The three biggest misperceptions of branding

By Mark Gibson

There is broad agreement across the banking industry that brand is important, but branding means different things to different people. Many bank executives equate their institution’s brand with its name or logo. Other executives believe that brand advertising is distinct and separate from product advertising. Finally, many bankers believe that brand advertising, while necessary, does not have tangible financial payback. A deeper understanding of branding dispels all three of these beliefs.

More than a logo

While it is true that a name and a logo represent a brand, it can and should be much more than that. A company’s brand should evoke thoughts, associations and even emotions that differ from those of its competitors. The car industry is a fitting example of this. Take Chevrolet and BMW. They are both powerful, well-developed brands, but they stand for very different things. And those differences manifest themselves not just in advertising, but also in the design and performance of the product, the product’s price, the look of the dealership and the sales and service experience.

This expanded definition of branding applies equally to financial services. Northern Trust evokes a very different image than MidFirst Bank or Old National Bank, and these differences are nurtured and reinforced over time. And like BMW or Mercedes, Northern Trust has established a brand that some people are willing to pay a premium for.

This kind of differentiation does not just happen. It is intentional. What makes our organization and its heritage different and special? How can we build upon that to be noticeably different and better in the eyes of our target customer? What is our brand strategy? What specific attributes do we want to be known for? It’s only after these decisions are made that logo and brand standards come into play. According to, “A bank should come to an agreement internally on which reputational pieces matter the most to them, are relevant to customers, and, importantly, can be fulfilled in their delivery,” says Corey Wrinn, managing director of Rivel  “Agree on ‘this is why you should choose us.”

An added benefit of this holistic approach to branding is its cultural impact on employees. Understanding and being able to articulate why your institution is different and better actually builds employee pride and commitment. And this attitude is infectious for other employees, customers, and prospects.

Brand advertising = product advertising = brand advertising

Many institutions have two buckets of advertising:  brand and product. In fact, some marketing departments even have separate teams responsible for these two categories. The supposition is that one set of ads tells the story about who we are and what we represent. The other ads feature specific products targeted at specific consumer or business audiences. While this is true, it misses nuances that are critical to optimizing marketing budgets and financial performance.

The first nuance is that brand advertising directly contributes to product sales. In markets with low brand awareness, direct mail response rates tend to be weak because prospective customers lack familiarity and trust. Over time, sustained brand campaigns that increase awareness can materially improve response rates to direct marketing efforts. This relationship is measurable,
well-documented and widely observed among bank marketers.

The second nuance is that product advertising can also strengthen a brand when executed strategically. Even when an advertisement highlights a specific product, adherence to brand standards and reinforcement of differentiating attributes can enhance brand awareness and equity while driving sales.

Finally, there is a third category of marketing that does not fit neatly into either “brand” or “product” advertising: content or engagement marketing. This approach is designed to provide value, foster trust and build long-term relationships. In practice, it blends elements of both brand and product marketing by reinforcing institutional differentiation while presenting solutions aligned with customer needs.

“Content increases visibility through search while giving your institution space to demonstrate its expertise, voice, and perspective,” says Jessica Barnett, Senior Vice President of Marketing, Civista Bank. “Long before someone opens an account, they’re forming an opinion based on the guidance you provide. In a commoditized market, consistent, credible content builds trust and turns expertise into a meaningful competitive advantage.”

The brand payback

Some bankers hold the belief that, while brand might be important, it’s impossible to measure. It’s a necessary evil you have to do, but it should be minimized. The reality is that, while it’s harder to measure than pure product campaigns, it’s absolutely measurable and its financial benefits to the organization are quantifiable.

Capital Performance Group does an annual analysis of the marketing spend of all U.S. banks using call report data. It’s no surprise to us that institutions that have spent more on marketing over the past three years have consistently higher rates of deposit, loan, and revenue growth.

Banks that spend more on marketing achieve higher growth.

There is an optimal level of marketing spend, and up to that point, the bank makes an acceptable return on that investment. Diminishing returns eventually set in, and at some point, an additional marketing dollar no longer meets the hurdle rate.

Brand investment can be measured in several ways. Institutions operating in multiple geographic markets can compare response rates or cost of acquisition across product campaigns in markets with varying levels of brand awareness. Another approach is to increase advertising weight in one market using media channels particularly effective for brand building, such as television and billboards, and then compare sales performance in that market with a control market where advertising levels remain unchanged.

Checking sales in “heavy-up-advertising” markets exceeded other markets by 25 to 35%.

For institutions operating within a single market, controlled and measurable tests can be conducted. A defined audience — such as farmers or veterinarians — can be selected for a yearlong campaign designed to build brand presence and communicate relevant solutions. Establishing a baseline is essential. Account openings during the campaign period can then be compared to those in the prior year to isolate the impact.

Branding extends far beyond logos or individual advertisements. It represents the organization’s identity, character, and differentiation as perceived by customers and employees. Investment in clearly and consistently communicating that distinct story can generate meaningful financial returns in both the short and long term.

Mark Gibson is co-leader of the sales and marketing practice at Capital Performance Group, a strategic consulting firm that helps financial institutions maximize the ROI of their marketing efforts.  He can also be reached on LinkedIn or at [email protected].