Branding Banks For Shareholder Value 4.0 Why Brand Banks

Branding Banks for shareholder value Discussion Draft Section 3.0

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© Geoffrey Johns 21 April 2010

Branding banks for

shareholder value

Section 4.0

Why brand banks?

Planned series of papers

Discussion Draft

Order.Version

Release Date

Creating shareholder value - an outline 1.0 Mar-10

Knowing customers 2.0 Mar-10

How customer perceptions develop 3.0 Apr-10

Why brand banks? 4.0 Apr-10

Branding banks is hard 5.0 TBA

Measuring customer perceptions 6.0 TBA

Measuring customer value 7.0 TBA

Gaps analysis 8.0 TBA

Bank structure and brand control 9.0 TBA

Process level brand control 10.0 TBA

The brand story 11.0 TBA

Communicating bank brands 12.0 TBA

Valuing bank brands 13.0 TBA

The future of banking 14.0 TBA

Competitive bank branding strategies 15.0 TBA

Anyone following this series of papers may notice that this contents page changes about

a bit. This is because I keep thinking of new bits I have to cover.


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Introduction

This is the fourth in series of discussion drafts in which I attempt to trace the path from

customer perceptions to shareholder value. The first covers shareholder value as a goal

of the system and the analysis framework I use. The second is about knowing

customers through segmenting on key characteristics. The third deals with how

customer perceptions of banks are developed. This section deals with what sorts of

advantages a bank can hope to get through good management of its brand. We shall

see in the next section that branding banks is at the extreme end of difficulty among the

spectrum of all brands. Indeed it is pertinent to ask, why invest heavily in branding at

all? And, are there banks that don‟t bother too much to do so?

This isn‟t a good time to be writing about branding banks. Their brands mostly look

tawdry at best. Every day the British media carries stories about the rapaciousness of

bankers. As the next section will show, it is very difficult to brand banks at the best of

times. Right now in many places around the world the best image that banks can hope

for is that of a necessary evil. Nevertheless if a bank can achieve a positive brand it is a

major competitive benefit as this section will show. In a later Section, I shall show how

to go about measuring the value of brand.

A major theme of this series of papers is illustrated in the exhibit below.

Branding banks is next to impossible

Branding banks is vital

Surmounting the impossibilities creates

sustainable competitive advatage


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My thesis is that, because branding banks is both so important and so difficult, finding

ways to achieve it is an organisational competence that yields sustainable competitive

advantage. To do this the brand must be embedded in management structures and

processes and also in deeply held corporate values. The pattern of decisions that create

a brand need a lot of infrastructural „glue‟ to keep them coordinated.

The role of brand

In terms of the Gaps diagram I introduced in Section 1, brands cover a lot of ground.

One of the first points I want to make is that the communication of the value proposition

to the market is a part of branding. In banking, marketing communications have a

supporting role that works only when attuned to customer experience.

Comprehension of customer beliefs, needs, values and behaviour

Design of product service offering range

Executing the solution

Selecting / specifying the market

Shareholder value

Communicating the product service offering

Creating the solution

Gap 1

Gap 2

Gap 3

Gap 6

Gap 7

Gap 4

Gap 5

Gap 8

Comprehension of customer beliefs, needs, values and behaviour

Design of product service offering range

Executing the solution

Selecting / specifying the market

Shareholder value

Communicating the product service offering

Creating the solution

Gap 1

Gap 2

Gap 3

Gap 6

Gap 7

Gap 4

Gap 5

Gap 8

Banks brands, we have seen are founded to a large extent on the experience of

customers. This experience is not easily challenged by what a bank may wish their

customers to believe, as I discussed in Section 3.


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Own experience

Media comment

Trusted advice

Marketing communications

Contradiction

filtered

Confirmation

sought

Info

rma

tio

n

rein

terp

rete

d

The view of brand that I have expressed is the modification of customer‟s expectations in

a way that shapes how they experience their interactions with a bank.

Customer expectations

Customer perception of

the experience

The objective quality of the experience

BRAND

The matrix shown below shows the potential outcomes of this modification. It sets the

customer‟s cumulative experience of the brand against their experience of a particular

event. Each can be classed as either adverse or favourable experiences.


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Reinforcement Containment

Opportunity

Adverse Favourable

Ad

ve

rse

Eve

nt e

xp

erie

nce

Reinforcement

Fa

vo

ura

ble

Brand experience

Adverse reinforcement and favourable reinforcement are much the same but with

opposite effect. This is a compounding effect and has the characteristic nonlinearity that

we saw much of in Section 3. There is a momentum to both improvement and

deterioration that makes management watchfulness essential both to take advantage of

opportunities and to mitigate threats.

Favoura

ble m

omentu

m

Adverse momentum

Bra

nd

exp

erie

nce

Event experience


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In Containment (an adverse event in the context of favourable brand perceptions) the

bank is asking the customer to suspend judgement or, better still, treat the event as a

„one off‟ in isolation. Complaints are good in this situation. A complaint is a hint that

the customers really does want to support the brand and makes things better. Adverse

brand, adverse event customers are more likely to walk without warning. The important

thing is for the bank to recognise where discontent is building. As we saw in Section 3

dams can be breached suddenly and without warning. Watching the commitment

measure, as I discussed in that section is vital. In particular, note any shift in the

measure of ambivalence in The Conversion Model™i. In addition to this branch exit

interviews and their online equivalent are a good source of data of about event versus

brand experience.

A favourable experience against adverse brand is an

opportunity

What is needed here is to get the customer to extrapolate their perception of this event

more broadly. In banking, a key role of brands, I believe, is to generalise individual

experiences. We want the customer to think “I know my branch is good, perhaps all this

bank‟s branches are good” or “they‟ve always managed my mortgage well probably they

can do as well with my investments”. Sometimes this can be scripted into bank

interactions with customersii. In a case where the bank knows a particular aspect of

service has been improved it is as well to design conversations intended to generalise

the perception into the process. But also this is where marketing communications can

play a role that is otherwise difficult to achieve. When a customer is surprised by a

favourable event they tend to be open other messages that support the associated

brand. We create perception patterns that are useful to us in that they don‟t alert us

unless we need to be alerted. When we do get a surprise then we are open to the idea

that we may need to change our pattern of thought. At this point an advertising

message, which may, for example, be direct mail, stands less danger of being screened

out.

