Differentiating a bank’s services

Ron Shevlin has a very good post on the challenges banks face on differentiating their services. At Cequity, we do believe that “customization of services” is really the future of bank branding. Banks & Financial services business need to understand customer transactional behaviour a lot more and tailor-make their services to customers according to their needs at that time. Differentiation by understanding “the pattern behind transactions” is going to  become a huge competitive advantage for banks & financial services businesses in the future – which is starting now!

Take a look at what Ron has to say:

Financial services branding is a hot topic these days, from releases of (methodologically suspect) brand rankings, to a number of blog posts. Stealing Share published a study recently, and had this to say about bank brands:

“The major banks remain undifferentiated and deliver little to no brand meaning. What banks need is a new brand promise, one that is a reflection of who the target audience is.”

In the future, banks will go down one of the following three branding paths:

1) Specialist. The brand message for firms going down this path will be “We do [fill-in-the-blank] — and only [fill-in-the-blank].” Fill-in-the-bank might be a specific product or service, or perhaps “serve” a specific segment of the market.

Rationale: The financial supermarket concept has never worked, and never will. Consumers have never wanted a one-stop shop, and many never will. Self-directed consumers who know what they want, are willing to put in the effort to manage their finances — and multiple financial providers — will place a value on firms that specialize in narrow product areas, services, or their particular segment.

2) Trusted, objective advisor. The brand message for banks on this path is: “We do right’s for you — not us.” Think Miracle On 34th Street with Santa sending customers to other stores because it’s right for them. Sound crazy? Sure it does. But this is true differentiation — and will plenty of traffic in the door and on the site. It’s working for Progressive Insurance.

Rationale: There’s a segment of consumers — they tend to be younger, less affluent, less highly educated — that need advice and guidance on how to manage their financial lives and how to make smart decisions. Trusted advice is easy to get when you have $10 million in the bank (which is funny to say, because the people who have $10 million usually don’t keep it with a bank). Trusted, objective advice — regarding both sides of the balance sheet (assets and liabilities) — is an unment need among many consumers.

3) Operational excellence. The brand tagline for firms on this track is “We don’t screw up — ever. And if we do, we’ll fix it so fast you won’t even know it happened.” (I’m sure the copywriters will come up with more appropriate language).

Rationale: Relatively affluent, highly educated consumers value this more than anything else. When my bank screws up a $50 charge, it can only make me wonder: “If you can’t keep track of $50, how can you expect me to invest $500k with you?


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At Cequity, we believe customer intelligence will be the biggest competitive advantage enterprises will have in the next decade or two. Successful enterprises of tomorrow will be the ones who can organize and leverage this information at speed to optimize their marketing performance, increase accountability, improve profit and deliver growth. Cequity insights will bring to you trends and insights in this area and it’s our way of sharing best practices so as to help you accelerate this culture and thinking in your organization.
August 2008
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