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In Banking, Your Service Is Not What Differentiates You

Ask any bank or credit union in America what differentiates them from other financial institutions and invariably their answer will be “service.” They all emphatically declare, “Service is what differentiates us! Service is what our brand is about!” Here are four reality checks that should encourage your organization to look in the mirror and be honest.

Reality Check #1: As a financial service business, your service has to be good. If it isn’t, you’re out of business.

Of course “service” distinguishes financial services firms from one another. “Service” is, in essence, the “product” service firms produce. If you’re going to differentiate around “service,” you have to be a lot more specific and work a lot harder to define precisely how your service is different and why it is any better. The unique style and flavor of “service” is what differentiates each and every service business in the world.

What if you asked a car company what made them different from all the other car companies and they told you “our cars?” It sounds ridiculous, don’t you think? It dangles a question so obvious and implicit, it’s insulting: “Precisely how are your cars different?” And yet this logic doesn’t seem to apply to financial institutions. There are very intelligent people who never question precisely how their financial service firm’s “service” is any different from anyone else.

“We’re personal.”

Guess what? That’s what the other guy says too.

“We truly care.”


It’s not just players in financial services that struggle with this. It’s something that every service firm in every industry wrestles with — from plumbers to dentists.

Reality Check #2: If everyone says “our service is better,” someone is lying.

Service may be what your organization does best, but that doesn’t mean your service is comparatively better than anyone else. Even if it is true and the level of service at your financial institution is indisputably extraordinary, “service” is so commonly used by financial institutions as a primary brand theme that it is essentially impossible to differentiate around. You can’t take your claim to “better service” out to the public because your me-too message will be lost in the chorus of self-delusional financial institutions. Consumers, unable to sort out who is telling the truth and who is making shallow promises, simply tune everyone out.

Despite what you may believe, all the banks down the street aren’t mean and evil. They have nice people with generally good intentions. They say hello and smile at their customers, just like you do. They have customer service training. Yes, they occasionally drop the ball, but so do you. You’re fooling yourself if you think you can be nicer than the competition.

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Reality Check #3: Saying “service is what differentiates us” is usually a cop-out and a roadblock.

If you ask any financial institution to describe what makes them unique without using the word “service” and you’ll come up empty-handed nearly every time. It’s as if banks and credit unions land on “service” and then never go any further or dig any deeper. It’s lazy. It’s a cop-out that enables financial institutions to dodge the hard questions. Are we really any different?

It’s easy to understand how the notion of “service” gets picked by boards of directors and management teams as the central brand theme for their financial institutions. For starters, it sounds good. Who can argue with “service?” It feels good. Throw on a few zingy adjectives like “premier,” “extraordinary,” “exceptional” or “world-class” and watch heads nod in unison around the room.

The belief that “service is what differentiates us” is the single biggest and most-common roadblock preventing financial institutions from developing a truly differentiated brand strategy.

Reality Check #4: Exceptional service does not necessarily mean providing a Ritz Carlton/Four Seasons experience.

A broad, general “service” strategy often leads HR departments to hire consultants who promise to train staff how to deliver the kind of phenomenal, world-class service one finds at the Ritz Carlton or Four Seasons hotels. That may sound great, but it only works if you target rich people who are willing to pony up big bucks and pay premium prices for VIP service. It’s an operational and fiscal reality: it costs more (a lot more!) to provide world-class service, which is something fewer consumers can afford.

Furthermore, it’s erroneous to assume great service always equates with 5-star, red carpet treatment. It’s not simply a matter of going above and beyond and bending over backwards. There are a lot of other factors that people use to define a quality service experience — speed, level of knowledge, responsiveness, ability to customize/personalize, dependability, etc.

Think about Southwest Airlines. No one feels special when they fly Southwest Airlines. You’re not part of the jet set, you’re flying the low-cost “bus of the skies.” And yet consumers love the Southwest brand because it is the most fun airline out there. Southwest’s sense of humor, funny personality and jocular attitude is what distinguishes their service experience. Their brand is about making an otherwise miserable experience fun.

