This morning I took part in a lively debate organised by the Financial Services Forum and their newly formed Brand Strategy group chaired by the inestimable Lucian Camp.
I shared the floor with Tim Pile who is CEO of Cogent Elliott and has a long and distinguished career in marketing including being CEO of Sainsburys Bank and the insightful Mike Hoban who is now running marketing for DirectGov and has had successful stints at Scottish Widows and Barclaycard.
We were each asked by Lucian to describe the essence of brand building in either Packaged goods (Tim took this on), Services (excluding financial services – Mike took this one) and Financial Services (this was mine).
My key point was that I believe many of the principles of brand building are common irrespective of category because essentially we are dealing with human psychology but that the context of these principles within financial services does make it "special and different".
Three context differences in financial services:
1. Financial services companies are hard wired around product and P&L analysis rather than brand and customer.
This means that the power within financial services companies almost always resides within commercial product owners rather than marketing. These leaders are trained in P&L, balance sheet risk, regulatory compliance, operational effectiveness not marketing, brand, experience and customer.
The very logic of brand building, positioning for strategic competitive advantage, customer segmentation, product development based on consumer need are all more difficult concepts in a financial services organisation. The result is an industry that in general creates me-too products which are overly complex, often game the consumer, provide a poor overall experience and are communicated in complex jargon.
2. Financial services are delivered through people. And people are much harder to manage than a shampoo formulation.
Certainly in most product categories especially the FMCG companies, brands are entities created to effectively penetrate the customer mind and form associations with product performance rather than being a set of associations about a group of people doing something. In most cases in FMCG companies the brand you are marketing is not the brand you work for. Given most financial services organisations have one or only a few brand the internal service and brand alignment challenge in these brands is core and material to their success. From the Indian call centre agent to the CEO in a financial organisation each needs to understand the brand and how it applies to their job.
3. Financial services products tend to be more risky and complex than many other types of products or services. They require much more effort from the consumer and the provider.
An irony of financial services businesses is that the organisation often believes they are the most commoditised of products. I used to be told all the time at Capital One – credit cards are a “low involvement” business. Consumers take a product and then want us to disappear into the background.
But having spent lots of time obsessing about how to make white gloop in a bottle exciting to consumers, I don’t think that financial services products are or should be low involvement – they have a massive impact on people’s lives and well being.
If they low involvement its probably because they are difficult and complex to communicate and understand. This combines with the terrible mess we are in from a regulatory perspective, defaulting to complete, unedited exposure of all information, to make it extremely difficult for the consumer to make an informed and empowered decision.
And finally (as Lucian called it the "Basini bombshell") I ended up questioning one of the core purposes of brand building:
4. Financial services brands – it's not about being different but about making a difference
The strategic goal of marketing in many businesses is to create a differentiated position in the market that gives you competitive advantage through cheaper cost of sales or price premium for example. Of the many principles that we could consider this is perhaps one of the most fundamental.
Actually I’m not sure this has been proven effective for the main stream brands in financial services. If we look at our banks for example. A highly consolidated and inert market with very little to split apart the businesses products, performance or promise. Certainly not enough to encourage mass switching to occur except maybe in those more liquid and more easily gamed products like credit cards.
In highly competitive and easily switched categories there is definite advantage to creating new ideas that better match and deliver against the consumer’s myriad needs. But the difference in financial services given their complex, impactful and long term nature is that aim shouldn’t be to create the new, new thing to gain share at the expense of customer loyalty but to focus on superior product reliability and partnership as a route to extracting competitive advantage and value. This is how our organisations and products can make a difference.
As marketers, we may not be in the right job to get to the CEO spot, we might be wired a little differently from the mainstream in our organisations but given our products are difficult and risky, and are built through human relationships and service, we have myriad opportunities to build great brands which have lasting value for our organisations and customers.
Lucian's blog on the session can be read here.
Here is my presentation as a slidecast:
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