This then is what a brand can do to modify perceptions of experience and eventually

behaviour. How then is this achieved? Croxford et al, cited in Section 1 of this series of

papers equates brand with „trust‟iii. Enabling trust, I agree, is an important way in which

a finance sector brand exerts influence over perceptions. But I don‟t think that is the


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only way. We need to go to another level of detail to understand how brands act. This

understanding will help us move towards an attempt at the valuation of brands.

A definition of brand (for those looking for one)

I don‟t seem to have a burning need for an operational definition of „brand‟ to move my

analysis forward. However, you, the reader, might expect one, so here goes.

For the time being in this series of papers, until something better comes along, I‟m

taking my lead in this from John Grant. His book „The Brand innovation manifestoiv‟ is by

some way the most interesting and intelligent books on the subject I have found in my

researches. It is the closest I have seen to a „how to do it‟ manual.

He says:

“A brand is a cluster of strategic cultural ideas”

To which I should not resist adding ... “that inculcates and modifies our expectations of the

way the world works”.

While I shall use John Grant’s definition of brand throughout this series of papers I am not

wholly comfortable, in the context of my own experience, with all that he says. I shall deal

with this more fully in Section 12 where I discuss brand communication. For now though, it

seems to me that Grant’s emphasis is on brand as set of associations that emanates largely

from perceptions from without the organisation. In this he opposes what he makes sound like

mechanistic dictates of brand identity and essence from within the organisation. I think his

main reason for this is that such dictates frustrate the creativity that can be drawn from the

brand’s environmentv. I am very sympathetic towards that view

vi but I am uncertain that it

can be given free rein in a bank. My reason is that it is very difficult for a bank to stay „on

message‟ in its branding. Certainly this is true compared to other industries. In the


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next paper in this series I shall discuss the array of special problems that face banks in

branding. For now I wish to make the distinctions I illustrate below. In this illustration I

suggest we make a clear distinction between the organisationally conceived brand

identity and essence that we wish to convey to the market (s) and the means of creating

brand awareness. This in turn should exist completely independently of the means and

media with which we direct messages to the marketvii.

Is not

The elements of the story about the brand

that we want customers to own

The story

The words, images, ideas and

associations that convey the story

The telling

The time and place, the sequencing and the vehicles for the words, images and

ideas

The occasionIs not

When a bank‟s top management get together with the marketing people and sometimes

the ad agency or consultants to think through a story for the brand the result tend to be

predictable. Either (and most likely) the consensus develops round something more

bland than margarine or there is a solution so off the wall that people can hardly look

each other in the eye in the morning. A large part of the purpose of this series of papers

is to offer a pathway to something more relevant. For now, I shall just say that the bank

must be clear about the story it wants to tell but may need to incorporate into that story

the ideas that arise from the telling of it.

Some branding questions I like

I had better immediately confess that I‟ve had the exhibit below in various forms around

for so long and used it so many times that I no longer know who I should credit with it,

certainly more than one personviii. David Ogilvy is one of my heroes so I suppose there

is a lot of his thinking in it. They still seem to me good questions to ask and they affect

much of the thinking I shall use throughout this series of papers.


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Positioning Image Values Touch points

How we are perceived by target groups in

meaningful differentiation to our

rivals?

What personality do we want to display relative to those Of

our rivals that Makes our brand image

special to our customers?

What values Do we possess that ensure

that the personality is genuine and not Just a

flag of convenience.

What evidence do people see that

reveals we truly own the values?

What is special about us?

Why are we perceived this way?

What values underpin our personality?

How are the values demonstrated?

What does the product do? Who is it for?

Beyond functionality how else is the product seen?

Do we really mean it? Do we care beyond tomorrows profit?

Why?

How well does the experience, The touch

points, the interactions and

interventions match the values?

A taxonomy of bank brand effects

The diagram I used in Section 1, the first in this series of papers, based on that of

Croxford et al (op. cit.), refers to brand. In this brand is equated to „trust‟. Perhaps had

I to choose a one word definition of brand that would suffice. Trust is a big part of the

bank brand story. But it is far from the whole story. In this section, devoted to

understanding better the importance of brand to banks I want to dissect more precisely:

how brands can create shareholder value; and

what perceptions they act on to do so?

The exhibit below shows what the brand acts on. It is more than just the perception the

customer has of the bank itself.


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Product / service

CustomerProvider

organisationCategory Event

Effect on the customer‟s

perception of the industry

(including the customer‟s

definition of the industry

Effect on the organisation as a whole or the

division in focus in particular

Effect on perception of product or

service in the context of it‟s

rivals

How the customer sees

themselves both as a customer

and more deeply as a person

How the customer

interprets the event in the

context of chains and patterns of

events

Brand experience acts on perceptions of the...

The arena of brand impact in detail

The effect on the category

Product / service

CustomerProvider


The category is important in for banking. More so than for many other sectors of the

economy. It is hard for a bank brand to transcend the category. Customers have well

formed and deeply held perceptions of what a bank is. Moreover, there is a widespread

belief that „all banks are the same‟. In the recent financial crisisix banks were all tarred

with the same brush and this was not entirely unjustifiedx. Finally, when it becomes

apparent that governments will not allow banks to fail, they cannot even differentiate

through prudence.


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We must think about the importance of the category in people‟s minds. How do they set

the boundaries of the category? What does the landscape of the category look like to

them? Perhaps landscape is not the most useful metaphor. My once colleague Liz

Hantonxi likened the category of financial services to a lagoon. It is not just a case of

fishes of various sizes, shapes and colours. There are creatures that don‟t look like

fishes at all. Sometimes perceptions of a brand can change the shape and balance of

perceptions of the category.

One specific example of a single brand enhancing a category through marketing

communication is the Commonwealth bank of Australia in the late Seventies and early

Eighties of the last century. The Commonwealth Bank has tended to rely more on

advertising than its rivals having a significantly larger customer base over which to

spread the cost. A series of campaigns were designed to emphasise the human side of

being a bank manager. One series showed real managers entering into community life,

using humorous mini stories. Another showed manager saying „yes‟ to loan applications.

