The ugly downside of bank bashing
August 17, 2009
Financial marketers often portray each other as sneaky, greedy, self-serving, mean, old farts.
These are just a handful of recent examples covered here at The Financial Brand.
is it any wonder why the banking industry has such an ugly image in the public eye?
J.D. Powers recently found that consumers feel a bank’s brand is more important than its pricing or product availability, which must make it tough for folks to find bearable financial providers, because another study earlier this year found that consumers now put banking in the same ultra-reviled category that was once reserved solely for big tobacco.
“Lawyers should go buy
bankers a drink and say,
‘Thanks for getting us
out of the spotlight
for a few months.’”
– Tom Yorton, Comedian
If the financial industry wants to find the culprit behind their branding woes, it needs to look no further than itself. Surely the high-risk actions taken by financial institutions during the subprime heyday have left nasty scars on the industry’s image. But financial institutions of all kinds have been making banks the subject of ridicule in their ads for decades.
WAMU – THE BANKERS’ PEN
In this TV spot circa 2007, WaMu is keeping a bunch of bankers in its lab. The affable host says, “It’s simple. If these stodgy, old bankers think an idea is wrong, we know it’s right.” Caged bankers were the butt of WaMu’s jokes in a popular ad campaign that lasted just up until its implosion.
Reality Check: It may be easy and effective for financial marketers to make their competitors look bad, but if you spend enough time telling people your industry sucks, they’ll believe it.
Considering people’s frustrations with the financial industry, it’s obvious why so many banks and credit unions would take their marketing in this direction. It’s not wrong at all for a financial institution that is truly superior to make its point by drawing stark contrasts between themselves and their competitor(s). In fact, when marketing anything, this has proven to be one of the most effective methods to shape people’s perceptions. That’s why politicians always “go negative.” By shaming your competition, you implicitly align yourself with all things wholesome and righteous (or so the theory goes).
The problem is that so many financial institutions are collectively sending the same, consistent message — “the other guy sucks” — consumers will just lump everyone in the same sucky category, right alongside big tobacco. “Banks? Bah…they’re all the same.”
Key Questions:
- How can financial institutions rebuild consumer trust when so many of the industry’s own marketing messages say bankers are untrustworthy scum?
- Do consumers really see a difference between banks and credit unions?
- At what point can the financial industry no longer withstand the mockery, self-loathing and shame it heaps on itself?
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Previous related stories from The Financial Brand:
- Banks: Less differentiated than a bar of soap
- Differentiation: The Key to Branding
- Don’t throw the TARP on credit unions
- ‘Banking’ isn’t the B-word credit unions struggle with
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Filed Under: Branding
August 17th, 2009 at 10:08 am
Very good points. I don’t mind a gentle poke here and there, but you are right, at some point it just paints everything with the same brush.
August 19th, 2009 at 10:41 am
Banking is a mature industry and the basic business of banking is relatively simple in concept. Over time banking is also very profitable – which attracts competition and requires differentiation. As I see it there are three options to differentiate: Product Innovation, Branding, or Change the Business Model.
Innovation can be good and bad. Historically good innovation in banking has tended to add consumer convenience while adding costs to the bank (i.e. Checking Accounts, ATMs, Internet, & Mobile Banking). While the pursuit of these convenience innovations is often guided by a desired change in consumer behavior (i.e. less branch visits), it usually just adds to costs. These costs (and the desire for short term profits) drive bad innovation. The result is often complex products & services that benefit the bank through reducing costs or increasing fees / interest income. The alternative to bad innovation is to add an upfront fee but this is perceived as differentiation in a bad way (i.e. monthly fees or teller charges).
Brand is a very effective way of creating a difference in consumer’s minds without the need to really offer products that are materially different. Your Washington Mutual commercial is classic – I personally miss their commercials – but WaMu also represents a classic bait and switch. They simply promised something they did not deliver. Brand also allows you to emphasize a different aspect of the business than your competition and this is where credit unions always seem to focus on service.
Changing the business model is the most radical and fundamental way to differentiate. Usually business model changes in an industry as mature as banking have limited success or are very risky unless there is a compelling reason for consumers to change their behavior. The Great Depression was the compelling reason for the emerging credit union movement to take hold in the US.
In a relative sense credit unions are still an emerging as a business model in the US. This makes us fundamentally different and should drive both branding as well as new product innovation. The problem is that we have aligned our business model with that of traditional banking.
To answer your questions, credit unions must accept that they are a fundamentally different business model and look for solutions that embrace those differences. It was through the entrepreneurial spirit of the founding credit union leadership that we got to where we are today. It will take a similar entrepreneurial spirit to reposition credit union brand in a way that is significant and meaningful in the minds of consumers.
August 19th, 2009 at 1:57 pm
Thank you Rob for your thoughtful (and thought-provoking) comment.
October 19th, 2009 at 4:30 am
This might make sense if you were a bank but wouldn’t add campaigns that are targeted against banks be good for credit unions (if they can also simultaneously differentiate themselves from banks)?
March 3rd, 2010 at 10:18 am
We see a lot of marketing messages focused on ‘bashing’ because it’s easy. There’s always something negative a marketer can choose to highlight about their competition, especially in financial services.
Instead of bashing, which is often used to communicate value indirectly (by implying that you’re somehow the opposite of the company/characteristic being bashed) – I’d like to see more marketers take a stance, tell people what real value you bring to the table, and let consumers then make an educated choice.
But therein lays the problem: many marketers can’t tell you what unique value added or difference their institution brings to the table without bashing the competition.
March 3rd, 2010 at 11:20 am
“No, everybody else’s tobacco is poisonous, [your tobacco] is TOASTED.”
It kind of feels strange watching the WAMU commercials now.