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Just How Special & Different Are Financial Services Brands?

by Justin Basini on Mar 08, 2010

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Thanks for the opportunity to contribute here today and the honour of sharing the platform with Tim and Mike.
So the important point here is that context is immensely important.I believe that many of the principles of building brands are common across all industries. This is because they are based on the psychology of ideas and this doesn’t change across categories. However for me these principles are applied in a completely different corporate and consumer context which means that building financial services brands needs a very different approach that other categories. And so I’d like to spend the next few minutes exploring some of these differences in context in the building of financial services brands. But first I can see that after 40 minutes of presentations some of you are flagging so let’s start with a quiz.
Here are a selection of some of the biggest financial services brands in the world. The first person to shout out which of these financial services brands have a CMO on their board wins a bar of chocolate. Depressing though it might be most financial services organisations do not have a marketing leader on their executive management team. We are in the wrong jobs to make it to the top in banking.
This is radically different in other markets. For the last bar of chocolate there is one company here who doesn’t have a CMO on the top layer of management. Anyone want to guess who?All the rest have a CMO. This is the first context that is radically different in financial services:
Financial services companies are hard wired around product and P&L analysis rather than brand and customer. The power within financial services companies almost always resides within commercial product owners rather than marketing. These leaders are trained in P&L, balance sheet risk, regulatory compliance, operational effectiveness not marketing, brand, experience and customer.As we saw in our quiz being a marketer in a financial services company is not a route to the top like it is in other types of businesses. This means that the very logic of brand building, positioning for strategic competitive advantage, customer segmentation, product development based on consumer need are all more difficult in a financial services organisation. The result is an industry that in general creates me-too products which are overly complex, often game the consumer, provide a poor overall experience and are communicated in complex jargon. This is very different to my experience of working in Procter & Gamble where the dominant logic was very much that of discovering consumer needs, developing new products against those needs focusing on building long term brand value which could command a price premium. So the first and most impactful context difference is that financial services organisations haven’t been built to understand marketing and brand building. The next contextual difference is that whereas at Procter & Gamble I was delivering through a set of paramaters which were mostly within my control and could be tightly specified to deliver a specific experience, delivering a financial service is much more messy and this is the second difference that I see.
Financial services are delivered through people and are long term relationships. And people are much harder to manage than a shampoo formulation.This gives us a paradox - that despite the fact that financial services organisations are rational, numbers driven places, at the heart of their business is humanity. The humanity of people delivering the end customer experience and the human beings choosing to buy or not. And the impact of human based delivery is unique amongst mass market product categories. In this regard banking is still a professional service more akin to the lawyer or accountant. Despite the commoditisation and intermediation of technology into financial services the product experience is often made or broken by a human interaction whether that be through a call centre, branch or online chat. In financial services the brand should be something to get behind rather than hide behind
Certainly in most product categories especially the FMCG companies, brands are entities created to effectively penetrate the customer mind and form associations with product performance rather than being a set of associations about a group of people doing something. In most cases in FMCG companies the brand you are marketing is not the brand you work for. Given most financial services organisations have one or only a few brand the internal service and brand alignment challenge in these brands is core and material to their success. From the Indian call centre agent to the CEO in a financial organisation each needs to understand the brand and how it applies to their job. This is made more difficult because ofthenext major difference between financial services and other categories
Financial services products tend to be more risky and complex than many other types of products or services. They require much more effort from the consumer and the provider. An irony of financial services businesses is that the organisation often believes they are the most commoditised of products. I used to be told all the time at Capital One – credit cards are a “low involvement” business. Consumers take a product and then want us to disappear into the background. But having spent lots of time obsessing about how to make white gloop in a bottle exciting to consumers, I don’t think that financial services products are or should be low involvement – they have a massive impact on people’s lives and well being. If they low involvement its probably because they are difficult and complex to communicate and understand. This combines with the terrible mess we are in from a regulatory perspective, defaulting to complete, unedited exposure of all information, to make it extremely difficult for the consumer to make an informed and empowered decision.The challenge, different to many other categories is to engage and educate, and probably show some restraint in who we target and accept. I’ve considered so far some important pieces of context that I think are important and give a unique set of challenges in building a financial services brand. Lastly I’d like to consider whether a core principle of branding is actually relevant in financial services:
The strategic goal of marketing in many businesses is to create a differentiated position in the market that gives you competitive advantage through cheaper cost of sales or price premium for example. Of the many principles that we could consider this is perhaps one of the most fundamental. Actually I’m not sure this has been proven effective for the main stream brands in financial services. If we look at our banks for example. A highly consolidated and inert market with very little to split apart the businesses products, performance or promise. Certainly not enough to encourage mass switching to occur except maybe in those more liquid and more easily gamed products like credit cards. After the disaster of the past few years I would observe that even more than usual our large financial services providers have hunkered down removing any obvious claims to be different and creating a melle of red, blue and green in the middle.I wonder whether actually there is an important insight that comes from this – that in highly consolidated markets where products are complex and risky, where human interaction is the key lever to get right, that actually the main difference between financial services brands and other categories is that....
What financial services brands have the opportunity to do is prosper not by being different but by making a difference. In highly competitive and high switching categories there is definite advantage to creating new ideas that better match and deliver against the consumer’s myriad needs. But the difference in financial services given their complex, impactful and long term nature is that aim shouldn’t be to create the new, new thing to gain share at the expense of customer loyalty but to focus on superior product reliability and partnership as a route to extracting competitive advantage and value. This is how our organisations and products can make a difference. As marketers, we may not be in the right job to get to the CEO spot, we might be wired a little differently from the mainstream in our organisations but given our products are difficult and risky, and are built through human relationships and service, we have myriad opportunities to build great brands which have lasting value for our organisations and customers. Whilst many of the principles are the same in building brands across all categories, the context and opportunities are different in financial services. Whether that makes them special and different is for each of us to decide.

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Just How Special & Different Are Financial Services Brands? — Webinar Transcript

Just how special & different are financial services brands?
Financial Services Forum, March 2010
Justin Baisni ( www.basini.com, www.blog.basini.com)
YOU CAN DOWNLOAD THIS PRESENTATION AT:
www.slideshare.net/justinbasini
The power ofCONTEXT
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© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
Financial services companies are hard wired around product &analysis not brand & customer
© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
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Financial services are delivered through people and are long term relationships
© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
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Financial services - brands to get behind rather than hide behind
© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
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© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
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Financial services products are more risky and complex – they require much more effort from the consumer and provider
© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
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Financial services are high inertia markets – is differentiation as a strategic marketing goal actually important?
© Justin Basini, March 2010 www.basini.comwww.blog.basini.com
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Financial services brands – its not about being different but about making a difference
Just how special & different are financial services brands?
Financial Services Forum, March 2010
Justin Baisni ( www.basini.com, www.blog.basini.com)
YOU CAN DOWNLOAD THIS PRESENTATION AT:
www.slideshare.net/justinbasini