I never had the opportunity to research those adverts but the consensus feel about them

was, I was told, that they had raised the perception of all bank managers including those

of rivals. This was perhaps a natural consequence at that time of banks emerging into a

deregulated environment. But from the viewpoint of the Commonwealth Bank‟s relative

brand standard more than one purpose was served. At that time the Commonwealth

Bank was owned by the Commonwealth Government. These adverts did something to

place the Commonwealth Bank alongside its private sector as a bank competing with

them. Also the Commonwealth bank may, as a public service had been perceived as

more bureaucratic, which the adverts did something to alleviate. In addition because of

its various roles the bank was more likely than its rivals to have customers that were

relatively new to bankingxii. It was able to create in the minds of these customers a

different idea of what a banking relationship meant.

In banking perhaps more than other industries, marketing communication can say

something about the category. It is in fact difficult to prevent it from doing so. This can

be good or bad for the bank making the communication but it should never be

unconsidered. Sometimes, as in the above example, a bank can change perceptions of

the category to its relative advantage.


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Effect on the provider organisation itself

Product / service

CustomerProvider


Clearly the main target for branding, for banks, is the organisation itself. In other

industries, such as detergents, branding is more natural at the product levelxiii. Banks

can rarely escape a single brand imagexiv. There is a general need to shape a good

organisational brand for reasons I discuss elsewhere in this paper but here I want to

draw out two points that I believe especially relate to banks.

Individual brands matter more when sector boundaries blur

One the many severe difficulties confronting bank branding is that bank brands are beset

by other high street brands on one side and by brands with online banking capabilities

on the other. Once banks had an exclusive claim over nearly all of what they did-

certainly in people‟s minds. This is less and less true. It is more important now for a

bank‟s brand to set boundaries and defences.

Within the finance sector also things are less clear cut than once there were. Wealth

management, in particular has drawn banks and life assurers into each other‟s orbits. As

the category is more often in turmoil strong brands are essential. This is especially true

of organisations that span categories. Meanwhile, what so recently was seen as an

inevitable link between investment banking and retail banking is questioned. The sheer

size of banks is itself pondered as we ponder the implications of „too big to fail‟.

The role of brands in society is becoming more important

The world is becoming faster moving and mental models of the world are rapidly

changing. In one way brands are like holdalls that we can put a bundle of thoughts in

until we need to take them out and rearrange them. It is one of the ways we keep on


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top of things. But there are only so many we can carry. Keeping our brands close to the

grasp of our audience matters a lot. John Grant saysxv:

„I would guess there are usually fewer than 20 “anchor” brands for any one

person.‟

I have tried counting and it‟s hard to get to twenty, if you ask me. The place of bank

brands within these “anchor” brands is hard to assess. But from the limited evidence I

havexvi they have an uphill journey ahead of them to make themselves one of the

landmark brands even for their own customers.

The effect on the product or service

Product / service

CustomerProvider


A product or service can emerge from the organisation as a stronger brand, distinct from

the organisation. Consider the hierarchy illustrated in the exhibit below. At the base is

the organisation brand. On this brand rests the service and distribution system as the

platform on which products are supported. Finally, at the apex is „the offer‟ - a priced

solution to the customer‟s need. One problem with a marketing communication of an

offer is that that an offer really does have to be put into the competitive market place.

This usually involves either yielding price or feature advantages to the customer or

unusually convoluted product specifications. The more a bank‟s marketing

communications focus on the apex of the pyramid the more commoditised the product is

likely to be. But brand is often bland with no differentiation.


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Offer

Product

Service

Brand

This is a subject much debated among bank marketers. Every product manager regards

it as their duty to sequester as much of the marketing communications budget as they

can for their product. Distribution managers, however titled, want adverts to show

happy and helpful branch staff and so on. There is always, in my experience more

competition within banks than there is between banks. The brand usually suffers. In

order to elevate brands to the realm of measurable outcomes we have to get better at

assessing results in dollar terms. This series of papers is intended to contribute towards

that goal.

At the apex of the pyramid there is the chance of dollar denominated, demonstrable,

short term results. At the base there are good feelings. Vital though the branding of the

organisation is management attention is easily distracted from it. It will be argued that

the brand can be developed through offer advertising. In the section on brand

communications I shall try to find some examples. However the overall, and most

general outcome, is to say, for example, “this bank that offers mortgages which are this,

this and that”. Among British banks there is a strong tendency at present to relate offer

communications to calendar events such as those defined by the tax year or the

academic year. In Appendix 1, I illustrate, from a walk down the high street with a

camera, how these appear. If they work at all I doubt if they work for branding.


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The effect of the customer‟s self perception

Product / service

CustomerProvider


The interpretation of experience also affects how customers see themselves in relation to

their bank and how they think others see them. One of the most powerful questions

that can be asked in research is: What sort of person deals with this bank? Take, for

example, the attitude to finances clusters I described in Section 2 (or better ones if you

are able to discern them). Print up photos and cards that are representative of each

cluster and ask people that you have pre-assigned to each cluster (but not told which or

that there are clusters at all) to assign each to the bank they are most likely to have

their key banking relationship with. In reality it‟s hard for bank to focus on attracting

any special customer type. But there are examples of this happening. I have put some

of these into Appendix 2 to this paper.

The effect on how the event itself is perceived

Product / service

CustomerProvider


I have said that brands act on the interpretation of events and are themselves to a large

extent determined by the interpretation of events. It was not until the early Eighties

that most banks were able to derive good management information by productxvii.

Information systems were built largely around product but were not designed to yield

any management information at all. The tread since then has been to be to manage

more by customer profitability. The emerging trend is likely to be to manage at the

relationship intervention level – that is to say at the event level. I shall discuss this in

more detail in a later paper in this series.


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For now I want to introduce this illustration of the interaction of event and brand into an

enhanced version of the overall pattern of the systemic links between perceptions and

behaviour that I introduced in Section 3xviii.

