Lenders’ brand strategies may have to be adjusted to take account of the changing way the financial world is perceived by consumers, says Jeff Knight, managing director of Tonic Marketing Solutions
With Abbey and Bradford & Bingley coming under the Santander brand it got me thinking about the word brand, which is one of the most overused and misused terms in business.
Having a strong brand is vital for lenders because of the correlation between it and profit. But looking from the outside into the mortgage sector rather than being in it as I used to be, I don’t see many strong brands around.
The lack of strong brands is not good for a sector that is trying hard to regain trust among brokers, consumers, the financial markets and politicians. It also leaves lenders exposed to new market entrants.
It’s as though everyone has run for cover, keeping their heads down and focussing on short-term promotional activity. This is dangerous.
The winners in the long run will be companies that are brave and invest in their brands now. OK, others might argue that the winners will be those with the money to lend but a strong brand will attract the right funding.
Before I explain how to build a strong brand I want to get something off my chest – I don’t see enough adverting by lenders. I know everyone has shifted their focus to activities that are easier to measure but something being easy to measure does not make it right.
Advertising must remain an integral part of the mix. But while some lenders are advertising, which is great, they are producing rate-led adverts. There are many ways to publicise your mortgage rates but doing so through advertising directed at consumers or brokers is an inefficient use of budget.
Instead, use advertising to build a brand and make a lasting connection, not a whimsical one that could damage your brand equity.
Your brand is not just your logo but everything you do and say. It is about personality and character, and it shapes your reputation. Brand personality attracts customers and brand character retains them.
Of course, this is easier said than done and there is often a disconnect between what companies say and what they do.
Trust in financial services companies has been eroded. Research has shown that consumers blame the financial sector for the recession and they don’t discriminate much between organisations. One way to regain trust is to build a strong brand.
It’s also a way to stand out from the crowd – vital for generating sales. And it’s a way to connect with intermediaries, consumers and other important stakeholders.
A strong brand will attract new customers and retain the ones you have. And because it does not rely on price to compete it can command greater profits.
So building a brand is vital and I have identified four steps to help.
Step one – define your brand
You must have a clear brand proposition that is understood by everyone, both internally and externally. To make this happen it is good communication that matters rather than the size of the organisation. Ask people in your company from all departments and levels how they would define your brand. You will get different responses so the first thing is to resolve these.
Brands are built from within so you need to define your brand in a way that everyone internally can easily understand and convey. You need to get to a point at which you can define your brand in a few words or even just one – the narrower the focus, the stronger the brand.
Of course, this does not mean that a narrow product range is required, as O2 has demonstrated recently by its entry into other markets including financial services.
You may require a rebrand so you might have to go back to basics and establish what sets you apart. I’m sure Santander will have done just that.
Step two – engage your employees
It’s not enough to tick a few boxes and send emails with a brand definition and mission statement. You need to communicate in a way that engages, not just informs. This process must be driven from the top to be believed in.
As experiences of a brand are formed by interaction with the firm’s employees, if they are not engaged they can do serious damage to your brand and your profits.
Step three – connect with customers
The first rule here is to ensure you underpromise and overdeliver. You must then connect with customers at an emotional level, so do you know what those emotional triggers are?
The market has changed so how do brokers and consumers really feel about your brand? You need to find out because the more you understand, the easier it will be to connect.
Relationships can help in this regard which is why customer service is so important. This must clearly reflect what your brand stands for. Too often a disconnect leads to dissatisfaction and lost customers.
You need to communicate your brand message clearly and consistently but too often messages are complicated and variable – I mentioned rate-led advertising earlier and just think how variable that message is.
Step four – measure
There are many ways to do this. Undertaking a customer satisfaction survey is a great way to help build a brand.
Another tip is to tap into the cyber world. It used to be said that a satisfied customer told a couple of other potential clients while a dissatisfied one told a dozen. Now, a dissatisfied customer can tell thousands.
Make sure you know what is being said on social networking websites and do something about negative feelings.