There's an old British saying that where there's muck, there's brass. Right now the muck is the financial-services industry, and the brass is the massive opportunity in this $10 billion category for groundbreaking branding and marketing -- one that rivals the defining of the dot-com era. Financial services, once one of America's most admired and valuable industries, has lost its luster and international standing, creating a multibillion-dollar brand vacuum.
There was a saying in the '90s that one out of two consumers would change spouses during their lifetimes, but only one in six would change banks. It seemed consumers would simply hand over their money to a bank that promoted a few attractive services. Now banks have to make a case for why consumers should even consider them in the first place. That's what makes the category so exciting from a marketing standpoint.
This economic crisis heralds the dawn of a new era and promulgates a need to get back to basics. Financial-services companies should focus on four keys to success:
A clear idea and proposition
True values reach far beyond the function a product or service performs. Instead they are anchored in human emotions, concerns, aspirations and ambitions. If a company stands for something powerful, people will buy in. Financial-services companies must define the direction in which the industry needs to move and the challenges their brands need to overcome. They must redefine their meaning by looking under the hood and identifying what they really are, why they are in business and how that connects to what customers need. That will provide a blueprint for their future, their organizational style, and the direction they need to take with all brand actions and communications.
Take Grameen Bank, modestly launched three decades ago by Nobel Prize winner Muhammad Yunus. He had a clear idea of the bank's reason for being and how it would fulfill the needs of its customers, in this case poor borrowers. Grameen Bank takes the concept of subprime lending to an extreme, providing credit with no collateral. Yet while big banks found themselves in crisis due to subprime loans, Grameen Bank claims a recovery rate of more than 95%.
Some questions financial-services companies need to ask themselves: Will they engage in more "reciprocity" with customers? Will they let them in, reveal new strategies and admit mistakes in a clear and concise manner? Will they try to undertake initiatives that appear generous, that offer clear messaging and transparency? Will they suggest initiatives for customers to try -- ones that provide new insights? Will they offer customers the opportunity to actively participate?
The right kind of leadership
As Jim Collins writes, "All good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality." CMOs and others in leadership positions have to recognize that high performance takes humility. CMOs need to know their weaknesses and those of their companies and surround themselves with people who can shore up those weaknesses. These times call for leaders who can quell others' anxieties and foster collaboration and commitment across the entire enterprise.
|ABOUT THE AUTHOR|
Dean Crutchfield is a brand consultant. He was senior VP-marketing at Wolff Olins from 2002 to 2008. Previously, he worked at brand businesses including Landor, Michael Peters and Luxon Carra.
American Express broke ground when its CMO, John Hayes, decided to make the company the first partner of Product Red, launching the Red card in the U.K. in 2006. The effort was nearly done in when thousands of potential "conscientious consumers" were declined by the unwitting prohibitive rigidity of the application criteria. But that was overcome by the sheer scale of the fanfare and global media attention.
Recruiting and retaining talent
The integrity of a financial-services brand is compromised by fear, and anyone who espouses phrases such as "hiring freeze" and "natural attrition" should be fired. People are a brand's greatest asset, and financial-services companies should have continuous recruitment strategies in place -- including success planning -- that constantly search for new talent with new skills.
The U.K.'s First Direct (one of the very few HSBC sub-brands) is an excellent, profitable example of the nurturing of talent. The "telephone" bank hires people actively recommended by staff that fit the company's strong customer-service mind-set. Additionally, the company actively urges its employees to interact with colleagues to consider ways to improve customer service. Staff attrition is lower than the industry standard, sick days are minimal and the bank's call centers always rank highly in customer-satisfaction surveys. Its success at hiring and retaining the right talent has helped make First Direct the most recommended bank in the U.K. for the past 13 years.
The culture to deliver value
Culture is the engine that makes the business work. How do you separate value from commodity? There are two determinates of value creation in financial-services: how tightly the ship is run and the closeness of the company's relationship with the customer. The service-profit-chain model put forth by James Heskett, Earl Sasser and Leonard Schlesinger of Harvard Business School examines the relationship between organizational style, employee attitudes, customer satisfaction and sales performance in the retail-banking sector. Their assertion is that sales performance is linked not only to satisfied customers but to content employees, and that the two are mutually reinforcing.
The most effective brands are built from the inside out, by taking something that is already there and amplifying it, not by creating something new. A company's culture can communicate a unique position in the marketplace, so if you can't build a unique advantage over the competition on what you sell, make the advantage how you sell.
In this regard, Goldman Sachs remains unique. For all the industry's ills, Goldman Sachs is still recognized for the sense of rigor that defines its brand. Its lauded extraction from over-reliance on subprime lending months before the meltdown demonstrated its ability to make big decisions fast. Its sense of purpose and highly collaborative one-firm culture delivers a powerful advantage to its reputation, marketing and sales efforts.
As a bank holding company now, Goldman Sachs has a massive opportunity to redefine what a global financial brand can be. If it can maintain that strong culture and sense of purpose that so defines it, it can take the lead in its category.
All this cannot be achieved internally and communicated externally without the full force of marketing services: advertising, brand consulting, digital, direct marketing, innovation, internal change management, media, public relations and retail. The problem right now is as much a loss of consumer confidence in the financial system as anything else. Financial-services companies must combat the uncertainty with courageous new marketing strategies and solutions in order to win back consumers' respect, confidence and loyalty.
The best way to capitalize on this massive marketing opportunity is to appeal to today's consumers with an entirely new approach built around precisely targeted communications, flexibility in the products and services offered, and a reciprocal relationship with customers -- a two-way conversation about what you're going to do together. Those remaining in the game have the people, agency partners, locations, tools, data and information to do this. But they have to demonstrate, not just assert, that they can deliver it.