A brand is something you are that has the potential to differentiate you positively in the market so you can grow at a superior rate.
By Mark Gibson
Branding is one of the most misunderstood concepts in business. Leadership often thinks of branding as something you do. For instance: “We need to run ads to increase our brand.” A brand is something you are that has the potential to differentiate you positively in the market so you can grow at a superior rate and sometimes even charge a premium price. Common examples here are Apple and Nike. However, the same concept applies to financial services, where strong brands such as American Express and Chase enjoy dominant market share and favorable pricing as well.
The narrower definition of branding is commonly used in banking, and it contributes to the commoditization of the industry. When you have 4,000 competitors, it is imperative to stand out from them in some meaningful way. Otherwise, an institution falls back on price competition and the “personal brand” of its bankers to win business. This requires an urgent rethink about what branding is and how a community or regional bank should do it effectively to grow market share.
Consequently, when a bank undertakes a rebrand, it often incurs 100 percent of the cost but only receives a fraction of the potential financial benefit. Changing names, logos, colors and signs is extremely expensive and does little to grow business. What actually helps banks grow in a superior manner over the long term is crafting and communicating brand positions that are compelling to specific customer groups.
This article defines what brand positioning and rebranding are, how you should effectively approach these, and what they can achieve for the organization if done properly. It also highlights the make or break nature your employees play in both developing and delivering upon your brand strategy.
What is brand positioning?
A brand is something you are, not something you do. Every organization has a brand position, whether they have intentionally defined and communicated it or not. The reason for this is: Your brand position is how your target customer thinks about you. What adjectives do they use to describe your organization? How do they view your performance on important attributes like convenience, personal service, and technology compared to your competitors?
According to Marcus Collins, author of For The Culture, “Far too often we think of branding as an executional activity—logos, colors, monikers …That’s because our view of branding is far too narrow. Brands are signifiers that conjure up thoughts and feelings about an [organization], and they can unlock opportunities for leaders” who align with the belief systems of their target customer.
As an example, a mutual savings bank may decide to strategically focus on the small business segment to fuel future growth. But if small business owners in its market view it primarily as a consumer bank, the institution has a lot of work to do to change its brand position and perception to be successful with the small business segment. A name or logo change, or a new advertising campaign, will not be sufficient.
This example illustrates that refining your brand position is a strategic decision that is just as important as which lines of business, products or customers you choose to focus on. In fact, it should be a physical representation of all the above, clearly communicated to your employees, customers and prospects. In other words, your brand strategy should be part of your overall business strategy.
Senior management misperceptions often lead to the delegation of branding to marketing or even an outside advertising or branding agency. While these groups should certainly play a key role, the brand positioning strategy needs to be solidly based on the bank’s business strategy. What differentiates us, who are we attracting and what we want to be known for. Too often in financial services and other industries, branding is done in isolation of the business strategy and therefore does little to help move the organization toward achieving it.
We experience every day what results without a differentiated brand strategy. An institution is forced to spend more money promoting a product with a better rate or lower fee because there is little else that sets it apart from its competitors. Or even worse, a costly brand advertising campaign is executed with little or no incremental revenue generated.
How do marketers and senior management resolve this dilemma and create a brand or execute a rebrand that generates positive business results?
Developing the strategy behind a successful rebranding
The first step in any rebranding is for the bank to agree upon the business objectives underpinning the rebranding. Questions to ask include:
- What makes our organization special and how do we want that to evolve in the future?
- What customer segments will fuel our future growth and what is important to them?
- What other attributes or qualities do we want to be known for?
Once this foundation is built, you need to evaluate how your institution is currently performing on those attributes with your target customer segments. That involves some basic research, usually a statistically reliable survey of 100 or more prospects, to see how your institution performs compared to your competitors.
The findings of this research will show you what your current brand position is, and how you are currently performing on the brand attributes that are important to your desired customer segments.