Customer expectations

Customer perception of

the experience

The objective quality of the experience

BRAND

Beliefs

Attitudes(Reusable decisions)

Experience (feedback)

Choices

Outcomes

Contextualisationfeedback

Needs

Reframing feedback

Expectations

Realignmentfeedback

Interpretation

Expectations affect both outcomes, as they might be objectively measured, and the

interpretations of outcomes. Outcomes are affected because they are partially


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influenced by the pre-conceived notions that the participants in an interaction bring with

them. So both the objective outcome and the perception of the outcome can be favourably or

unfavourably influenced.

The ways brands create valuable

perceptions

Having outlined what areas of perception the brand acts on, I want to turn to the precise

effects themselves. What can a brand do for bank exactly?

Differentiate

Enhance

Assure

Contextualise

Tangibilise

The brand itself, through its intrinsic nature, enhances the customer‟s perception of the

outcomes.

The brand imparts differentiation to products /

services that may themselves be commodities.

Perception of the brand is a defence against the downsides

of the purchase decision.

The brand locates the purchase decision or

commitment within the realm of the buyers life.

The brands brings the decision into the concrete world of touch, sense and feelings.

Brand experience

acts to...


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Enhance

Some part of the price of the product or service is attributable to brand alone. This

happens with, say, Mulberry handbags. The brand alone justifies a price three or four

times what would need to be charged for a functionally equivalent product. Can this

happen in banking? To some extent it can. A while ago the Asian regional office of an

international bank was concerned that their Australian operation failed to match the

success of their Beijing Office in marketing their top of the range credit card. In

Australia of course there is strong competition for the business of the affluent. One

more credit card offers little attraction to wealthy customers. However, I believe that

in a society where new patterns are being formed and old paths challenged symbols are

more important. Some symbols such as a Rolex watch or a Mont Blanc pen can be

relatively easily acquired: a banking relationship less easily. I remember a number of

business people who prefer to have their bank‟s head Office branch on their cheques.

They clearly believe this says something about them.

So what sort of things can enhance a brand? Partially it depends on which customer

segment you have in mind. Partially it depends on relative positioning. In banking all

participants would like to occupy the same high ground. To relinquish this ground in an

attempt to differentiate is often seen as risky.

Brand enhancement of the banking experience is perhaps most explicit in the affluent

market. David Maude, in „Global private banking and wealth management‟xix shows

image and reputation ranking at fourth of twelve reasons for choosing a wealth manager

based on a study by IBM consulting.

Differentiate

Bank‟s sometimes get the wrong idea about differentiation. It may take a team of

MScs in applied maths and ICT engineers to build a product but that does not

guarantee differentiation. Another bank will have a team every bit as good. Banking

products get copied quickly. Moreover a lot of new ideas come to banks from

outsiders. These can be, for example, management consultants, card schemes or ICT

suppliers. Diebold, for example, is a leader in ATM innovation. There is a general trend

Differentiate

Enhance

Assure

Contextualise

Tangibilise

Differentiate

Enhance

Assure

Contextualise

Tangibilise


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towards banks finding it harder to make opaque to outsiders their sources of competitive

advantage in either process or product innovation.

Much of the value of a bank resides in products that are near commodities. A brand that

differentiates is very important. It becomes even more important when you consider the

life-time value of a customer to a bank in the light of the almost trivial decision that

starts a banking relationship. I once interviewed people who open many accounts as

part of their involvement with sports or social clubs. “I just walk down the high street

and go into the first bank or building society I see” reflects a fairly common view. In a

way this is not good news for bank marketers. But looked at from a different

perspective it shows the potential power of brand. A quite small brand advantage can

swing a lot of value when buying decisions are taken so lightly.

Assure

I have said that trust not the whole story but it is a big story. This is where we must

come to grips with it. It has always seemed to me that trust matters but trust in what

exactly? I think it is many things. Some failings are big but unthinkably rare, some are

small but can be anticipated with unfortunate regularity. One of the reasons why

assurance matters so much is because of what we see in Kano analysisxx. Much of what

banks do is expected to run smoothly. When there are failures against people‟s

reasonable expectations they cause considerable disaffection. My take is that assurance

is about potential failure and the customer‟s belief that failures will be rare and quickly

fixed.

I have indentified seven failures that customers wish to be assured against:

Financial failure;

Fraud failure;

Policy failure;

Process failure;

Signing up failure;

Relationship failure;

Innovation failure.

Differentiate

Enhance

Assure

Contextualise

Tangibilise


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Financial failure, the bank itself failing I would have a couple of years ago

thought unthinkable. But now banks have failed. Wachovia one of the best banks in the

world not so long ago has gone. By and large customers haven‟t lost a lot of money.

Governments decided that a lot of banks really were „too big to fail‟. But a coming close

to failure isn‟t too comfortable for its customers. We really do want assurance that this

won‟t happen to us.

Fraud failure is relatively rare but a nagging worry of which bank customers are

very aware. Identity theft continues to be a bogeyman, perhaps out of proportion to its

incidencexxi. Greater concerns emerge where for example; call centres are outsourced

beyond the direct control of the bank itself.

Time poor people are sensitive to things like fraud relating their banking arrangements.

There is a big difference in people‟s minds between a bank that will resolve these issues

painlessly and quickly and one that resists, doing the absolute minimum it is legally

required to do. As evidence, the ANZ bank claims to have had major success with this

television commercial.

ANZ Fraud Squad

http://www.youtube.com/watch?v=QUBdfHrz6IA

Policy failures result from deliberate actions by banks to arbitrarily (from the

customer‟s perspective) change policies. People want their bank‟s reaction to be

predictable but often banks fail to be. An arbitrary credit decision, for example a sudden

cessation of investment residential property lending can confuse and annoy customers.

Consistency is important to customers.

Process failures are the small niggling irritations that try customers‟ patience with

their banks. The main problem is that people just haven‟t the time or energy to deal

with unexpected problems. There is a distinction here that can matter a lot. How easily

does a bank fix a problem that it creates? How quickly does a bank create a problem

http://www.youtube.com/watch?v=QUBdfHrz6IA


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that I created because I made a mistake? The latter can be one of those „delighting‟

factors that I discuss in Section 3 where I cover Kano Analysis.

