These are excerpts from an interview given by Jeffry Pilcher, publisher of The Financial Brand. While the interview specifically dealt with credit unions, there are plenty of insights and advice here relevant to any financial institution. Here is the full transcript of that interview:
What are some of the most common mistakes
financial insitutions make with their branding?
The most common branding mistake organizations make is obsessing over the brand’s visual identity. The look-and-feel of an organization is only one small part of an overall brand. It’s just the tip of the iceberg. Or, to put it another way, “The clothes don’t make the man.”
Perhaps the biggest branding mistake credit unions make is to follow in the footsteps of their bank peers. As credit unions add more and more services, expand their charters and extend their geographic reach, they tend to water-down their value proposition.
In the early days of credit unions, their charters unwittingly helped them build their brands. They were forced — by law — to have a focus. They were focused on a specific type of member in a limited geographic area. This gave their brands clarity and purpose. But as they grow, they tend to migrate towards the middle, essentially trying to be “all things to all people.” Many financial institutions define their target audience as “men and women ages 18-55.” That doesn’t cut it. You’ve got to be more specific and get as narrowly focused as possible. Branding is about focus. Focus, focus, focus.
And here’s a big branding mistake financial institutions make: assuming that it’s their “service” that differentiates them. When I ask a financial institution what differentiates them, 9 times out of 10 they’ll say, “It’s our service.” If everyone is saying the same thing, then (1) it isn’t helping differentiate anyone, and (2) in all likelihood, many of them are lying. Even if your service IS what differentiates you, you need to drill down and get more specific. HOW is your service any different? Are you faster? More easier? More flexible?
What do financial institutions need to understand about branding?
A brand is a promise. It is your reputation. Inasmuch, financial institutions need to understand that everything they do, say and sell affects- and builds their image. A brand involves a lot more than a name, logo or slogan. Every interaction someone has with every aspect of your organization is important. You’re either maximizing these opportunities to build the brand…or not. All the details matter.
How much time and money is involved in creating a brand strategy?
There are a lot of ad agencies and design studios out there selling “branding,” but what many of them are really offering is a design-centered solution. They may charge anywhere from a few thousand dollars all the way up to $40,000 or more. But if all you’re getting is a new look-and-feel and you haven’t really addressed the brand strategy — the organization’s core DNA — you’ll be selling yourself short.
You could build your own brand strategy, but the do-it-yourself approach can be hard. The learning curve is pretty steep, and it can take a lot of time. It’s like remodeling your home. If you don’t have any prior experience, you may make some mistakes, and you might not be thrilled with the outcome.
Also, when you go it alone, you may reach some conclusions that are fairly common and cliché. Hiring someone with prior experience who can really help you dodge the pitfalls is probably worth the money. These projects require a deep understanding of every aspect of a financial institution’s culture, products, staff, members, competitors, marketing, etc., so it can take over 100 hours just for an outside partner to get through the discovery phase.
There are branding firms out there who say they can deliver a brand strategy in a day. That’s total bullshit. Any firm who claims to be able to create a brand strategy quickly is probably trying to rush the project so they can move swiftly into the design phase (presumably the firm’s strength and profit center). It takes time to think things through, weigh all the variables, pull everyone together a few times and sort it all out. Most branding projects should take a couple months. Some Fortune 500 companies have spent a year or more. It isn’t an easy, quick or comfortable process. It takes time, it can be scary, and it often hurts like a good workout.
Any tips to help credit unions identify what sets them apart?
It’s not about the member-owned, not-for-profit stuff you hear all the time. It’s not that this stuff isn’t important. It’s just that these messages don’t differentiate one credit union from another; they only define the differences between all credit unions (as an industry) and other types of financial institutions. Also, these principles don’t drive business for a significant portion of the population. People appreciate the principles as a benefit, but rates, fees and service will are way bigger priorities.
Nevertheless, the “credit union philosophy” is a common trap credit unions fall into. They start to believe that “the credit union difference” is what makes them different. Even ad agencies and branding firms can fall into this trap if they’ve never worked with a credit union before. The fundamental principles driving credit unions can be fairly romantic. It’s easy for neophytes to fall in love with credit union ideology, but it’s problematic when any specific credit union’s brand is built exclusively around these principles. You’ve got to figure out what makes your credit union different from all the other credit unions — especially those that you are directly competing with.