How come there isn’t a bank or credit union with a brand similar to Southwest Airlines? A brand built around fun? What’s stopping them? Perhaps it’s that they all still believe it is their “service” that separates them?

All content © 2017 by The Financial Brand and may not be reproduced by any means without permission.

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  1. Jeff Stephens says:

    My biggest hope is that it’s not just consultants and vendors reading this post and these comments. It seems most of us in the providing-services-to-financial institutions business totally get this, but the banks and credit unions themselves rarely, if ever, do.

    As I have often said, it’s called “differentiation” not “betterentiation.” One of the MANY problems with using service as a “differentiator” is that service is something everyone tries to be better at. It naturally lends itself to comparison. Every adjective preceding “service” ends in -er, -ier, or -est. Friendliest people. Better customer service. Etc.

    Banks and credit unions need to stop comparing themselves to others in terms of service. Instead, just do this: Create a distinct experience based on an authentic brand story (the Southwest example you gave is a perfect one) and then simply work to make sure EVERYTHING you do proves that brand story. Don’t worry how it relates to what others are doing. Nobody cares about “funnier service”, they just care about if the experience they get is something they align with…and if that means funny, so be it.

  2. Jeff Stephens says:

    In all fairness, though, WE know how trite and common it is to use “service” as a differentiator, because we are all fortunate to have the opportunity to work with and talk to hundreds of bankers across the country every week. But if you’re a credit union CEO in the middle of South Dakota you probably don’t have the same opportunity to compare notes with hundreds of your other counterparts. So you may not realize how totally generic your positioning is.

    Also, in my experience, financial institution execs actually really sincerely believe their service is superior. And in many ways, that’s a great thing. They just need to wake up to the reality that it’s not as unique as they think. I always tell our clients, “I hope your service really IS the very best. And you should keep working to improve it all the time, because that’s a wonderful quality. But you can’t use that as your differentiator, because it’s not one.”

  3. Jeff Stephens says:

    I’m not rolling my eyes, I promise! Good comment, Jill, and thanks for chiming in. I agree completely that you shouldn’t build the MaPS brand around fun…because it’s not authentic (that was just an example in general) to you guys specifically. Brands definitely are what others say you are, but the question is this: where do others get that impression of you? They get their impression from their actual experiences with you–in other words, your true colors shining through. That’s why I believe the brand development process has to be about FINDING the story from within (a very introspective process) rather than asking others what differentiates you.

    In your case, fun is not who you authentically are. And that’s totally fine. But a credit union or bank needs to gain some additional clarity about what it actually, truly, authentically is. When doing that “find the story” process, there is no right or wrong answer–there is only authentic or not authentic.

    The need for a single word that describes your brand is not really about the word itself, but is about focus: until you can sum it up in a super concise way, there’s not enough focus…and when you don’t have enough focus, you can’t be very effective in delivering the brand.

  4. Niche Banking says:

    Jill, just a clarification to ask you. You said: “When times are tough, people won’t bank with you because you’re fun, they’ll bank with whoever can give them back the money they deposited.” The specific idea of “fun” aside, do you believe the only brand story a financial institution can create engagement around is money-related? (I hope that question makes sense!)

  5. You make a great point:

    “The belief that “service is what differentiates us” is the single biggest and most-common roadblock preventing financial institutions from developing a truly differentiated brand strategy.”

    So many financial institutions have focused on the idea of ‘service’ as a differentiator. But, too many don’t stop to think about how broad the definition of service really is, how their competitors may also be using service in their messaging, and perhaps most importantly – how consumer expectations of service (from financial institutions or other companies) have changed in recent months/years.

    Like you’ve said here, financial institutions need to be more specific when using ‘service’ as a differentiator. If a company is set on service, I’d challenge the marketers and executives to identify a certain aspect of that service that is indeed different. An exercise like this can start to reveal any existing points of differentiation relative to service, or shed light on the fact that your service isn’t much of a differentiator at all.

  6. Jonathan says:

    Great article – so true, I can’t count how many times I have heard that from different institutions. IMHO, if you say “service” is what you are known for, that basically means you don’t have anything good or outstanding to offer anywhere else. If you did, you would be capitalizing on that instead. I agree, “great service” is a cop out.

