to say that “just copying competitors is a race to the bottom), financial services executives and marketers can benefit greatly from understanding their customers’ expectations, not only of financial institutions, but as consumers in general.

Depending on your market and your customers, you may find that their expectations are shaped by experiences like the ease of use and instant gratification of a program like Apple’s iTunes; or, they may be influenced by the personalized experience Starbucks offers in customizing their drink order and calling them by name. Whatever the case, financial institutions can play to these shifting expectations; first, by being more aware of them – and by finding relevant ways to incorporate them into the ways they conduct business.

No Fear!

Patience and Opportunity – Not Fear!

There has never been a better opportunity to help your customers within the financial services arena. While stories of fear and lack dominate the news and continue to scare your customers and perhaps making them apprehensive of getting a mortgage or buying a new car, I invite you to practice some patience and help them to navigate the challenges which may lie ahead.

The needs that create the demand for many financial products and services have not gone away; they have in some instances merely been postponed. Regardless of the bumps in the economy that may cause one to pause and sit back – your customers still need to educate their children and pay for college, they still need to buy or refinance homes, purchase new cars and they still need a place to keep their money from which to pay their bills. Their timing may be just a bit off from yours.

I am advocating for more of what I call “Short Term – Long Term” thinking. Now may be the best time for many banks and credit unions to be educating their customers on how to manage their finances during the months ahead. By doing so, by taking care of the short term worries of customers, long term seeds are being planted about your financial institution being seen as helpful, about being a partner in their long term success, so when the time to buy a house does indeed arrive, you are there for them. The great opportunity during this time is helping navigate customers to new ways of thinking.

For example, while Ford and GM are whining about the high cost of gasoline and the impact on the sales of their large gas guzzling SUVs’, Honda and Toyota have been busy developing fuel efficient cars and mini SUVs that appeal to customers. While many banks are complaining about the need for more checking accounts, ING has created its “Orange Account”, (www. ING.com) a totally online checking and/or savings account which pays a great rate of interest, without the hassle of visiting a branch to open the account.

Both of these examples illustrate the power of businesses to transform what they do and what they offer and to capitalize on the challenging business climate and turn it to their advantage. I invite you to view the current economic client and the impact on your business, not as “rough times” but as times that are simply “different”. What are you doing to turn this current economic cycle to the advantage of your customers and your business?

Buzz is Relative

We talk quite a bit about creating buzz when we’re talking to executives and marketers about their marketing efforts. During a meeting last week with a client in Texas, I was reminded that buzz is relative (small-town-Texas-buzz is very different from Chicago-buzz).

While the concept of buzz may be the same, the process of actually generating buzz depends quite a bit on your market. In the case of this small town client, everyone in town knows everyone else – and word spreads like wildfire. As a result, management of peoples' perceptions becomes very important.

In any case, if your looking to generate buzz, your message needs to be buzzworthy. I first heard the term “buzzworthy” years ago on MTV; the station’s Buzzworthy Blog actually has a great definition of the term:

“speculative or excited talk or attention relating to music and culture of sufficient worth or importance”

In the case of your institution, you won’t be generating excited talk or attention around music and culture; instead, depending on your market, you may generate this kind of talk and attention when you open a new branch; or for your involvement with a Habitat for Humanity project; or because of your financial education program for high school students.

What’s buzzworthy in your market?

Are your marketing efforts communicating something of sufficient worth or importance to your target market? Is it enough to generate speculative or excited talk or attention in your community?

Where does social, mobile and experiential marketing fit into your strategy?

It’s the beginning of a new year; and for many institutions, the New Year brings a new marketing strategy. For some, the strategy will simply be a continuation (or repeat) of last year’s strategy; and for others, new challenges will be met with new approaches, initiatives and expectations.

The cover story of the latest edition of Marketing News Magazine discusses 2008 as the year of social, mobile and experiential marketing. Certainly, awareness has been generated around these kinds of initiatives throughout the financial services industry over the last year – and we’ve seen a few institutions that have recognized the opportunities presented by these initiatives and have put them into play. A few examples that come to mind include: Wells Fargo, ING Direct and Umpqua Bank – but these institutions are far from the norm.

