How To Tackle The Big Rebranding Challenges In Banking

How do you know if your financial institution's brand is helping or hurting? Is it contributing to external growth and internal cultural alignment, or not? If a misfiring brand is clearly holding you back, how do you fix it?

Have The Wheels Come Off Your Brand?

Many senior financial institution executives know they have an weak, stagnant or ineffective brand. For many, their brand has grown into an incohesive and complicated mess that no one can articulate, much less manage. Their market position isn’t unique, well-defined or relevant. They have no clear brand promise or personality. They can’t align their focus internally among staff in ways that create cultural energy and yield rich user experiences.

In this kind of environment, toxic corporate cancers like silos and conflicting KPI’s can bloom. This is also when many confess that the “wheels have come off” their brand.

There are many consequences of a weakened brand — all of them costly. Astute leaders often have an intrinsic sense that the cost of not having a clear, distinct and aligned organizational brand and culture is high. But how do you calculate it? What is the ROI of rebranding? What is the “Lost Opportunity Cost” (LOC) of a fractured brand? And what about the impact on your internal constituencies — staff, your board and stakeholders?

Three Ways a Weak Brand Hurts You

Weak brands can have hidden costs and affect all areas inside your organization. Symptoms include inferior earnings, limited growth and lost market share, frustrated staff, irritated customers, lower loyalty and higher rates of attrition.

1. Misaligned Cultures and Siloed Teams. Employees need to feel a sense of shared purpose. And in today’s competitive financial services environment, promising to provide “caring and friendly” is woefully inadequate. In particular, it isn’t going to engage and retain highly-principled and motivated Millennial employees who believe that culture is more important than compensation.

If you don’t define your brand’s core values and how they should translate into tangible, differentiated experiences, then there can be massive levels of internal discontent, frustration and lost organizational focus. The absence of a clear brand program, well-aligned values and actions, and a shared brand promise creates silos. Then, when employees aren’t aligned around common goals, morale suffers leading to costly higher staff turnover.

The economic cost of losing good talent, or even having disengaged employees is staggeringly high and well documented. HR organizations like the Society for HR Management and the Center for American Progress estimate the cost of staff turnover can range from a low of 60% of an employee’s salary for lower skilled workers up to 400% for highly-trained staff. A study by Columbia University found that rich company cultures experienced 13.9% average employee turnover, vs. poor cultures that averages 48.4% turnover. So you can imagine the financial impact to your bottom line ROI of lowering staff attrition by even 10%.

2. Stagnant Growth in Net New Relationships. Slow net growth is not just about new inbound relationships. It can also affected by attrition, churn rates that average 15% across the U.S. banking industry and 20-25% for first-year bank customers. The higher your attrition rates, the more expensive it becomes to achieve your growth goals, especially the industry averages around $200 per new customer.

The lack of an appealing and relevant brand strategy geared towards well-defined future target audiences is often the cause of low organic growth rates. A weak brand won’t appeal to new prospects, and can result in higher attrition rates — a doubly whammy. Fewer referrals and poor word-of-mouth marketing compound the effect of a weak brand.

3. Languid Growth in Wallet Share. An ill-defined strategy with inconsistent brand experiences will produce stagnant wallet share trends that can be quantified using data analytics — a combination of low existing overall product penetration rates, low services-per-household, poor onboarding and cross-selling metrics, as well as below-average NPS scores. These are all indicators that can be used to gauge the health of your brand, and whether the brand is helping generate leads and deepening relationships.

Strong Brands Generate Strong Sales, Not The Other Way Around

“People don’t buy what you do. They buy the difference you make in their lives.”
— Simon Sinek

To try and overcome these challenges, many financial institutions have embarked on quests to build a “sales culture.” That’s only modestly effective, and only treats the symptoms — a bandaid solution that ignores the real problem. Ultimately the underlying root cause needs to be addressed; the organization needs to build a solid brand strategy, clearly define its culture and values, engage staff actions, and define on-brand behaviors for employees, so they know what kind of experiences you expect them to deliver.

In light of Wells Fargo’s massive cross-selling scandal involving millions of fraudulent accounts, consumers and banking providers alike have never been more sensitive to sales culture and incentives. In today’s environment, a sales culture is not the best path to increasing wallet share, ROI and deepening consumer relationships.

Instead, a shared focus around your brand promise, your purpose, earning consumer trust, and effective needs-identification using savvy behavior-based analytics and relevant staff questions should be used to drive higher levels of engagement. That’s where the true value of focusing your organization and staff around your brand and the alignment of your people should lie.