  7. Betterentiation. That’s funny.

  8. Niche Banking says:

    @Jill Thanks for your response–you understood exactly what I meant. And I’m glad to hear you say that. We believe banking brands in the future will definitely be built around creating engagement around non-financial topics. It’s easier when you look to other industries. Harley Davidson doesn’t really sell transportation options, it sells badass-ness. If we have anything to do with it, we’ll see more of that kind of approach in the future.

  9. Jeff Stephens says:

    @Jeffry I think your word “irreproducible” is the best term on this page. If banks and credit unions could focus on that alone, the entire industry would be a very different place. That’s one point I’ve been emphasizing heavily in my speaking gigs lately: A bank/credit union is a commodity because the customer feels there are so many substitutes that are essentially (if not exactly) the same. Thus, everything a bank/credit union does should be centered around creating something for which there is no substitute. Or, as you put it, “irreproducible.”

  10. Jill Nowacki says:

    I’m crashing the consultant-only party here, and I’m just going to go all out with a stereotypical “she’s an actual financial institution employee so she doesn’t get it” confession: I hotly contested and killed the idea of building a brand around the word fun at my credit union.

    Please don’t roll your eyes. Here’s why:

    Everything I believe about brand stems from the idea that your brand is not what you say you are, it’s what others sayyou are. Others- at least those who are actually using our financial services as opposed to those within the industry who might see some of us out and about- will never say we’re fun. Fun is not what people look for in a financial institution, it isn’t believable, and it isn’t a golden handcuff. When times are tough, people won’t bank with you because you’re fun, they’ll bank with whoever can give them back the money they deposited (hopefully, with a little interest).

    That said, I know we can do better than “service” or “security” as differentiators. And I think many already do. I just don’t know how good we are at boiling it down to a word or two. Brands are sensory. They’re holistic. They’re emotional. Maybe our bigger problem is not that we don’t differentiate, maybe it’s just that we’re not philosophical and/or articulate enough to come up with the one word that describes that whole je ne sais quoi that is us. So, rather than talk about it, we keep doing the things that make us who we are and when our consultants push us for one word that sets us apart, we choke and talk about our serivce.

    As a consultant, maybe the best thing you can do for your clients is stop asking, “What differentiates you from any bank or credit union in the USA?” and then getting frustrated with their answers. Find another way to hear that story and learn that answer and then tell your client what their (believable, desirable) differentiator is. After all, if my brand is what others say I am, isn’t there greater value in asking others what differentiates me?

  11. Airlines are providing a service no one really wants. No one wants to fly just for the sake of flying. They want to get to where they’re going. Airlines (like banks) are merely a means to an end. If trains were faster, people would take them. Southwest has chosen an operational model built around the lowest cost while wrapping itself in a fun brand. If Southwest was just cheap, no one would talk about their brand. They make the act of saving money (something we all want to do) on air travel (something we all have to do) more enjoyable than their competitors.

    The article doesn’t advocate for all financial institutions to deploy a “fun” brand; it isn’t even remotely appropriate for many. But out of nearly 20,000 banks and credit unions, it’s hard to believe there isn’t one who tries to make the chore of banking suck less (keep in mind that “easier” isn’t the the same thing as “fun”). Banking can be more engaging by making it more entertaining, using games and adding a sense of humor. You could certainly go too far with it and get wacky, but exercising a certain amount of restraint should keep the brand from undermining the basic level of professionalism people expect in their financial matters. With every brand in every industry, the basics will always have to be in place. Does Southwest’s sense of humor undermine consumers’ confidence in the airlines sense of safety and professionalism? Maybe for some, but generally I don’t think so.

    Is a “fun” brand (in any industry) what every consumer wants? No, not at all. But it’s an unrealized opportunity for the appropriate financial institution.

    Ultimately “fun” isn’t the point. It’s just one example of how a non-optional service like air travel and banking can be branded. The point is to identify a style and flavor of your financial service experience that is distinct, relevant, credible and (hopefully) irreproducible.

