Differentiation: The Key to Branding
Human beings are hard-wired to notice things that stand out.
There are only a few basic principles that drive all successful brands. You must be able to consistently deliver something relevant to consumers. And hopefully, your strategy isn’t something your competitors can easily copy, in other words it is difficult to duplicate. The more your brand meets these criteria, the more successful you will be.
But of all the components fueling a strong brand, the most critical is differentiation.
Reality Check: Most financial institutions look, sound and act almost exactly alike.
The overwhelming majority of banks and credit unions have similar-sounding names, use similar slogans, share the same values, offer the same products and use the same basic look-and-feel. (If your corporate color isn’t blue and you don’t use pictures of smiley, happy people, chances are you are way ahead on the “Differentiation” curve.)
Key Takeaway: When financial institutions look, sound and act alike, consumers will dwell on whatever differences they can find. That means when it comes time to make their decisions, rates, fees and locations will be their deciding factors.
Financial institutions constantly bemoan that “price is the only thing that drives consumer decisions” and “big banks get business because they have branches on every corner.”
Reality Check: Financial institutions commoditized themselves. They have no one to blame but themselves. Rates, fees and locations are the only tangible, relevant points of differentiation most financial institutions offer consumers.
This also explains why marketing research in the financial industry always reaches the same conclusions: “It’s all about rates, fees and convenience.” Who needs to pay $50,000 to find out that the only thing consumers want is better rates, fewer fees and more locations?
Bottom Line: You must be different. If you can’t actually be different, at least look different. Differentiation — even if only achieved on a cosmetic and superficial level — will at least get you noticed, and that’s the first step on the way to building a strong brand.
This article © 2012 by The Financial Brand and may not be reproduced.
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Thanks for a good post, JP. I think a big problem for financial institutions lies in what I would call “differentiation perspective.” It’s kind of like when you’re 2 inches from the mirror, staring at yourself, everything looks bigger. That little freckle looks ginormous. But it’s not. Nobody else can even notice it.
Similarly, when you’re up close to your own brand every day, you see a TINY difference between your bank and the competition, and think it’s huge. But it’s not. Because nobody else is looking at your brand as close up as you are. They probably can’t even see that difference, let alone really take notice….or care.
The result is that you think your branches being open until 7 instead of 6 is a BIG differentiator. But it’s not.
Successful differentiation involves differences that are big and prominent enough that someone SQUINTING from 20 feet away can notice. Things that are impossible to miss.
Hi Jeffry,
At CAN we think that Implemented differentiation leads to more different results: economic ones and more far-reaching ones. We have developed a new business model called Civic Banking. Based on the promotion of (new and extended) rights, we want to be leaders in civic finances, so that CAN becomes a benchmark for social and financial innovation.
Take a look to our website http://www.cajanavarra.es/en where you will find more information about us.
Regards
@Jeff – Great analogy.
@Fernando – Thanks for sharing your bank’s vision. There’s a good example of using philosophy and approach to differentiate your financial institution.
I think now would be a great time for bank executives to consider out of the box thinking. God knows they need it!
One thing we always find is that marketing is so quick to embrace change. Think different. Be different. Maybe b/c we as marketers are a bit different.
The next step is going to the “executive committee” where conflicting personalities are slow to change. Don’t like change. Are scared of change.
We find the same thing happens at the BOD level.
However, it is through education and communication that these barriers can be broken down. It takes time, yes, but we are seeing that through constant conversation, people slow to change start to “finally get it”.
Don’t let “no” stop you like a brick wall. Just be prepared to bring a ladder, sledge hammer, shovel or other tool of choice to break through that wall. Just be you. Be creative. Good luck!
Thanks for the post – totally agree with you. Hence, I thought I would share individuum – we’re an Australian financial services business set up specifically to cater for younger investors (target age = Gen X and to a greater degree Gen Y) http://individuum.com.au
I think we are a good example of differentiating (within the Australian superannuation industry and potentially the financial sector) on multiple levels: brand, services (value proposition) and product features.
@Jeffry – very good article
@ Fernando – wow, the CAN site, brand and philosophy are amazing. Congratulations.
@Jeffry – you definitely practice what you preach. Consider your blog – you were not “first to market” so you had no early advantage, in fact, you were rather late to the game, but by looking different, acting different and having the GUTS to stick with that difference – I think you’ve definitely become the leader in financial brand blogs. IMHO.
Brand is your reputation. Period. And you are building a stellar one.
@Denise. It’s not a blog. It’s an online publication! And a stellar online publication at that!
@Denise – Thank you very much. I read some branding advice once that said, “Go where the competition isn’t.” When I launched this site, I realized no one was covering the branding and marketing efforts of retail financial institutions. It’s highly focused, but that’s another principle underlying strong brands. As David Ogilvy said, “Try to appeal to everyone and you’ll end up appealing to no one.”
@Tim – “Stellar?” Thanks! I’d settle for just plain old “good.”
I suppose, in a sense, my calling it an “online publication” is an attempt at differentiation. With all seriousness, I try very hard to run the site as a publication and not just a blog. To me, a large part of the distinction has to do with how much personal opinion and perspective one brings to their stories, and how casual one gets. I try to present most stories with a balanced, objective perspective. Of course, the process of selecting and editing which stories will run is always a biased and personal task, no matter whether one creates a blog or a publication.