You may find that you are already performing better than competitors on specific important attributes. You will also find that your competitors already own certain attributes. Finally, you will find that you are underperforming on certain key attributes that are important to achieving your brand strategy. At this point, an important decision must be made. Management needs to ask itself, given the gaps in current performance, is it realistic that we will be able to perform well in the areas that are important to our desired customer segments? What investment in product, technology or delivery is necessary to achieve this status? Which attributes do we need to excel in, and which can we simply meet the minimum performance threshold?
Source: Adapted from David Aaker, Building Strong Brands.
This honest evaluation will help management be realistic about both its brand positioning strategy, but also about the customer segments that are realistic to pursue. For instance, if your cash management capabilities are average at best, certain types of businesses are simply unrealistic for you to pursue. This conclusion has implications for your overall brand positioning strategy.
This analysis will also feed into the creation of value propositions for each key customer segment or product, but that is a step further than we are discussing in this article.
This diagram illustrates how an organization’s internal brand (purpose and value proposition) is integrated with its external brand (brand position and brand personality). Source: Ologie, Columbus, Ohio.
The outcome of this evaluation is agreement on the brand attributes we want to be associated with our overall brand position. Examples could include those associated with the product (premium vs. value), with the overall organization (innovative vs. trustworthy) or personal (approachable vs. stuffy). These attributes will vary from segment to segment (consumer vs. private banking vs. commercial banking). But there should be alignment across the segments to create a brand position for the overall organization.
Do not forget your internal brand and your employees
It is essential to remember that your brand position is internal as well as external. Like your external brand, every organization has an internal brand. If you have not defined it explicitly and managed it, chances are it is not what you want it to be. If you want to take a pulse on your current internal brand, all you have to do is ask your employees. What do we stand for? What makes us different from our competitors?
The critical inputs for your internal brand are your mission or purpose, your vision, and especially your values. The critical questions to answer in formulating your internal brand are:
- Who are we? Why do we exist?
- What value do we provide to our employees? What makes us unique?
- What values and attributes are associated with us as an organization and employer?
And remember, in a service business like banking, your product is the service your people and technology deliver to customers. Therefore, your brand is communicated each time a customer interacts with a staff member or online banking. As a result, each employee and customer-facing system needs to reflect your internal and external brand.
This suggests one of the most important lessons of branding a service business: The performance of your staff and technology is just as important, if not more important, than advertising in communicating your brand to customers.
That should make it obvious how essential it is to involve your employees in the development of your internal and external brand strategy, and especially how important it is to thoroughly train them on what your brand is and how to deliver upon it in their daily jobs. This includes how they treat each other, as well as how they treat customers. A vital component of that training is the elevator speech. How do employees describe the unique nature of your company in less than 30 seconds? This, as well as other components of your brand, should be trained to the extent that it is consistent no matter who in the organization one asks.
Successfully executing the new brand
Execution of the brand is the piece that is most familiar to senior management, because it involves the disciplines of marketing like design and advertising that are most associated with its wheelhouse. And while the creative disciplines take precedence at this point, it is essential that management and marketing hold the creative agencies accountable for designing creative concepts that deliver against the strategic brand guidelines established. This is typically done by translating the brand identity and positioning strategy into a written marketing brief to guide the agency’s efforts. The brief also gives management an objective way to assess whether the agency’s resulting creative concepts are meeting the business objectives of the branding or re-branding effort.
And what of brand names, logos, symbols, colors, taglines and jingles? These are the things that everyone things of as “branding”–the physical manifestations of the brand that employees and the public see. Yes, they are very important because they serve as the delivery vehicles of your brand. However, the tendency is for them to be viewed and judged subjectively. “Do I like them or not.” And of course, the more senior the executives, the more their votes count. There is a better way.
