Most large financial services providers have done a good job of building brand awareness, but not brand equity. Brand equity is a combination of brand awareness (have they heard of you?) and brand associations (what the target market identifies with your brand - the words, images and emotions that your target market would use to describe your brand). It’s what’s left in the target market’s mind after you take the commodity of your product away.

Take the can of soft drink away from Coca-Cola and you are left with ‘fun’ and ‘good times’. Take the mowing service away from Jim’s Mowing and you are left with ‘reliable’ and ‘trustworthy’. If you asked your customers what’s left in their minds after they take away the commodity of your product, do they really have anything meaningful left to say?

Building brand equity in financial services is tough but the future rewards for the providers that achieve success will include higher customer retention rates, more engagement by customers, higher buy-in and responses to communications, reduced customer reaction to changes in fees, rates and returns and higher customer growth. Another bonus is being able to attract and retain the best staff in an ever-more globally competitive employment market – people want to work for great brands.

After achieving a base level of awareness, there are three key components to building strong brand equity in financial services.

• Brand utility – target market’s perceptions of your ability to deliver a core benefit.


• Brand emotion (association) – feelings and adjectives customers would use to describe your organisation after you take the commodity of your product/s away.


• Brand energy – target market’s perception of the direction of your brand.

Let’s examine brand utility from a wealth manager’s perspective. A wealth manager has core benefits to deliver.  This would include returns for a reasonable fee, security and transactional functionality.  Brand utility is the base benefits that providers must master before they can expect customers to fully buy-in to the other brand attributes of emotion and energy.

Even given the global financial crisis, most large wealth managers are still perceived by customers to be safe and secure. This is a function of both the brand awareness that providers have achieved and the heavy regulation (including the recent intervention by Governments) of the industry. Ironically, heavy regulation increases customer confidence in the entire industry, which results in lower engagement “I don’t need to worry about the security of my money because I know the Government is all over it”. If managed funds weren’t perceived as secure, there would be far more engagement by customers primarily motivated by the fear of something happening to their money.

So the brand utility of security is well and truly covered. But equally so by most large wealth managers and as such, provides no competitive differentiation.

Customers expect to be able to quickly and easily transact with their wealth manager. Their transactional expectations are relatively simple: buy and redeem units; access up to date performance or account information; and find information about the fund and its products including investment options. The key is simplicity. Wealth managers must strive to make dealing with them incredibly simple and efficient (despite an increasingly complex regulatory framework). The majority of customers have no appetite for complexity and are time poor. If they are able to quickly and easily transact with you, they will be satisfied.

Finally, customers expect their wealth manager to live up to their fundamental core promise of delivering returns for a reasonable fee. If customers perceive you are not delivering on this base promise, you have a real brand utility problem to deal with.  Interestingly, customers aren’t generally making deliberate, rational comparisons of your returns and fees against other wealth managers.  It often comes down to a simple perception, which is largely influenced by your marketing. There are funds in second and even third performance quartiles and others with comparatively high fee structures with customers who still perceive them to be delivering on their core promise.  As an example, BT did such a great job with it’s marketing in the 90s, that only a very long period of poor performance would shake its reputation as a high-performer.

Brand utility is therefore a perception by customers that a wealth manager is secure, provides simple transactional access and is delivering on the core promise of returns for a reasonable fee. Financial services providers should strive for strong brand utility, simplicity and think twice before increasing more product and service complexity.

On a foundation of strong brand utility, financial services organisations must move on to developing brand emotion. Brand emotion comes down to what customers think of your business beyond the commodity of your products. If nothing material comes to their mind when asked about your business, you have no brand equity. If ‘safe and secure’ comes to their mind, you only have a component of brand utility, not any brand equity of competitive value. You are looking for adjectives that your customers use to describe your business that indicate emotional buy-in on attributes that are meaningful to them and that ideally, they only attribute to your business.

Building brand emotion requires providers to stop focussing solely on marketing functional attributes such as fees, rates and returns and to do the research to identify and creatively execute more emotive benefits and messages. Some of the more effective ways to execute this include using celebrity and entertainment, active delivery of content, leveraging peer-to-peer marketing channels and tapping into non-core-product related customer interests.