    Jill, part of what you’re wrestling with is the distinction between the “brand” (how people perceive you) and “brand strategy” (the perceptions you’d like people to have of you). Most financial institutions have a fairly willy-nilly approach to branding; their strategy is not clearly defined. You could go out and ask the public what the brand stands for, but in most cases, you’re going to get such a wide range of answers that it isn’t very helpful. I agree that brands (and their strategies) can’t be distilled down to one word. But an organization must — at the very least — have some intent, direction and focus for their brand (i.e., a “brand strategy”). Branding is the act of trying to deliberately shape people’s impressions about an entity. You try to steer people’s perceptions, then research to see how you’re doing. Are you hearing people say your brand stands for what you want it to stand for? If not, you make changes. If the brand is heading in the direction you want, then you watch your bottom line and monitor its impact.

  12. We are in a commodity industry. All of our services can be readily found on the internet at a much better price than we have in a very short time. That’s why efficiency has to be a part of our equation at all times. Drive down operating expenses relentlessly.

  13. Jill Nowacki says:

    @Niche Banking I *think* I understand your question, and if I do my answer is no. I don’t believe a financial institution should create an engagement strategy around money to any greater extent than I believe, for example, that Nike should create a strategy around shoes.

    Nike’s most effective campaigns (for me, as a runner) have emphasized what a person can do with their shoes. Nike doesn’t make me think of footwear, it makes me think of running and the peace of mind, stability, health benefits that running gives me.

    I’d love my CU to be positioned in the minds of members not for the experience they get when they come in, but for the opportunities that are created because of their relationship with us. I don’t want to sell checking accounts or auto loans; I want people to come to us for financial freedom, quality of life, extra time with your loved ones not spent haggling over bills, etc. So, maybe things money makes it easier to reach, but not money, per se.

    (I hope that answer is a reply to the question you actually asked!)

    @Jeff and Jeffry: I did understand that fun was just an example; I just continued to build on it because it was a specific example I actually had experience with that wasn’t right for us. I do see how it might be right for someone, though. (Unless we get a Wii in every branch, I’m going to dispute it.) I really appreciate your comments related to focus. I think it is very accurate to say that is where I’m struggling: I understand that I need to find a focus and I think I know how to tie everything to that focus once I have it, and I understand the big gray area of what we (and our members) feel we are, I’m just having a hard time adding the contrast that will make the gray area black-and-white and in focus. That’s why I end up telling everyone that what we stand for is great service and a community focus with super competitive rates. Kidding. Seriously. Just kidding. I know that’s wrong; I’m just still struggling to determine what’s right for us, specifically.

  14. Jill said, “I’m just having a hard time adding the contrast that will make the gray area black-and-white and in focus.” What a beautiful articulation. It’s a perfect metaphor for branding.

  15. Jeff, regarding irreproducible. Michael L’Ecuyer, President/CEO at Bellwether Community Credit Union, gets credit for that one. He suggested to me that simply having a differentiated brand is not enough. You can be different from competitors today, but if you’re doing something that works, they’ll try to copy you. He’s 100% right. If your brand is easily copied, then what’s the point of differentiation? The best brands are too hard or take too much time to replicate. Some can’t even be considered by any other players.

  16. Jerald Acedera says:

    I agree in part. However, I believe that service is a definately a differentiator (among others) and can truly set an organization apart from its’ competitors. Understandibly so, service has to at least be good for an organization to be profitable, but “good” is not what separates your organization from the rest and in the long-run. At times, not even “great” service. “Consistency” of great service is what can differentiate yourself. If everyone is saying their service is what differentiates them, then yes, someone must be lying but not neccessarily; afterall, good or great service is subjective. Nonetheless, one can make a case as to why their service is extraordinary compared to another within and across multiple industries. In that, service is a differentiator. Saying service is what differentiates your organization from another is not a cop-out, unless of course, you can’t prove it. If you have no bearing as to how or why your service is superb compared to the rest, then yes, you copped-out. As you mentioned, giving extraordinary service is not giving each customer the Ritz Carlton experience, but giving them an great experience on consistent basis, period. If you’re looking to treat each customer as a VIP, then VIP service becomes standard, so the question now becomes, what can you do for me now? New innovate products? No. Products can and always will be copied if not overcomed by next quarter. The people hired to deliver the service is what will separate the successful organizations from the unsuccessful ones and not the products of that organization produces. A product may drive customer growth short-term, but I don’t believe products alone can be as successful in retaining existing customers as service delivery can.