As creative concepts are reviewed, the marketing director and management must not be taken by a concept that is beautifully creative for its own sake but does not reflect the stated brand strategy. For instance, if one of your desired attributes is innovation, the concept must exemplify a modern forward-looking attitude. Similarly, if the bank’s primary customer segment is businesses, the concept must speak to business owners in a relevant way. Only if a creative concept brings to life the brand positioning strategy and the important brand attributes that have been agreed upon should the concept be selected. This principle applies to ALL advertising campaigns and marketing programs, not just brand campaigns.
Measuring the impact of your branding effort
Like any major initiative, branding and rebranding should deliver on pre-determined goals and objectives, including financial metrics. Common categories of metrics for brand programs include:
Strategic. Have we accomplished the strategic objectives set out for the branding project? Such as: attracting a younger composition of new customers, or increasing awareness and lowering cost of new customer acquisition in a new geography.
Consumer (or business) perception. Is our target prospect thinking positively about our organization and associating it with the desired brand attributes? (Measure pre- and post.)
Consumer (or business) behavior. Is our target prospect more receptive to sales calls, engaging with our organization? (Such as web visits.)
Customer experience. Are our existing customers rating us more highly? (Net promoter score, etc.).
Prospect activation. Have new sales or qualified leads to the sales team increased at the expected upon level?
Employee engagement. Do employees understand the new brand? Are they communicating it consistently to customers? How positively do they view the company? Are they more engaged in their work?
Do not forget customer experience metrics
If advertisements are the voice of the brand, think of the customer’s experience as the delivery of the brand. The two are intertwined and must be enhanced simultaneously during the rebranding effort if the business results are to be achieved.
See above about “experience” and net promoter score, but this cannot be emphasized enough. Because the customer’s experience IS the physical manifestation of the brand, the rebranding effort and the metrics need to include improving the experience. That means the brand needs to come to life when customers visit the website, sign on to on-line banking or bill pay, use the mobile app, ask a question in the branch or call Customer Service with a problem. The project team needs to ensure that all touch points—branch, website, mobile banking, call center—deliver on the new brand promise. Metrics should be identified for each of these channels to ensure the desired experience is being delivered.
Once you have identified what you are measuring, you need to establish how you are capturing the information, how you are going to report it, and what you are going to do with the results. Certain metrics, such as engagement and sales, should happen relatively quickly. While experience, awareness and perception changes can take longer.
What is the pay-off?
Differentiating your brand and value proposition can be a powerful tool for superior revenue growth over the long-term. The examples in other industries are numerous, including Microsoft, Salesforce, Proctor & Gamble and many others. The brand equity on these firms’ balance sheets often exceeds that of their tangible assets!
The same principles apply to any industry, including financial services. Banking is a customer-facing industry where brand recognition matters. Numerous examples such as American Express, Bangor Savings Bank, Rocket Mortgage, Ally Bank and Umpqua Bank demonstrate that strong branding and differentiation are possible in banking and can yield positive business results.
So, what are the specific benefits to having a strong differentiated brand position? There are several:
- If you can position your institution as the best choice for a specific segment, prospects will think of you first and you will grow market share faster than competitors.
- If new customers are selecting you because you are the best choice for them, they will be less price
- If prospects are aware of you and think favorably of you, you will have to spend a fraction of the advertising dollars to attract each new customer and will not have to pay hundreds of dollars in cash incentives that large banks do.
- If your brand positioning is unique, you will stand out from the crowd and achieve more than your fair share of new customers, deposits, and loans.
Pulling it all together
Doing branding or rebranding right is not easy. But doing it right doesn’t cost materially more and takes just a little extra time. The next time you are contemplating a brand change or update, be sure to start with establishing a brand strategy before you hire an advertising agency to ”create your new brand” by designing a new name, logo or advertising campaign which may very well not reflect who you want to be.
Mark Gibson is the marketing practice leader at Capital Performance Group, a strategic consulting firm that assists banks in improving the return on their marketing investment. He can also be reached on LinkedIn.