Brand energy comes down to customers’ perception of the direction of your brand (see The Brand Bubble by Gerzema and Lebar). If your brand is perceived as constantly moving forward, you will generate far more brand equity than a brand that is perceived to be stationary or moving backwards. Brand energy applies to both brand utility and brand emotion. Brand energy actually intensifies brand emotion and can even make up for low brand emotion through a ‘halo effect’, which creates an overall positive disposition towards a brand so that all they do is viewed positively and with interest by the market (companies that benefit from the halo effect include Apple, Lego and Harley Davidson).

While brand is becoming the key deciding factor for consumers, Brand Asset Valuation studies show that there is a developing consumer malaise towards brands in general.  Consumers are falling ‘out of love’ with less dominant brands and this trend also has implications for financial services companies.  Only the strongest brands will derive full market benefits and the others will be left behind.  In a nutshell, brands have never been more important, but there are now fewer important brands.

The developing brand malaise is due to three interrelated contributing factors that are related here to banking.

Excess capacity
There is a plethora of bank, credit union and building society brands actively being promoted in the market. Many of these have no real basis for differentiation so customers simply can’t tell the difference between them. This lack of differentiation, coupled with the high level of regulation and the focus on fees and rates is leading to the commoditisation of all brands in the industry.  The net effect is that banks are forcing customers to focus on functional (rational) benefits at the expense of the emotional benefits required to build brand equity. As a result many bank brands have blurred into a sea of ‘sameness’.

Lack of creativity
The shear volume of messages (different studies quote consumers are subjected to between 3,000 and 5,000 a day) has created an incredible amount of clutter. Consumers now have shorter attention spans than ever (according to the BBC, thanks to the internet, the average attention span is now 9 seconds – the same as a goldfish).  A bank’s marketing must be exceptional to break through the clutter.  The industry’s focus on functional benefits has led to a transactional relationship and many banks have similar marketing approaches, contributing to low levels of brand differentiation.

Loss of trust
Brands originated as trust marks. You knew that eating a certain brand of tuna wouldn’t kill you – so you trusted it and bought it. But the amount of trust placed in brands is a fraction of what it used to be.  Consumer confidence in brands has been rocked by corporate scandals including Enron, Exxon, Worldcom and the realisation that David Copperfield isn’t really magic.
Anti-brand campaigning is now occurring, from books including Bonfire of the Brands and No Logo to websites like www.brand-aid.info that teach you how to de-brand your life.

There is also a move away from traditional advertising to peer-to-peer mediums (blogs, forums, online reviews, word of mouth, etc.). Consumers believe each other far more readily than they will believe companies spruiking their own wares.

To sum up, differentiation goes stale. Financial services companies have to keep on being different as past branding does not guarantee future benefit in the minds of customers (existing brand equity is literally a reflection of past accomplishments).

Consumers are drawn to that which is new and exciting, that which constantly re-engages them and brands that are constantly moving, innovating, adapting and leading the market. Young & Rubicam’s Brand Asset Valuation model shows the world’s highest-energy brands to include Disney, Microsoft, Nike, Google, Pixar and Target - all are very creative and constantly evolving.  Consumers are looking for a long-term upside to emotionally buying into your brand and an upwardly mobile financial services company delivers this perception. You must deliver this if you want your customers to continue to invest their time and energy in your brand. Financial services companies may never reach the lofty heights of a Microsoft, but they must continually strive to surprise, inspire and lead their customers.

Brand energy boosts brand differentiation. It is the promise of the future of the brand. It reflects a brand that is constantly moving forward, is future orientated, revolving and refreshing. In Annie Hall, Woody Allen said: “A relationship, I think, is like a shark. It has to constantly move forward or it dies. And what I think we got our hands on is a dead shark.” This little gem captures exactly what energy adds to brands.  Brand energy leads to greater emotional buy-in by customers and substantially improves a business’ ability to build brand equity.

Companies no longer fully own their brands.  Consumers are the new owners.  They are taking control and your brand’s future is in their hands.  Driving this new brand ownership paradigm is the advent of social media, changing media consumption habits and views and the fact that consumers now trust each other more than they trust what you say about yourself (and technology is enabling word-of-mouth advertising on a massive global scale).

As we don’t fully control our brands anymore, we are more than ever subject to the ebb and flow of market sentiment so we must now actively guide our brands through the market place.  And as customers continue to take control of your brand, your investment in developing strong brand utility, emotion and energy will improve your business performance in the years to come.