You have identified what makes you different. Now what?
How do you decide what to ignore and what to emphasize?
The problem with a lot of branding projects is that they can tend to gravitate towards safe, feel-good clichés. Everyone loves terms like “value,” “quality” and “service,” but what do these terms really mean? There is such a wide range of interpretations that anyone can find something in them they like.
Other words you’ll hear often include personality traits like “caring,” “responsive” and “personal,” etc. If another financial institution could make the same claim, then it isn’t what differentiates your brand. And the reality is that there are hundreds — if not thousands — of banks, credit unions, investment firms and insurance companies out there saying the same exact things. If everyone says this kind of stuff, how differentiated can it possibly be?
It’s the same problem with mission statements, and why everyone’s reads exactly the same: “Our mission is to be the premier provider of quality financial solutions by earning people’s trust in the most friendly and professional manner possible.” Scratch out the common clichés and what are you left with? Not much.
This is what makes branding really hard. If it was easy, everyone would be doing it (or doing it well).
Who should be involved in the branding process?
Internally, the entire senior management team should be on the brand development team. Branding is not the marketing department’s job. It’s everyone’s job. In fact, HR and Operations have as much responsibility as Marketing, if not more. Effective branding pervades every corner of your organization, so each department needs to be involved from start to finish.
You also need to involve the staff. If they don’t know what a brand is or what your brand stands for, you’re going to have big problems living up to your brand promise. They need to feel engaged and have a sense of ownership in the brand. That only comes from involving staff in the process, and doing so at various junctures all along the way, not just at the tail end. It’s especially important to identify and involve those employees who are passionate about the organization. You’ll need them on-board as you roll various stages of the brand out.
The board of directors should be aware of what’s going on, but it isn’t critical to include board members in your brand development team.
Externally, there are all kinds of ways to involve members and non-members in your branding process. You could have focus groups at almost any step along the way. And there’s theoretically no limit to the amount of research you could do. Time and money are the only constraints.
If your management team is open to the idea, you could include a few members on your brand development team.
What do financial institutions need to do
to make their brand recognizable?
At the very least, it should look different. Even if you can’t figure out what differentiates you at the basic DNA level, you should make sure you don’t look like everyone else. A good place to start is to get rid of any pictures of shiny, happy people in your marketing materials. I’ve got drawers full of brochures from banks across North America that are brimming with lifestyle photos. Avoid these like the plague and you’re well on your way to creating a distinct brand identity.
When people can’t see any visible differences between you and the competition, they only thing they’ll use to compare you by is rates.
What does the current state of the economy mean
for credit unions and their branding efforts?
Current market conditions are creating an optimal environment for credit unions to flourish.
Now is not the time to cut your marketing budget (as reflexive as that may feel). First of all, as the economy gets tougher, you need to ramp up your spending just to stay where you’re at. Second, it’s easier to “cut through the clutter” when there’s less clutter. But most importantly, times have never been more ripe for credit unions to pick up new members, so you need to get out there and tell your story now — immediately.
It’s certainly important to let people know you’re safe, strong, secure, stable and sound, but that’s not the only message you want to send. All financial institutions should be out there with that message in some form or another. You still need to grow new accounts, fund new loans, etc., all while differentiating your brand, and a straight “safe and sound” message isn’t going to do all that for you.
What’s your best advice to financial institutions
with regards to their branding efforts?
1. Put “brand” on your meeting agenda and leave it there. Management teams across America need to talk about their brands more regularly — certainly more than once a year, but few even it that often. They put topics like “Lending,” “Member Growth” and the “Annual Meeting” on their agendas, but they almost never talk about their brands. Branding should be a subject discussed among a financial institution’s senior leadership team at least once a month.
2. Give brand-building an annual budget. Branding is not just the marketing department’s job. Inasmuch, financial institutions should establish a separate budget for brand-building efforts. Unfortunately, money for any kind of “branding” activities usually gets siphoned out of the marketing budget. A branding budget should be supplemental to the marketing budget. Of course, marketing and branding budgets are the first to get slashed when times get tough. And once they’re cut, it takes forever to fully restore them.
Think about it. If you aren’t talking about it, you aren’t meeting about it, and if it doesn’t have a budget, then is it really an important part of your business strategy?