  17. Given that this discussion started with the premise that it’s futile (and delusional) to attempt to differentiate your financial institution by claiming you deliver exceptional service, I offer a corollary, common, and equally futile (and delusional) construct: “our people are what make us different.”

    Right. And if I had $5 for every CEO or senior leader who’s said that in public, I could just about open my own institution.

  18. Dan Rosenfeld says:

    Yep. Service is a terrible brand differentiator. Not only does almost every bank/CU pride themselves on service, but prospective members won’t have the ability to understand the quality of service until they experience it themselves. At the time of the initial brand communication, ‘service’ is completely intangible and useless. People have heard it before and will look the other way, just as this article states. I agree with Jill Nowacki; it’s useless, unless someone else is saying it about you, at which point it becomes very valuable. Creating brand ambassadors in for your organization is more behavioral and cultural, as is service. It can certainly be left out of communications.

  19. You’re right Dan. “Service” — like “trust” — can only be something consumers experience. It can’t be something you promise or else you sound like a used-car salesman: “You can trust us. Our service is excellent.” It’s a really tough message to take to the public. Actions trump words.

  20. I absolutely LOVE this article. This tendency to make “superior service” a differentiator has been going on since I can remember and it isn’t acceptable even when it IS true, but most certainly if it isn’t. (How many companies claim they have great service but it’s not grounded in fact?)

    However, there might be some things a company can DO with their service that would set them apart. For example, I like the SW “fun” analogy. Like most aspects of successful branding, however, something so radical would have to truly become part of the company’s culture and not be just another executive decision. Do the employees feel like they are having fun when they come to work everyday? If not, then the strategy never made it out of the conference room.

    In other words, it’s just easier to hire good people, train them, and then and say we have “superior service.” To qualify that in some unique and measurable way is another matter.

    Great article!

  21. I really appreciate the emphasis on thinking about what makes you ‘different’ than the other guy. I also appreciate distinction between brand and brand strategy – I get those confused often. And (Jeff S.), I appreciate differentiation over betterentiation – that’s good. Sharpens my thinking. Great article. Thanks Jeff.

  22. A great post. Love what you say about “working harder to define precisely how your service is different.” We definitely talk about the service at our partner community banks and credit unions as personal, but thinking about exactly “what our flavor is” is a great idea. And thinking about the factors that people use to define quality service has got us thinking as well!

    Here’s to infusing a little bit of the Southwest Airlines ‘tude into banking. ☺ Thanks for the ideas!

  23. A very good & timely article. I’m doing a service project for a big bank and I’m guilty of referencing Ritz Carlton. I feel ashamed. Helps me see things a little differently

  24. Brave admission Thomas. Thanks for commenting.

  25. Great Article

    It should be a must read for every banker in the United States.

  26. Kevin Tracey says:

    I think the word differentiation is misused in the context of branding. Difference is being different but not necessarily relevant. If I wear an Aloha shirt to a meeting in New York, it would probably show that I was different, but where is the relevance? “Singular Distinction” gives differentiation with relevance, and is a better description for difference with meaning. I also believe that customer service can become a singular distinction if each task performed by stakeholder has the brand values and essence integrated into it. Disney has done this very well. Kevin

  27. Kevin, you are right in that simply being different is not what branding is about. As the article “Four Things Your Brand Must Be” points out, the best brands aren’t just different, they are different in a meaningful, compelling and relevant way.

    However, there is a reason brand-builders obsess over differentiation, which the article “Differentiation: The Key to Branding” explores in greater detail.

  28. Kevin and Jeffry, the discussion of relevance is a good and important one. My concern is always that banks and credit unions go about things in the wrong way: they look at the market and ask “what does the market want us to be?” and then they become “relevant” by trying to mimic what they think the market wants. The problem with this approach is that it creates inauthenticity. The bank/credit union isn’t being who it truly is…it’s pretending to be what it thinks the market wants just so it can be “relevant.”