Signing up failure results from the reality of being a customer not living up to the

expectations of being a prospect. Signing up for a banking product is has outcomes that

are:

not easy to observe in advance;

not easy to trial; and

Sometimes hard to reverse.

Banks do not have easy equivalents to money back guarantees. The customer is taking

a riskxxii and needs assurance that can only really come from a brand.

Relationship failure is the frustration of some important customer needs of their

bank. Of these some of the most important are:

responsiveness;

flexibility; and

consistency.

In a later section I shall discuss some of the imagery that a bank brand should put in

customers‟ minds. In this I shall discuss the above attributes in more detail.

Innovation failure is caused by a bank lagging behind its rivals. People generally

expect that there bank will keep up with any initiative of its rivals. For example it will

support online banking and allow people much the same functions as their competitors do.

Part of what a brand does is to offer some measure of assurance that this is indeed the case.

I have framed each of these elements of assurance as a negative. The exhibit below shows

them as Kano Analysisxxiii

dis-satisfiers. These are things that are expected by customers but


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not delivered by the bank. There is of course another side to the coin and two (at least) of the

elements can be ‘delighters’ when done well.

Financial failure

Fraud failure

Policy failures

Process failures

Signing up failure

Relationship failure

Innovation

failure

Wors

tLeast

bad

Kano

analysis

expected

dis-satisfiers

Kano

analysis

potential

delighters

Contextualise

By contextualisation I mean the incorporation of the brand into the world view of the

customer. The brand becomes a ticked box for a set of semi automated actions,

decisions and responses. In a way it becomes a habit; favouring the brand seem a

natural part of life. There is a certain stickiness in thinking about change.

One of the ways of looking at this that casts light on what I mean by contextualise is

this. Banking is beset by brands both from the high street and from the online world.

Could either of these become more naturally a part of people‟s lives – a part of the way

they do things? A brand is a storehouse, a convenient repository of guidelines and

policies about how we face the world and the decisions we make in it. And habits are

so hard to break,

But now think of this. We shall see that banks are yielding territory to online and high

street rivals. Each of these contextualises the relationship with their brands in an

Differentiate

Enhance

Assure

Contextualise

Tangibilise


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altogether different way to banks. Losing a customer to a different context altogether is

harder to recover from than losing a customer to a rival that operates in a similar

context, You are in effect teaching customers a new context that is not bank. What is

bank, actually? Well, say, sitting down at your bureau to write out a cheque in your best

italic scripting and businesslike recording all the details on the stub. Gone, isn‟t it? It‟s

worth taking a bit of time to think about replaces it. However, that must wait for a later

paper in this series.

Tangibilise

I see this as making the brand real to the senses. It is the look, feel, touch, smell, hear

of branding. As such it intensifies the other effects. It seems to me important for an

abstract brand such as banking. The harder it is to make tangible the more important it

is to try to do so. Banks carry with them a lot of imagery; think of all those branches.

Buildings last a long time so the image they convey is unlikely to be the brand image

you want to put in people‟ minds today. Of course this isn‟t easy for banks. The

product is abstract. Moreover the service element is not as a firmly linked to this

abstraction. A hairdresser, for example, provides a service that has touch, taste (if you

take up the offer of a coffee) smell, reflected visions. Services as such can be very

tangible. It‟s just that banking isn‟t one of them. Can nothing be done? Please consider

the following tale of two logos. And I‟m not saying here that logos or marketing

communications are necessarily a key part of tangibilisation. I just want to observe

here that there are better ways if we take the trouble. The following example might

help.

A tale of two logos

The NatWest logo

Differentiate

Enhance

Assure

Contextualise

Tangibilise


24


The three arrows depict the banks that came together to create NatWest. The National

Bank, from which we get the „Nat‟; the Westminster Bank, from which we get the „West‟

and the District Bank from which we get the „Bank‟xxiv. Apart from any symbolism which

at best can be going round in circles, the logo doesn‟t seem to say much. It is the logo a

firm has because firm‟s have logos don‟t they? It probably counts as misfortune that the

NatWest logo looks quite a lot like the HSBC one – another abstract shape in the same

colour.

By contrast, please consider the logo of the Commonwealth Bank of Australia.

The Commonwealth Bank logo

When launched in 1991 in support of the banks privatisation, the logo almost instantly

achieved very high levels of recognition. It represents the Southern Cross, which of

course features on the Australian National flag and has its origins in the flag flown by the

Miners at the Eureka Stockadexxv. Someone at the Commonwealth bank had the brilliant

idea of putting the logo on the sightscreen behind the batsman at test cricket matches,

ensuring that it was onscreen for nearly all the televised play. It was also through this

associated with Australia‟s successful cricket team, note, the only team sport played at a

high level across the country. Cricket, important to the soul of the country as being the


25


sport in which their greatest sporting hero beat the pomes and for which the

Commonwealth Bank sponsors the Australian Cricket academy seem by people as

indicating the bank‟s „nurturing‟ role. For some people the logo is affectionately known

as the SAO biscuit dipped in Vegemite – two more Australian iconsxxvi. Finally, the old

Commonwealth Bank logo looked down from space on a map of Australia. This one

looks up at the stars.

So there we have a logo dripping with icons and cultural associations. Was it all

planned? Does anyone immediately think of these things I have described when they

see it? I doubt it. But I will argue that if a bank has a clear idea of what it stands for

and a consistent approach to telling that story then it has a better chance of a bit of luck

going its way. Let me say again, please don‟t attribute to me any view that at logo or

indeed and advertising campaign can work magic on a bank brand. They can‟t. What I

am saying (and shall elaborate in the next section) is that branding banks is so hard you

have to use every tool at your disposal, fully and in a coordinated way. In this case, in

my view, the Commonwealth Bank has succeeded (for whatever reason) and NatWest

has failed. What could we have done differently, NatWest will ask? I don‟t know. For

banks, at least, the essence of a brand must come from deep within the values of the

organisation.

The positive effects of bank branding operating in concert

Think of the five elements that I have described as ingredients in a magical potion. You

have to get the mix exactly right. Enhancement can create value proactively. Assurance

is more defensive. Differentiation is somewhere between the two. To contextualise and

make tangible enhances the effect of the other three.


