It will likely be a while prior to the public forgives–or at least forgets–but biggest, best banks should consider re-inventing their brands to speed the procedure along. (In the end, if Britney Spears can recover her career in a couple years, you will want to them?)
That is where a makeover expert like Jeff Stephens will come in. He’s the CEO of multisensory marketing firm Creative Brand Communications and word-of-mouth marketing agency PSST!, focused on serving finance institutions and helping them increase both customer base and retention. During the last couple of years, he’s helped numerous clients with assets which range from $75 million to $6 billion, and I asked him for a perspective on the financial meltdown, from a branding point-of-view.
Branding a bank, Stephens says, isn’t quite exactly like branding other businesses, because people feel differently about their money than they do about, say, groceries. But there are always methods to create an emotional reference to customers.
He explains that so as to create a strong brand, banks have to understand that actions speak louder than words. Some banks can tell the story of what they are a symbol of, they rarely put enough effort into driving the idea home. "If a brand is visual, then the degree of engagement is cosmetic; but banks with a solid brand will put a stake in the bottom and base all decisions onto it. They’ll say, ‘If you value what we value … then we ought to conduct business together, and if not, that’s OK, because we need not be everything to everybody.’"
That is where big national banks failed: Their brands were diluted within their quest to be highly relevant to everybody. "It’s hard to tell what truly differentiates a Bank of America from a Wells Fargo," Stephens says. Moreover, since it’s become clear that banking products are virtually the same everywhere, consumers really decide where you can invest their money predicated on what brand resonates with them the most.
"Many of these things are easier in theory," Stephens admits, but as the financial services industry is critically highly relevant to the economy, he thinks big banks have a fairly good shot at re-branding themselves and engendering trust–if they choose to take action.
Since it stands, banks aren’t doing this hot. The question of trust served as impetus for a fresh indicator that premiered towards the end of January: the Chicago Booth/Kellogg School Financial Trust Index, billed as a quarterly way of measuring the public’s confidence in areas where they are able to invest their money.
On a scale of just one 1 (completely untrustworthy) to 5 (totally trustworthy), the categories scored the following:
- OTHER FOLKS 3.33
- Banks 2.95
- Bankers 2.60
- Government 2.37
- Corporations 2.22
- CURRENCY MARKETS 2.13
Given that rely upon financial institutions is indeed low, it appears the most practical plan of action is to determine ways to get credible referrals. "People have to hear from other folks to make changes. If you’re likely to switch banks, you’ll switch predicated on an individual recommendation from somebody, rather than a brochure from the lender itself," Stephens asserts.
As your final note, despite the fact that some companies likely deserved their comeuppance, not absolutely all financial institutions ought to be devote the same boat. For others, the largest influence of the crisis was not from their loan portfolios, but instead a guilty-by-association label. Actually, says Stephens, most community and regional banks see this as a chance to capture some attrition from bigger companies whose customers have already been displaced. For more on that, see Mike Werling’s blog on what community banks are weathering the crisis and Dennis Romero’s story on what smaller institutions remain lending to entrepreneurs.
And if all of this does not swing public opinion in banks’ favor, possibly the only thing left to accomplish is close our eyes and chant together: "Bankers are people, too."