Anyone who’s ever been to a presentation on marketing or done a marketing course will know that there are branding examples-a-plenty in fast moving consumer goods and a dearth of them for financial services.  This is largely for two reasons. One is that FMCG companies have a much richer history of applying branding principles in their industries.  The second is that there are few examples of branding excellence in the financial services market because of a range of challenges peculiar to this industry.

Many people put financial services under the one banner that reads: boring, they’re all the same, it’s too complex to understand and I don’t have the time, energy or will to learn about this stuff.

The result is a low level of involvement (engagement). Without involvement, it’s difficult to build brand equity.  This is one of the main reasons why financial services businesses have only been successful in building brand awareness rather than brand equity. Just think about the big banks, life insurers and wealth management businesses, most consumers would say “I’ve heard of you and I know what you do, but I don’t know what you stand for, how you’re different and how it relates to me.”

This inturn leads to a consumer focus on the key functional brand attributes that they can understand and compare: returns, interest rates and fees. Financial services marketers then focus on these same things and in doing so, exacerbate the commodification of brands across their industry, which feeds back into low involvement and low brand equity. It’s a vicious circle of consumer focus and margin-destroying discounting by providers that the financial services industry hasn’t yet figured out how to get out of.

There’s an old saying in marketing and sales: ‘Live by price, die by price.’ Solely focussing on price and cost-related factors means that you’ll keep winning until someone else figures out a way to be cheaper or deliver better returns than you.

Contrast this with a high-involvement consumer product. You want it. You’ve researched it. You know the options available. You know which one suits you and why. You’re aware of the pricing, but you’ll pay more for the right one for you. You are very involved and the product providers are in a great position to build their brands because you are.

Most financial services businesses operate under one, dominant master brand (eg. HSBC, NAB, Citi ). Although this can bring focus and efficiencies to the branding effort, it also presents a considerable risk in that you’ve got one shot to get it right. It’s not as if you’re wearing a reversible jacket that you’ve spilled food on; you can’t simply turn it inside out and move on as is nothing has happened. If you stuff it up, it will contaminate all of your products and services.

Contrast this with a house of brands (like Proctor and Gamble) where ruining one brand will not contaminate all of the other brands.  This branded house risk issue is one of the reasons why financial services branding lags other industries, especially in terms of innovation and trying new marketing techniques (such as fully embracing social media).

Most financial products and services are perceived by your average punter as complex and too difficult to understand so they focus on the top line numbers only and bury their heads in the sand. This leads to low involvement and considerable difficulties in engaging your market. Without engagement, it is extremely difficult to build brand equity. It is also one of the reasons why distribution and personal selling are so dominant in financial services. People just want someone, who they perceive to be an expert, to tell them what to do. Contrast this with a category that’s perceived as less complex, like washing powder. People are more prepared to do their own research, compare the options and get involved – making it easier to build brand.

In financial services, one of the largest impacts on your brand equity is the brand experience your organisation delivers to your market. As people, not machines, deliver the brand and service experience, you have no way of absolutely controlling the delivery or the outcome.  Daily, millions of interactions are occurring in call centres, through personal selling, via email responses and in branches. Every interaction is a moment of truth where brand equity is either being built or destroyed. Whilst you can carefully craft your brand, messages, procedures and approach, you can never account for variables such as a staff member having a bad day.

Contrast this with a laptop PC production line that can produce the exact same product, time after time. Machines can have bad days too. The difference is that they rarely directly impact the customer.

But perhaps the most difficult aspect of quality to control in wealth management, due to the influence of industry, market and economic conditions, is returns.

This one seems to be a fact of life.  ‘Everyone hates their bank, but nobody is prepared to do anything about it.’ This is a classic case of low involvement and poor brand equity in the market (ie. the perception that all banks are the same so why bother…).

Contrast this with an organisation like Apple Computers that customers simply love. They have totally bought into the Apple brand and will voraciously consume all of Apple’s marketing and voluntarily strengthen their associations with Apple as a result. It is much easier to build brand equity in this environment.

With great branding being so tough, who are the standouts then? HSBC and American Express come to mind as very large organisations that have consistently and passionately delivered on their respective brand positions. Bendigo Bank is a pretty clear choice at the smaller end.

Bruce Stafford