Wall Street's Angst Is Now Main Street's

Financial-Services Brands Must Regain Value and Build Trust Not Only in the Business Community but Also With Consumers Amid Banks' Implosion

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Jez Frampton
Jez Frampton
Take a careful look at the brands that have been in the headlines in the past week. Some of these brands are what we'd call "Wall Street" brands. Others could be defined loosely as "Main Street" brands.

It is just as it sounds: Wall Street brands position themselves to the investment community, while Main Street brands position themselves to the consumer. Lehman Brothers is, or should I say was, a Wall Street brand. Bank of America, on the other hand, is a Main Street brand. And there are some within the financial-services sector that are both Wall Street and Main Street -- such as Merrill Lynch -- which for business, service or reputation reasons, manage to cross boundaries into the general consciousness.

When the going gets tough, no one really cares about Wall Street brands -- not even Wall Street. Think of Bear Stearns, Paine Webber and Dean Witter. All have died, and while it concerned the immediate financial community and maybe even the business community, no one on Main Street cared that much.

Meanwhile, on Main Street, your everyday financial-services consumer is just beginning to understand the extent of the troubles that have been developing in the sector in the past year. Consumers are asking tough questions, confidence is in decline and the two streets are merging in order to avoid further failure. Wall Street's angst is now Main Street's angst, as evident in the dramatic swings of the Dow Jones Industrial Average. Investor confidence is at an all-time low, and the news and economic analyses, not to mention respected figures such as George Soros, only seem to perpetuate fears, forecasting that the worst is yet to come. It is now obvious to everyone on Main Street that financial brands are in trouble -- and may have been in trouble for some time now.

'Masterbrand' perils
So what is it that's fundamentally wrong with financial-services brands? Why are brands such as Lehman Brothers and AIG caving so disastrously, rather than being immune to these crises?

Certainly one of the factors that has accelerated the problem relates to the common use of a "masterbrand" strategy: From Bank of America to Merrill Lynch to Citigroup to AIG, we can see all of a brand's business units tied together under one asset, the corporate brand. This approach can be a double-edged sword. While in the good times everyone appears to benefit, in bad times any negative impacts will be felt across the board. A bad day in investment banking can alarm the consumer, if you follow my drift.

ABOUT THE AUTHOR
Jez Frampton is global CEO of Interbrand Group. He leads the global interbrand network, shaping strategy and growth for the network of 34 offices in more than 22 countries.
Branding isn't simply a case of slapping a logo on a business. It's about understanding the revenue flows, the risks, the role of the brand, its competitive strength, and its relationship with staff and consumers across multiple business segments. In short, it's understanding the intangible asset and leveraging it to best create value for the business.

If I were a financial-services CMO, these are the big questions I would be asking myself and my team. The evidence we've seen from our brand valuations around the globe certainly suggest there is plenty of room for improvement in leveraging the role of the brand in consumers' decision-making, both on Wall Street and on Main Street.

While this has to be the starting point when Wall Street and Main Street merge, as with Bank of America and Merrill Lynch, the big question facing Bank of America right now must be where to take the Merrill Lynch business and brand. In order to make that decision, they must first understand the role of the Merrill Lynch brand and its ultimate brand value.

Future value
Brands drive decisions and demand, and clarity on these points must be the starting point for any new strategy for Merrill Lynch within the Bank of America portfolio. Once that's understood, we can view the brand in isolation from the business, remove the parts of Merrill Lynch that are clearly broken and begin to rebuild. There's still value there -- at least $50 billion worth, and $11.4 billion of that was brand value at the time Interbrand created the 2008 Best Global Brands ranking. Although one may argue that maintaining that figure is a little optimistic, we must remember that Merrill Lynch still has considerable future value.

AIG, not unlike Merrill Lynch, is a huge Wall Street brand but has strong consumer presence and tremendous Main Street trust established by businesses such as AIG Auto and others. AIG needs to be extremely careful not to lose the trust of its consumers. In this case, actively reassuring Main Street despite the Wall Street turmoil is critical.

Although it may not seem like it on the surface, a challenging economy is an opportunity for brands to create and secure value. In difficult times, customers increasingly rely on brands for their decision making. The second part of the equation is brand strength, which will depend on how brand managers respond to the new market conditions.

Finally, the big question for CEOs and CMOs will be what to do next. First of all, never panic. Brands are built over the long term but can quickly collapse in the short term. What we're watching unfold on the nightly news could easily cause CEOs and CMOs to feel that something about the brand needs to change immediately -- perhaps because of a sense of helplessness or even just as an attempt to show the world you're doing something. Regardless of motive, it is certain to be a bad move.

Remember: Brands and brand value take time to build. The strategy needs to stay consistent, but the tactics need to address the short-term issues.

Taking the next step

Financial-services CEOs and CMOs, don't panic and assume your brand needs to change immediately. Instead, follow these three simple rules.
  1. Remember to be diligent about communicating to your constituencies on Main Street, as they have a different perception of your business than those on Wall Street.


  2. Understand, based on facts, the role your brand plays in driving consumer choice and purchase, the strength of your brand to secure revenue in the future and its ultimate value to shareholders.


  3. Determine tactics that help you in the short term without compromising your strategy in the long term. Chances are you won't go under and the economy will get better, so you need to be well-positioned to compete.
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