In a world where innovation can be duplicated in an instant, convenience is defined by the ease of your mobile app, and all of your legacy advantages are being commoditized by technology, the only way to win will be to create brand differentiation. Brands like Amazon, Apple, Walt Disney, Starbucks and Nike are leaders in their categories because of the emotional attachment their brand has created over time.
The values the most admired brands promote and deliver are the principles consumers want to be associated with. None of these brands rely on product superiority, technology or marketing alone (although it helps). In many cases, their marketing doesn’t even promote a specific product. The marketing usually tells a story that resonates with the consumer.
“People buy according to how brands make them feel, or the identity they help them curate”
What story could your bank or credit union tell that would differentiate it from your competition? It can no longer be just about the number of branches you have, the hours you’re open, or the new checking account you have created. Those are table stakes in a war of equals. These features don’t create an emotional connection.
Tell Stories, Don’t Sell Products
Until recently, people opened banking accounts based on the location of the branch, the price of the products, or a recommendation from a friend or family member. Almost every financial institution had a similar array of products that worked the same way… and did the same things. There was very little differentiation.
Similarly, the beginning of shoes made of rubber saw only modest differentiation after their first introduction in the late 18th century. The US Rubber Company launched Keds in 1916, and Converse introduced its All Star shoe in the same year. Other brands, such as Adidas, Reebok, and Nike came later, with sneakers not becoming “fashion statements” until the 1950s. As technology improved and sneakers became more aspirational, prices skyrocketed.
Now is the time for the banking industry to stop selling products and start connecting with the consumer on an emotional level. Users of financial services are increasingly becoming emotional buyers. People are talking about the way Acorns helps them save, Rocket Mortgage saves them time, and how a new niche banking brand aligns with their values.
Now is the time for the banking industry to start connecting with the consumer on an emotional level.
We know that Apple stands for innovation, Disney stands for happiness, and Nike stands for amazing designs. What can your organization’s brand stand for?
It has been said that when people buy products, they buy them once. But, when people buy stories, they buy them again and again. If you can build stories around your institution’s brand, you can begin to build an emotional connection with the communities you serve and the customers who do business with you. This can build engagement – and eventually loyalty and market share.
Start by Building Trust
In the most recent Edelman Trust Barometer, trust in the banking sector was at its highest level since they started measuring it in 2012. Unfortunately, financial services remained the least-trusted sector measured by the Trust Barometer, at 57% of the general population. This creates a significant uphill battle just to get on a level playing field with organizations like Google, Amazon, PayPal or Apple.
At the same time, consumers say that trust in financial services is important to them. The sector ranked second in a list of industries in which trust is important to consumers – second only to health care companies. When asked what comprised trust in financial services, the importance of protecting customers’ data stands out amongst all categories as paramount to engendering trust and making purchase decisions.
Of all financial services firms, Visa, PayPal and Mastercard were rated as the top three in net trust ratings. Other payments companies in the top 10 were Google Pay (7), Credit Karma (8), American Express (9) and Discover (10). This highest-rated traditional bank was JPMorgan Chase (14). Trust is a foundation of building an emotional brand.
- Keeping Your Bank’s Brand Out of The ‘Cancel Culture’ Crosshairs
- How Financial Institutions Can Clean Up Sloppy Brand Habits
Create Repeat Buyers and Engagement
While the number of traditional banking firms has shrunk over the past decade, consumers have more brand choices as a result of both fintech firms and big tech brands entering the banking ecosystem. Digital technology and new partnerships have eliminated barriers to entry, but many of the newer brands still lack scale.
Success in the future of financial services, however, isn’t about how many new customers you can acquire. It is about the level of daily engagement you have with your existing customers, how deep the relationship can become, and how many of your customers become brand advocates.
No brand achieves these goals better than Nike. They understand their customers, they build an emotional connection and they rely on repeat purchases. As an example, while I only wear one pair of sneakers at a time, I own over ten pairs of Nike shoes of various color combinations and styles. I own a couple pairs of other brands, but I LOVE my Nike shoes.
To build engagement, banking firms need to understand their customers and connect with them on all channels.
To become the Nike of banking, financial institutions must understand their customers much better than they do today. Not only what they have done in the past, but what they will most likely do in the future. Banks and credit unions must extend their understanding beyond what the customer is doing with your brand. You must understand their actions and motivations with other brands.
For instance, when your customers received their government support checks at the beginning of Covid, where did money flow beyond your organization … Robinhood, Acorns, etc. What does the money flow look like on a monthly basis? That is your competition.
In addition, are you monitoring how customers talk about you on social media? You must engage with your customers if they are raving (or complaining) about your product on Twitter, Instagram, Facebook or TikTok. Build conversations around brand mentions, customer service inquiries, complements and complaints, even those beyond your own brand.
Be Authentic About Current Issues
Nike is known for being at the forefront of major social issues. The company’s decision to comment or engage on issues from social justice, to gender equity and even sustainability is part of the overarching brand strategy. “The simple mind-set is guided by what is good for our consumer, good for our athletes, good for our company,” stated Nike CEO Donahoe to the Wall Street Journal. If an issue doesn’t relate to the company’s core focus, Nike usually stays quiet.
More than ever, financial institutions must realize that current and potential customers are increasingly making decisions as to where to do business based on an organization’s position on issues that are important to them. As a result, banks and credit unions must be more proactive, and increasingly authentic on issues that impact a community. Remember, in today’s social economy, it’s not about what you say, it’s about what you do.
Build a Digital Brand
With the impact of traditional marketing communications decreasing, it is more important than ever to create marketing campaigns that reach customers in digital spaces like social media and search engines. But, how do you stand out from the competition? It begins with a clear, differentiated brand promise, that is supported by your brand value and customer experiences that are personalized and unique. Support for this will come from internal and external data and insights that generates buzz around your company, appeals to your customer base, and drives revenue.
More than ever, it is time to market experiences over products.
Ask these questions:
- What makes our organization different from our competitors? Dig deeper than “great service” or “caring people.” If there isn’t anything, determine you differentiation.
- How can we increase the level of engagement beyond transactions? This may include proactive advice and recommendations and customer stories that generate emotion.
- What experiences can be created that build an emotional connection that people will want to share?
- How do you communicate the differentiation across all digital and physical channels?
Once these questions are answered, it is imperative that your customers feel the emotions you discuss in your marketing campaigns at every touchpoint. It is just as important that your employees feel the same emotions within your organization. Authenticity requires an alignment within and outside the organization for emotional branding to be successful.