Bringing value, relevant help, a shared focus, savvy tools and a common brand language to your employees first: so they can pass it on to your members via rich, well aligned brand experiences. Building a brand driven organization takes focus, commitment and purpose.

Transforming a Broken Banking Brand Goes Beyond ‘Great Service’

A rebranding project with any value goes well beyond new marketing designs. It does not start or end with a surface-level review of your ‘look and feel’ or logo.

The good news is that there is a process for how to articulate and uncover the state of your brand, and then get to work transforming your organization to a fresh new vision of brand focus, organizational alignment and sustainable growth.

Tackling your branding challenges should always start with a strategic assessment of your situation. After all, you can’t fix what you don’t know is broken. Uncovering the root of your branding problems requires a level of unbiased openness and a willingness to be brutally honest while looking in the mirror. Putting up blinders or living in denial will simply dull and delay your progress.

Your internal brand audit should encompass everything, from internally held perceptions of your brand (both among staff vs. management vs. the board), your core values, mission statement, vision statement, operational roadblocks, brand identity, your marketing messages, and a candid assessment of the user experiences you deliver across every channel.

Ultimately you need to tease out what — if anything — sets your organization apart (hint: it’s not your “superior and friendly service”). Virtually every bank and credit union in the financial industry today believes it is their “world class service” that sets them apart. It’s a vague and nebulous brand promise — a cop out that’s nearly impossible to define, standardize and quantify.

Web, tablet and mobile banking apps, together with fintech disruptions like Venmo, have driven fast rising expectations that have redefined the playing field of how consumers (particularly Millennials) define “service.” In banking, service today is no longer based on the “friendly” branch teller interactions that once defined the relationship between consumers and their primary financial institution.

Building The Brand From The Inside Out

Just like your personal health, the health of your brand is something that can only be improved from the inside out. It starts by first building engagement and consensus among internal stakeholders. You need to tease out the range of varying perceptions, beliefs and opinions that your staff, board, management and senior leadership team holds about your brand and your culture.

By engaging all your stakeholders right from the start, you’re sending the right message: people’s opinions and ideas matter. This is particularly true for frontline staff, who know what’s working, what isn’t, and have more experience delivering exceptional experiences on a day to day basis than senior leaders. They are your eyes and ears. Their firsthand experiences based on thousands of interactions are a veritable treasure trove of insight that will guide your branding process — the most valuable research you can find. Besides, your people deserve to have a stake in the ownership of the brand. You’ll find you generate significantly more employee engagement with your rebranding efforts when you give staff a voice in the process. Invite them to help define the brand’s direction, and suggest needed improvements. You’ll be pleasantly surprised by how intensely they crave opportunities to improve your brand.

Gaining your team’s buy in right from the start is often what separates a successful rebranding project from those that fail. Any hope for meaningful “grass roots” involvement among staff will be predicated on the early engagement of your troops. This is the only way to achieve positive transformational changes to your culture, values and delivering a fresh new brand experience. This is why most rebranding project that dwell primarily on cosmetics like logo changes wind up as little more than expensive exercises in design — they fail(ed) to engage internal constituencies in any meaningful way. If you ignore this mission-critical process and end up with a “top-down” process, your rebranding project is almost certainly doomed.

Once internal perceptions are captured (and contrasted), they can be tested with brand research among external audiences — e.g., customers/members, prospects, the general public, small business owners, young professionals or mature Millennial segments. This step can help you refine and affirm elements of your new brand strategy, while also identifying and correcting any flawed internal assumptions.

It’s vital that you pinpoint critical weaknesses in your strategy — the “brand gaps” between where you are today and where you need to be tomorrow. This process will provide you with a road map to transforming your brand to a new level of health and focus, both internally among staff and externally to consumers.

Remember, the rebranding process takes a willingness to expose and quantify the specific areas where you are underperforming against consumer expectations. It takes a willingness to tackle not only the symptoms, but underlying organizational roadblocks that thwart growth, brand alignment and a shared sense of focus.

The lack of a clearly articulated brand doesn’t always mean a financial institution will experience stunted growth. However, a well-articulated strategy powered by a unified team of people who are engaged and committed to building a bold new brand together will not only create a renewed sense of energy and inspiration internally, it almost always yields a big return on the bottom line.

Mark Weber is the CEO of Strum, a Seattle-WA based brand-consulting, business intelligence and digital marketing agency with offices in Seattle and Atlanta. Strum has provided business growth strategies, consulting, brand user experience design and digital content development for some of North America’s largest credit unions, tech companies and community banks.

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