26


Differentiate

Enhance

Assure

Contextualise

Tangibilise

Active

Pa

ssiv

e

SupportValue adding

intensify

embrace

Are there conflicts in brand effects?

Assurance is the most traditional stance of bank brands. That is why banks liked to have

such imposing buildings. Hitherto, at least, a part of this assurance has been derived

from the category and the regulatory and institutional framework that supports it. The

more a bank departs from the category in the direction of differentiation and

enhancement the more it needs to convey assurance more actively. There is not

necessarily a conflict but there is a need to integrative creativity.

Consider the two television advertisements linked in the YouTube reference below. And

let me emphasise here, I have researched neither of these advertsxxvii so I‟m going to let

you make your minds up to see if you agree with me on this.

Commonwealth Bank „What the hell were they thinking‟

http://www.youtube.com/watch?v=2v89M3lhlKA

National Australia Bank – „Climb every mountain‟

http://www.youtube.com/watch?v=2v89M3lhlKA


27


http://www.youtube.com/watch?v=HWLGlp59Nfc

At this point in time the Commonwealth bank, in personal banking, had been on a roll for

some time and was seeking to build on that, I suspect. It probably felt it had given itself

some elbow room. The advert pulls a clever switch in perception and shows that the

Commonwealth Bank at least wishes to portray itself as down to earth and, well, people

you can trust, people with commonsense. Mind you the advert does get all the attention

grabbing stuff in up front. Then it plays to the mindset of the audience that believes

there is more to Australia than the traditional hackneyed symbols.

National Australia Bank had fallen from the lofty status it had painstakingly built in the

period following deregulation of the Australian Banking Industry. By the end of the

Nineties it had become, in most people‟s eye, Australia‟s premier bank. The Noughties,

however have been less kind. At the time of this advert the National Bank probably felt

it had got the worse behind it and it was time to get back on the front foot. However,

The National Australia bank advert seems less clear about what it wants to say other

than it is trying to be a bit different. It may have left the past too far behind. The

professional yeti impersonator, imported from the UK was eye catching but it said

nothing to me about clear differentiation combined with trust. The problem may have

been it was trying too hard to differentiate its present self from its past self. You will

note that there are no Yetis in Australiaxxviii.

So then, of the two adverts which one best differentiates while maintaining the link to

assurance? It‟s your choice of course, but I‟m going for the Commonwealth Bank one

every time.

The playing field for the benefits of bank branding

The matrix below is my framework for analysing the benefits for branding banks. I call it

the playing field in the heading because I think at some point branding banks can‟t be a

spectator sport. Doubtless there are readers who have an interest in banks that does

not extend to their brands and those with an interest in brands who are not much

interested in banks. They are welcome to skip ahead. However, for those who are in

http://www.youtube.com/watch?v=HWLGlp59Nfc


28


the world of branding banks I suggest now is the time to sharpen your pencils and think

your way through this matrix. This matrix leads into the creation of stories. Your story

has to be, well, yours, doesn‟t it? There are worse places to start than here. The whole

purpose of this is to get beyond an unexplored notion of brand as a reputation or as

trust or as a promise. How does a bank brand create value?

Step 1 Do these matrix axes work for you? You can change them. Add more

categories on either and / or change my definitions to what works best for you. (You

may however, want to start off working with my matrix and come back to revise it if it

doesn‟t work the way you would like in practice.

Step 2 Specify the benefit in each cell of the matrix that your bank

creates. I think this is one of the things in which the thinking and the doing is more

important than the outcome. But unless banks get down to the detail of the benefit they

expect to get from successful branding it simply isn‟t going to happen.

Product / service CustomerOrganisationCategory

Differentiate

Enhance

Assure

Contextualise

Tangibilise

Event


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This then is my version.

Product / service CustomerOrganisationCategory

Differentiate

Enhance

Assure

Contextualise

Tangibilise

Enhances category

importance

Adds to the value

of the

organisation

Is intrinsic to the value proposition

Builds my self image

Defines the

boundaries of the

category

Transcends

category

Defeats

commoditisation

Makes me feel

different from the

herd

Demystifies the

category

I won’t look or feel

foolish

I fit in with my

chosen group

Makes my self-

image visible to

others

Makes abstraction

concrete and

touchable

Builds

organisational

symbology

Brings into the

world of physical

senses

Shows the place

of the category in

the world

landscape

Logically fits the

product / service

range

Fits in with my

lifestyle

Will deliver on the

promise

The values of the

organisation

stand behind the

product

Event

Of itself improves experience of the

interaction

Feels better than

comparable

interventions

Closure with

confidence in

outcomes

The event is part of

a recognised

pattern

Even on the ‘phone

the event is 3

dimenasional

In a later Section of this series, this diagram, mine or yours if you have a better one, will be

our starting point in building a brand story.

Deciding not to brand banks

What is the logical thinking of a bank that doesn‟t brand? Can it all be left to inertia?

Using the overview exhibit I introduced in Section 1, let us introduce the idea of a cost to

branding. Remember I have defined branding much more broadly than what is achieved

by advertising alone.


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Customer perceptions

Perception of specification fit to needs

Perceptions of service

experience

Perceptions of brand

Bank efficiency

Mix of businesses

Corporate centre

performance

Business unit performance

Shareholder value

Investment+

-

Bank financial

structure

Perception of price

The illustration above adds the element of cost. The branding is expensive not least in

management time and energy throughout the bank. Bank efficiency (revenue to cost)

falls while perceptions of brand (hopefully) rise. We must never lose sight of what I

lustrate below.

Certain Uncertain

Future / sometimeNow

Measurable Unmeasurable

Stripped from budgets owned by

someone

Contribute to budgets with

uncertain ownership

Investment in brand $

Returns from brand

investment $


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I had always to remember that for the cost of an advertising campaign, for example, I

could have equipped everyone in my division with a laptop computer. And we need to

ask the question which act would have done more for branding. That is to say what

brand image would be created by bank officers visiting clients with their laptops under

their arms? Bear in mind this was the Nineties and laptops were less ubiquitous than

today.