    The better approach in my experience, is to figure out who you are as a company, be that 100%, and let customers who find your brand relevant to them, be drawn to you. That’s a better approach to relevance in my opinion.

  29. Jeff, that’s a good point. There’s also an article here at The Financial Brand about the difference in these two fundamental approaches to building a brand strategy, “Inside-Out vs. Outside-In.”

    It doesn’t matter which approach a financial institution uses. What matters is that they plant their flag in the ground as say, “This is what we stand for! This is who we are!” But most really struggle to get past the most obvious answers.

  30. Kevin Tracey says:

    Jeff Stephens is right on. Brands need to reflect the true essence of who they are and what they stand for. Not what they think customers want. Kevin

  31. Think of Henry Ford, who remarked that if he focused on what his customers wanted he would have just bred better horses. No one would have faulted him for listening to the marketplace – but he would have been one of many horse breeders, without that singular distinction Kevin mentioned early in this thread.

    Yes, we must pay attention to what our members/customers want to accomplish. But then we need to combine expertise with innovation to find a singularly distinctive way to help them accomplish that. Meeting that challenge is what creates a successful brand.

  32. I raise my hands as a guilty one in believing that ‘We provide Superior SERVICE’ means a thing to the client. Service is the least a client expects, or why else is he in your branch. Very insightful and thought-provoking article. My thinking cap is on my head right now.

  33. Kevin Tracey says:

    I agree that great customer service is not a differentiator. Customers expect good service and if you don’t deliver, you’re out. Great customer service keeps you in the game — but not into the end zone. Making and delivering on a brand promise that gives a “singular distinction” (differentiation with relevance) is the real way to gain brand equity. That said, many institutions need help in learning how to deliver exceptional customer service.

  34. Shannon says:

    Brilliant article!! Every FI in NORTH AMERICA should read this and put their thinking caps on!

  35. Very timely article for me. I agree on all points save the assertion that providing a Ritz experience implies red carpet. I equate a Ritz or even Nordstrom experience with 100% selfless customer focus, not ostentatious trappings. There is a nugget of true differentiation there for me that creates an ownable culture rather than another slogan. Thoughts?

  36. You’re right, in that there is very much something to the idea of 100% selfless customer service. If you could execute that concept — 100% — you’d have something special.

    The Ritz/Nordstrom service experience isn’t about ostentatious trappings (e.g., fancy store, expensive items). It’s about the cost model. To provide the Ritz/Nordstrom level of service simply costs more. You can’t be a $250 million credit union running on thin margins with a lean staff and expect to be able to deliver that level of service. For instance, the amount of time an employee could spend per customer per interaction will be constrained. Ritz/Nordstrom has big, fat, juicy profit margins, so they can afford (1) higher employee-to-customer ratios, and (2) higher caliber employees, people with more experience and better people skills. They can afford to have as many employees as it takes to make sure no one has to wait.

    As an analogy, imagine two cruise ship operators. One touts its high level of service. Taking a cruise with them isn’t cheap, because it costs more to have 2,000 crew members serving 2,000 passengers. That’s what it takes to make sure there is always someone on hand to serve everyone’s needs quickly. The low-end operator is playing the volume game. With thinner margins, they might only have 1,000 crew for 2,000 passengers. That’s going to mean less service, fewer services, longer wait times, etc.

    I suppose what we’re talking about here is the difference between the micro- and macro experience. Yes, on an individual level, each employee could have the “100% selfless customer focus” instilled in them. But at a macro level, having enough staff to cater to folks in a way they’d associate with Ritz/Nordstrom requires more money, bigger profit margins.

    Also relative to profit margins, there’s the fabled “Nordstrom Tire Story,” which you may have heard before. An elderly woman brought a set of radial tires into Nordstrom, so the story goes. She wanted a refund, which is odd considering Nordstrom doesn’t sell tires. Nevertheless, Nordstrom gave her the refund anyway. For years, this parable was repeated among consultants as the pinnacle of service. But what makes this “phenomenal service” possible is the fat markups Nordstrom charges on luxury items. They have a reputation for doing anything, bending over backwards. That costs money.

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