Your brand is the only way to create preference for your financial institution. It’s not your product or service benefits. Your competitors have the same offerings. And even when there are differences they are so thin that consumers can’t tell between them. (Or even care.)
Further, competing on location is chasing fool’s gold in banking these days, when about 65% of U.S. consumers regularly bank online, according to Statista, a figure that is only going to increase.
No, only your brand can create preference enough to add customers and keep current ones loyal. Your audiences need to see you as such a powerful self-reflection of themselves they are incapable of choosing anyone else.
Otherwise, you lose customers to the market leaders, who become the default choice when all things are equal.
There is really only one way to create a persuasive financial brand. Tap into the emotional beliefs of your target audience.
Research will uncover the emotional beliefs of your existing or target audience. Once you know that, align your brand and everything else you do with the most intensive beliefs.
Few companies actually do that well. But if your bank or credit union is considering a rebrand — or even a brand refresh — there are four pitfalls most institutions fall into that keep them from being persuasive. I describe each below, along with how to avoid them.
Pitfall #1: Relying Too Much on Usage and Attitudes in Research
Most financial institutions and their marketing partners only dig into market research superficially. They look for usage and attitudes, which do have some value. But generally they are useless when building a powerful brand.
Where your target audiences bank defines the market share. And you already know how they bank and even what they want. There’s countless secondary data for that.
In fact, let me demonstrate this pitfall from another product category. Beer. When starting a brand project with a national brewery, I sat down with the leaders to examine their previous research.
One question always asked in the research: Why do you drink the brand of beer that you prefer?
What do you think the answer to that was? The taste. Of course! No one prefers a beer they think tastes bad. “Oh, this is terrible. Let me have another.”
Instead, test who your prospective and current customers aspire to become. What do they value most? What truths about the world and themselves do they believe?
( Read More: 7 Advertising & Marketing Trends in Banking for 2021 )
I’ll get back to these precepts below, when I provide an example how to leverage an emotionally intensive belief for a financial institution brand.
But while we’re looking at target audiences…
Pitfall #2: Segmenting By Demographics Only
Demographics can be useful. I’m not suggesting you ignore them. What I am telling you is that segmenting by demographic data is generally unhelpful.
For one thing, you’ll find that there are more similarities between demographic groups than differences. So if you’re picking among the differences, they are usually small and you’re really just stretching.
Credit Unions especially fall into this trap. Then they wonder why opening up their membership guidelines doesn’t bring them more business.
No, the best way to segment your target audience is by segmenting by emotional triggers.
Here’s the example I was referring to earlier:
A bank in California needed to become more important to its target audience (those of a particular ethnic group) because they were losing customers to the larger banks. Basically, the bank was looking irrelevant to an audience you’d think it would easily capture.
Instead of segmenting target audiences by demographics, segment by emotional beliefs.
So, in the research, we found the single most powerful belief among a large section of its target audience: That they believe their own experience drives their choices.
Experience as an student at Berkeley? Yes. Working in Silicon Valley? You bet. Their own life experience drives what they do. Especially as a person of their ethnicity.
When we segmented by that emotional belief guess what we found? That those who believed that precept most intensely were more likely to add an account, be attracted to the services the bank offered and own greater financial wealth than the rest.
That’s an audiences segmentation. So the brand aligned with that precept by rewarding them for making the best choices based on their experience.
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Pitfall #3: Afraid to Slay Sacred Marketing Cows
As humans, we all have our sacred cows. In brand building, many people in your institution will demand that no name or color should be changed. Or that how the branches are laid out must be left alone.
By holding onto these sacred cows, you limit your opportunity. Put everything on the table. That doesn’t mean you’ll change everything. It just means everything is considered. If your name has meaningful brand equity, for example, then it shouldn’t be changed. But don’t just assume you have it. Let your target audiences tell you that through the research.
In reality, though, most sacred cows come down to branding and marketing cliches. Financial institutions have become famous for loading their marketing and branding with cliches and overused industry terms.
Be honest. How many of you promote your friendly employees and expertise? If you do, it’s not a reason for someone to switch institutions. It only becomes a differentiator if audiences believe all other banks have nasty employees and lousy expertise.
How many of you tout that you’re local? Consider this: Even Wells Fargo and Bank of America employ local people. In the minds of consumers, those folks are local too.
The biggest cliché in bank branding is the theme of “success.” Just about everybody uses it in some form. “Achieve success.” “Live life.” “Move forward.” And on and on.
As humans, we tend to think in a bubble. That’s also true of just about any company or brand. If we’re successful, we come to love ourselves. But what we love about ourselves may not be what others like about us.
Pitfall #4: Making the Brand About You
Too many brands (not just in banking) think brand is a definition of the company or product. That’s inside-out thinking that ensures you’ll be ignored.
You fulfill a brand promise, yes. But your customers define the brand. Here’s what I mean:
Nike’s “Just Do It” is about the customer. Not about Nike. It doesn’t promote the benefits of its products. It promotes who you are when you wear Nikes. You’re done with all the nonsense and just get it done. Nike users are winners.
Examine everything in your marketing to ensure it’s about the customer and not you. If you do that, you’ll find your institution will be of more interest to those who are currently not choosing you.
Building a persuasive brand is hard work. That’s why so few do it well. It’s not the process that’s difficult. It’s getting out of our own way that’s hard. Put aside your assumptions. Undertake the process with an open mind.