So it seems fair to say that it is a great temptation to a bank not to get too involved in

branding. Most do, of course, because... well you do don‟t you? But it is by no means

certain that you really have to. If we believe in brands and marketing more broadly we

have to be very clear in how we demonstrate the return to shareholders.

Conclusion

In this section I have asked, what value is to be gained by branding banks? For now, I

won‟t put a dollar value on branding or even suggest a methodology for doing that. I do

plan, however, to attempt that in a future paper in this series. We shall see, in the next

section, that there are cogent reasons for saying branding banks is at the extreme end

of difficulty in brand management. Moreover, it will be made apparent that some banks

hardly try. Is the game worth the candle? There are those who say that a bank has a

brand, good or bad, just get on with it. If you have a reputation to lose then you have a

brand to protect. That is a minimalist approach. In some world views perhaps that is all

there is. Just try not to make mistakes, try not to lose reputation.

My view, on the contrary, is that Branding is an institutional competence that is vital to

success. It is sustainable as is difficult to replicate. I know of no bank product that

cannot be imitated by a rival in less than two years. Service process improvement and

ICT systems rarely take more than a couple of years. What leads to sustainable

advantage in banking is management control and coordination. These cannot be

achieved by rearranging the boxes on the organisation chart. (Although a bad

organisation structure can certainly cripple a brand, as we shall see). This is partially

because the organisation framework must be fuelled by the blood circulation through

well designed processes. And the culture of the organisation is vital. I have twice come

up against banks with strong risk control cultures running through them. Speaking as

someone who implemented Basel I at a bank, I am no detractor of risk management.


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Banks don‟t survive without it. BUT the risk management culture must be

counterbalanced and complemented by and integrated with a brand culture. In the next

Section of this series of papers I shall demonstrate exactly how difficult it is. I believe

that it is only by understanding what we want our brand to do (as I have attempted to

offer some guidance towards in this section) and understanding the obstacles in the path

to achieving that (as I shall do in the next) that we can begin the journey to outpacing

our rivals in bank branding. The angels are in the detail.


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Appendix 1

Offer marketing triggered by the calendar

Yesterday as I write 18 April 2010 all banks on my route are using their windows to plug

ISAs, a British savings account with a government tax break. This campaign is not

getting a lot of support from media comment, see below.

„The banks came in for a good bashing from the three Chancellors on Monday

night. And yesterday brought yet more evidence of how richly deserved the

public abuse seems.

The Consumer Focus report on cash Isas makes depressing reading. It is very

hard to defend the banks against the charge that they shamelessly exploit

ignorance and inertia to give millions of their customers a very bad deal. The

banks make good use of “bait and switch” tactics with other savings products,

enticing customers in with high teaser rates then reducing them once the fish is

hooked. With cash ISAs the behaviour appears especially egregious‟ David

Wighton: Business Editor‟s commentary, The Times March 31, 2010

But form the posters, you get no impression that the banks were in any sense trying

very hard. Tired imagery supporting a rate based offer. Not hint of branding but more

important not a hint of any support to wider branding that might be occurring in these

banks. It is just „going through the motions‟ advertising.


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35



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Appendix 2

Some examples of a brand attracting

specific types of customers

My general attitude is that mostly banks have to work with the very mixed customer

base they inherit. Most banks I know are the result of s an historic culmination of

mergers and takeovers. From the perspective of many the customer base just

happened. I must concede, however that there are notable exceptions. Here are some

of them.

National Australia Bank – Australia – late 1990s

National Australia Bank emerged from the era of bank regulation a bit like the underdog

determined to be top. Westpac (or the Bank of New South Wales as it then was) was

the leader to be overtaken. Nobby Clark, its CEO seemed to me to be one of life‟s

learners. National Australia bank has a smaller but perhaps more select client base than

its rival. Several high net worth individuals tell me of having been drawn from branch

queues into a private room for service. And the National was strong in the most

profitable sector of the business market.

My favourite interview quote on that subject (around 1999):

“Oh no, mate, I don‟t bank with the National, if they wanted to bank me I‟d know

I‟d really made it!”

Rabobank – Australia – around 2000


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Rabobank entered the Australian market decisively with the acquisition of the Primary

Industry Bank of Australia. It positioned itself as the expert in banking for farmers who

farmed as a business rather than as a lifestyle. It has consistently outperformed other

all other banks in the rural sector in customer perceptions.

Macquarie Bank – Australia – 1990s onwards

“When you look closely you always find Macquarie behind everything” So said a man in

one of my in-depth interviews and I think he is not alone in that view. Macquarie puts a

lot of effort into risk management and enters new territory using the strategy that they

call adjacency. That is they only venture a new products into markets that they know

and new markets with products that they know.

Existing Potentiaal

Exis

tin

g

Pro

du

cts

Po

ten

tia

l

Markets

Without too much overt branding, Macquarie seems to have established a presence in

the mindset of people who are affluent and streetwise without necessarily having a high

level of financial sophistication. There is a “stick with Macquarie and you can‟t go wrong”

attitude. It helps a bit of course that Macquarie is known as the millionaire factory

because of the number of staff it has enriched.


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Islamic banking

I shall confess immediately to not knowing as much about Islamic banking as i should or

should like to. However, it is a salient example of a bank brand that appeats to a highly

specific group of people . The first Islamic bank did not appear until the mid-sixties and

the consistent annual growth rate has been double digit. Shariah-compliant assets

reached about $400 billion throughout the world in 2009, according to Standard & Poor‟s

Ratings Services, and the potential market is $4 trillionxxix. It has been accepted as a

„All HSBC provided solutions and third party solutions offered through the HSBC

Private Bank carry the endorsement of the HSBC Amanah Shariah Board, ensuring

adherence to Shariah law.‟

Bendigo Bank

Bendigo Bank is a small but successful Australian bank. Over the last few years it has

made rapid inroads into the business banking market. Superficially it is easy to think

Bendigo would have difficulty in developing competence in this area. However Bendigo

has attracted businesses that are amenable to its community banking approach and, I

suspect, prefer to have their banking centred on the branch, a model larger banks have

mostly moved away from but which is still valued by a significant group of customers.

