Is Your Financial Institution Any Different? Probably Not…

A 2012 essay by Gallup analysts Jai Gill and David Helvadjian says that on-brand behaviors — not slogans — are what truly differentiate banks and credit unions.

When Gallup studied differentiation in the banking sector, only 7% of consumers believed there was “one bank” that was better than the rest. 44% said “all banks and financial institutions are about the same.”

This despite the fact that financial institutions invest enormous amounts of time and money in crafting what they think is a unique identity — something special, singular and deeply resonant. They say they care about their customers. They brag about their “first class customer service” and “smart banking solutions.”

Subscribe TodaySo what’s the problem?

That’s pretty much what every other bank and credit union says.

And they may even be telling the truth from time to time, but how many banks and credit unions prove it every day and in every way?

“Some banks may find it perversely reassuring that they are the same, because customers are likely to be loyal,” Gallup’s researchers observe with a twinge of cynicism. “They have no reason to go elsewhere.”

Gallup’s Perspective: You can’t achieve meaningful differentiation with marketing alone. Building a brand takes more than lip service. Because financial institutions are so similar, execution is all that a bank really has to prove itself different and better. But many financial institutions equate “execution” with the things bankers do on computers, not what they do with people. Customer-facing employees are the brand.

( More Details: The 15 Most Common Brand Positions in Retail Banking )

Exhibit A: The “Community” Bank Brand

Gallup researchers single out one brand position used commonly by both banks and credit unions: “We are all about the local community.” The strategy is to evoke a sense of loyalty in people by stressing the close, interpersonal connections among the those in the local target market. The financial institution runs ads with photos of local people and places. They donate to local charities, sponsor local sports teams and support local schools. But this is mostly marketing and PR. What can staff do to live out the brand on a daily basis?

Gallup says the “community” brand position can be tricky to manifest in staff behaviors, but it isn’t impossible. One bank, they note, has found some unique ways to do it. On game days, bank employees are permitted to wear t-shirts from local schools and colleges. Employees are encouraged — and even sometimes paid — to volunteer at community events like street fairs and car shows where the bank is always sure to set up a booth. The bank’s mortgage experts keep photos on their desks of houses bought by people who got their loan through that officer.

None of these ideas cost very much — staff behaviors require more cleverness than money — but all contribute significantly to how consumers perceive the brand. Yet few banks mobilize that sort of behavior.

( More Details: 10 Of The Best Banking Brands To Watch )

Actions, Not Words

That’s the whole point, Gallup argues: It takes actions — not words (e.g., marketing) — to build a truly powerful brand. Consumers respond to actions that prove the bank does what it says it will do.

Financial institutions generally believe that their staff training programs can effectively instill brand values, but that isn’t happening. Others falsely believe new employees will “learn the right way” by osmosis — that employees who are simply exposed to the corporate culture will adequately absorb the brand lessons they need. Not the case.

When Gallup researched the subject, they asked frontline employees at banks if they could think of any brand-building behaviors. They could only cite grand organizational goals instead however, and no specific actions. They could talk about customer-centricity, for instance, but they couldn’t name specific behaviors that truly bring it about.

Key Question: How many employees in your organization do you think really embody your brand?

When an experience with a brand representative doesn’t connect with a customer’s perception of the brand based on the bank’s external messaging, the customer is likely to experience brand ambiguity — a brand disconnect, or what Marty Neumeier calls it, a This is why it’s so important that frontline employees be authentic representatives of the brand.

Gallup’s Perspective: Formulate a brand identity, align organizational goals to the brand values, and clearly define behaviors to help employees bring the brand to life. Screen and hire frontline employees based on their likelihood to exhibit on-brand behaviors, and then coach them on specifically how they should do it. Systematically select employees whose personal ideals and beliefs align with the organization’s brand values. These employees will be far more likely to successfully execute the company’s strategy during critical employee- customer interactions.

( More Details: 5 Things HR Must Do to Build Your Brand )

Making Brand Behaviors a Sales Metric

Gallup found one bank that made the mistake of having its team leaders dwell on, sales metrics rather than positive brand behaviors. This yielded modest sales and service gains, but ultimately prevented the right brand-building behaviors from being institutionalized within the bank. As a result, each branch focused on getting a score that had no connection to the bank’s brand or its values.

Gallup’s Perspective: The success of any brand program hinges on integrating middle managers, who serve as the bridge between the leadership team’s vision and the frontline employees’ actions.

 

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