Take social media for example. Over the last year, we’ve talked to quite a few executives and marketers about the opportunities that social media presents to today’s financial institutions – specifically relative to marketing. And, one of the more interesting questions posed to us was: “When is this going to happen?”

Meaning, when is social media really going to start to have an impact on us – as a financial institution? The answer is now; it’s already happening. Whether you’ve given any thought to incorporating social media into your marketing strategy, it’s playing a major role in the way consumers interact with one another and with the companies with which they do business. An example of this can be seen in Wells Fargo’s series of blogs which provides information and an open forum for interaction between the bank’s customers, potential customers and employees.

While we’ve heard the word “mobile” talked about quite a bit over the past year, I think we’re more likely to see a push for mobile banking (Bank of America and Chase come to mind with their big mobile banking pushes) as opposed to mobile marketing in the financial services industry.

While I can certainly see the benefit in banks and credit unions incorporating social and mobile marketing efforts into their strategies, I would say that experiential marketing initiatives will probably have the greatest impact of the three in 2008. In an industry where products are so easily replicated and there is little that distinguishes one institution from the next, those institutions that can create a meaningful experience for their customers and target customers are more likely to stand apart from the competition and attract the customers that can appreciate their unique value added.

The Marketing News article credits Larry Deutsch, Managing Director at Jack Morton Worldwide – a New York based consulting firm specializing in experiential marketing with saying:

“The ideal experiential marketing effort is an ownable, sensory brand experience, a way to make customers feel like a product or service is theirs. Those motivated customers influence family, friends and coworkers to try the product.”

If 2008 is indeed the year of social, mobile and experiential marketing, where do these initiatives fit into your strategy? Traditional marketing initiatives (i.e. advertising, direct mail, etc.) will undoubtedly continue to be the focus of marketing strategies across the country, but marketers must adapt to (or at least pay attention to) shifting consumer behaviors, needs and preferences. Because while companies in other industries incorporate social, mobile and experiential marketing into their strategies in response to these changing consumer behaviors, financial institutions looking to remain relevant need to do the same.

"Chase What Matters"

Yesterday the New York Times ran a story about JPMorgan Chase’s plan to roll out a sleek new brand campaign on January 13th that uses the tagline “Chase What Matters”. The campaign, created by Mcgarrybowen in New York, will spend more than $70 million in the first quarter alone to communicate that Chase recognizes and focuses on the things that matter most to customers (e.g. security, recognition, control, protection, access, etc.).

One of the new TV spots follows a man shopping for a new television who uses Chase Mobile to check his account balance via a simple text message to determine how much he can truly afford to spend. Another TV spot shows a woman actively rock climbing when she receives an alert that her checking balance is low. She is easily able to call Chase to transfer funds into her account so she can avoid an overdraft. Chase is clearly trying to brand itself as the bank to keep up with the needs and desires of people with busy, dynamic lifestyles.

This morning NPR carried this story, suggesting that customer retention (rather than customer acquisition) is the likely motivator for a campaign of this size and scope. They noted that consumer confidence in financial institutions is low given the recent credit crisis and housing market problems, and that Chase’s expenditure on this campaign is an effort to shore up their market share. NPR briefly interviewed business journalist Glenn Rifkin, author of Radical Marketing, who essentially suggested that Chase would be better served to put the $70 million into things that really matter to customers, like ATMs, customer service, etc. But it really isn’t that simple – especially for financial institutions.

Chase hopefully understands that you have to do both…you have to make an investment in communicating bold, clear messages that resonate in the marketplace, and you have to back up your words with actions. What will make or break this kind of campaign is whether or not Chase has prepared itself to live and breathe the campaign internally.

Kicking off the New Year

On behalf of everyone at Market Insights, we hope you enjoyed the holidays and are ready to make 2008 a great year. We know that many of 2007’s challenges will follow financial institutions into 2008, but we’re also keeping a pulse on many other issues that are gaining traction and having a greater impact on today's institutions; we’re looking forward to incorporating these issues into our presentations this year and discussing them in upcoming blog entries.

As we look ahead to the coming months, we’re excited to have been invited to share our insights at several conferences with a variety of associations (and we like the fact that many of them are close to our Chicago office).

Please check out our updated presentation calendar and stay tuned as we work to put together a new series of presentations and educational sessions for the new year.