A research company studied brands in 75 different categories to measure the degree of differentiation among competing companies. Banks were among the companies studied.

Guess what? Banks are viewed as having zero differentiation. The good news is that banks weren’t the only undifferentiated category:

“Banks, motor oil and 20 other categories – nearly a third of all the categories examined – did not have any differentiated brands. The products and services were ‘known,’ but not known for anything in particular.”

For some reason, soap manufacturers have figured out something most financial institutions haven’t. The study found that 100% of soap brands differentiated themselves.

It makes sense. Look at the six brands of soap to the right. All six are distinct. Most people could probably articulate something different about each of them even if they don’t personally use those particular brands.

• Dial works longer.
• Lava is for tough guys with dirty hands.
• Dove is smoother, and for women.
• Zest opens your eyes.
• Neutrogena is pure, simple and clean.
• Irish Spring leaves you “Fresh and clean as a whistle.”

One reader of the study blames hollow bank slogans and endless mergers for the lack of differentiation among providers of financial services:

“Take the category of banks. They produce one meaningless slogan after another. ‘Where money lives,’ ‘Embracing ingenuity,’ ‘The clean Swiss bank,’ ‘Here today. Here tomorrow.’ Slogans like these and endless mergers have commoditized the category.”

Add to this the many similar-sounding names endemic to banks and credit unions — 1st, First, One, Community, etc. — and you’ve got another major contributor to financial “blanding.”

Bottom Line:

• If you don’t clearly stand for something — anything! — consumers will think you stand for nothing. This is a recurring theme in financial services.
• Failing to create meaningful differences forces people to define you by their own criteria — usually quantifiable things like rates, fees and the number of your branch/ATM locations.
• You absolutely must distinguish and differentiate your financial institution from the countless bland options that already exist or risk reduction to a simple commodity.

Key Questions: Can your organization succinctly articulate a clear, unique and meaningful brand promise or position? Do key stakeholders in your organization agree on this brand position?

Reality Check: Is there anyone else in your industry who could credibly make your Brand Promise? (Hint: If you said anything about “friendly, personal service,” or something like being “the best provider of financial solutions,” the answer is most definitely “yes.”)

Note: The original study is available offline from Brand Keys.

Virginia Financial Group and First National Bank just completed a merger. The two banks were similarly sized, and when there’s a merger of equals, one of three things happens:

1. The two banks mashup their names, like ‘Virginia National’ or ‘Virginia First.’ This is the most common route merged banks choose.
2. One of the two banks has such an obviously great name, or clearly has more brand equity than the other, so that name prevails. This isn’t that common though, mostly because few financial institutions have truly great names with any brand equity.
3. They start fresh with a new name. That’s what these guys did.

The merged banks will be called ‘StellarOne.’ The bank will be based in Christiansburg, Virginia, and will be the largest independent commercial bank headquartered in Virginia, with over 60 branches and total assets of more than $3 billion.

Name Distinctiveness:
The words “One” and “First” are the most familiar — and most overused — naming conventions in the financial industry. You can slap “One” or “First” in front or in back of just about any other word and whammo…you’ve got a serious-sounding financial name.

The ‘One’ naming device used in ‘StellarOne’ isn’t as rhetorical as it is in names like ‘Community One.’ You can at least use it in common language, as in “Which bank am I going to? The ’stellar one.’”

Name Meaning and Message:
‘StellarOne’ makes a brand promise. It may be a bit of a stretch to suggest a banking experience with them will be “stellar,” but it’s better that the name have some sort of story than no story at all (like ‘Virginia National’ or ‘Virginia First’).

There’s also a bit of an astral quality to the name. Pro? Con? You decide.

Trademark Status:
Virginia Financial Group filed for a trademark on ‘StellarOne’ back in October, 2007, so this name has clearly been in the works for some time prior to the official announcement.

There are 11 federally protected trademarks on file for the word “Stellar” in the U.S. Patent & Trademark Office’s financial services category. One is an insurance underwriter, another is a commercial lender in Ohio. None of the existing trademark holders looks to be particularly threatening to StellarOne, although you never know — someone just may decide to make a stink anyway.

New Logo: It’s a wordmark (type only), and sort of a crude one at that.

Overall Grade: B-
StellarOne is a “safe choice.” The name is a little different, which is good, but it’s not different enough to spark intrigue and really engage people. Names like WaMu and Wachovia trigger much more emotional reactions, and they are more fun to say.

Maybe ‘StellarSeven’ or ‘Stellar4’ would have been better?

Sources:

• FNB, Virginia Financial Group Have Identity Issues
• Virginia Financial Group and FNB Corporation Complete Merger