http://en.wikipedia.org/wiki/Shariah

http://en.wikipedia.org/wiki/Standard_%26_Poor


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40

60

80

100

Jun-0

2

Sep-0

2

Dec-0

2

Mar-

03

Jun-0

3

Sep-0

3

Dec-0

3

Mar-

04

Jun-0

4

Sep-0

4

Dec-0

4

Mar-

05

Jun-0

5

Sep-0

5

Dec-0

5

Mar-

06

Jun-0

6

Sep-0

6

Dec-0

6

Mar-

07

Jun-0

7

Sep-0

7

Dec-0

7

Mar-

08

Jun-0

8

Sep-0

8

Dec-0

8

Mar-

09

BEN BOQ BWA SGB SUN 'Big 4'* All financial institutions

The exhibit shows Bendigo as the bank with most satisfied business customer between

2002 and 2009. This is calculated as the percentage of customers scoring the bank 4 or

5 on a scale of 1 to 5 where 5 means the strongly satisfiedxxx.


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Notes and references for Section 4

i See Section 2 for a detailed discussion of Conversion Model™ segmentation.

ii Brand disciple is so hard to achieve in banks that a little “do you want fries with that?”

is often part of the solution.

iii In many of the books and articles I have read, brand left undefined as that thing that

wins customers, enables higher prices etc..

iv John Grant „Brand Innovation manifesto, 2006, John Wiley and sons ISBN-13:978-0-

470-02751-6.

v This is an ongoing feature of my relationships with advertising agencies. The Account

director has to balance the client‟s desire for a focused brand reflecting desired corporate

identity with his or her creative team‟s desire to create something special. I have to

admit here that this problem is more urgent with banks than with, say, Apple. The best

account director I have known at reconciling these contesting worldviews is James

Roberts, now Managing Director of Red Hammer in Sydney. Let this footnote be a

record of my thanks.

vi I think I begin to see an unexpected (by me, anyway) feedback loop in this. The

reception of the brand story not being ever quite what we expect reshapes the brand


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story itself.

The telling of the story

Brand essenceCommunicated

(The story)

Brand imagereceived

The interpretation of the story

An unexpected feedback loop

vii Interestingly, it becomes apparent that this is an opportunity to introduce the QFD

tool that I discussed in Section 1 to make the multifaceted link from the story to the

telling. However, this mechanistic approach would be so removed from John Grant‟s

intent that I shall refrain from it.

viii If I have inadvertently breached anyone‟s copyright with this diagram, I am more

than happy to remove it.

ix Coming to a head in August 2008.

x I should perhaps add the rider that the media was often at the very least sloppy in

failing to distinguish between retail and investment banks.

xi Liz Hanton was Market Research Manager for Commonwealth Bank business banking

around 1996 – 1999 and a major help to me in formulating my views of the

marketplace.


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xii At that time the Commonwealth Bank was preferred by many migrants because its

deposits were government guaranteed. Also as the main bank for the distribution of

welfare payments it tended to bank a greater proportion of lower socio-economic groups.

xiii I shall cover the difficulties the banks have in sub-branding i a later paper in this

series.

xiv Unless another bank is acquired, when its brand is, ideally retained, when permitted

by the regulatory authorities.

xv Op. Cit.

xvi Which I shall present in a future paper in this series.

xvii I assume that the Australian banks, with which I am most familiar, did not lag the

rest of the world by too much in this respect. Around 1990, having discovered the

importance of home mortgages to customer NPV, I worked my way through Westpac;

Retail Banking Division looking for the person responsible for the product. The role

turned out to be located several tiers down the hierarchy and the only information about

the product I could get was 5 overheads slides prepared by an undergraduate as part of

their work experience summer vacation.

xviii It was Charles Handy, I think, who said you learn more from writing than you do

from reading. I expect that on a number of occasions I shall „enhance‟ elements of these

papers as I write them and will not have the opportunity to revise earlier versions until I

have got to the end and can recycle back to the beginning for my second drafts.

xix „Global Private banking and wealth management‟, David Maude, 2006, John Wiley &

Sons ISBN 13: 978-0-470-85421-1 – Another of my „must read‟ books.

xx I discussed the implications of Kano analysis in some detail in Section 3.


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xxi Just count all the shredders appearing in people‟s homes.

xxii Before a banker tells me, I do know the bank is taking a risk too. Once of my

mentors in the practicalities of banking, Alan Price, then Chief Manager, Commercial

Banking at Westpac, was once aggressively asked in an interview:“ Your customers don‟t

trust you like they used to, do they?” He leaned forward looking the interviewer in the

eye and replied: “We don‟t trust our customers like we used to, either.”

xxiii See Section 3 for more detail.

xxiv An old District Bank joke, sorry.

xxv The rebellion by gold prospectors at the Eureka Stockade in Ballarat, Victoria,

Australia on 4 December 1854 was prompted by grievances over heavily priced mining

items, the expense of a Miner's Licence, taxation (via the licence) without representation

and the actions of the government and its agents (the police and military) Wiki

xxvi Salvation Army Order cream crackers for the needy, vegemite a plant extract

spread inedible to any but Australians and featured in the Men at Work song „I come

from a land down under‟.

xxvii As I shall discuss in a subsequent section, you should never trust a banker‟s

judgement on bank advertising. We have a completely different view to the brand

audience, for example banking matters a lot more to us than it does to them. Always

research advertisements, especially ones as expensive and more importantly committing

as these two.

xxviii Whatever you might think about the Wallabies front row.

xxix Munawar Iqbal and Philip MolyneuxThirty Years of Islamic Banking: History,

Performance and Prospects, Palgrave Macmillan, London, UK, 2005 and wiki

http://en.wikipedia.org/wiki/Victorian_gold_rush

http://en.wikipedia.org/wiki/Ballarat,_Victoria

http://en.wikipedia.org/wiki/Victoria_(Australia)

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/Miner%27s_Licence


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xxx The graph is one of a set published by TNS Australia monthly from data collected in

their Business Finance Monitor

Branding Banks For Shareholder Value 4.0 Why Brand Banks

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