On a Mission
A day with Mike Harris
Stand for Something
Building trusted brands
The Upside of the Downturn
Ten Management Strategies
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02 - A Brand You Can Bank On?Thursday 16th July 2009 I was reading a new article recently which quoted O2 marketing director Alistair Johnston as saying: “I think the fact we’re not a banking brand probably helps us in the current economic climate. The industry has been focused on getting people into debt. But the purpose of this product is to help customers better manage their money.”
He continues: “We’re using these products to build loyalty and trust in us as a financial services brand. Once we’ve got that platform, we’ll be able to offer services that we can charge for directly.” I hope this means that in time when they have built up a customer base, existing customers will be treated as favourably as new ones, far from the case with the 'mobile mentality' we have experienced over the years. High DefinitionTuesday 14th July 2009 I managed to track the definition of functional vs emotional values debate back to the 1970's. Rokeach (1973) defined a functional value as: "a value relating to the way in which something works or operates and can be evaluated through rational deduction".
An emotional value was defined as: "a value relating to a person’s emotions and derived from a person’s circumstances, mood or relationships with others, and being instinctive or intuitive or based on feeling, as distinguished from reasoning or knowledge." Not only does our financial marketing position have to be distinctive, we have to be aware of appealing to the instinctive! Speed is the Key for IntroducersMonday 13th July 2009 The National Association of Commercial Finance Brokers (NACFB) annual survey has identified the key attributes that a broker looks for when dealing with a lender. The most important factor to brokers is speed of response with 91.3% of members ranking this as either extremely or very important. The next key selling point for brokers is competitive pricing, with 87.6% of brokers rating this as either extremely or very important. Other characteristics that a broker looks for in the ideal lender are risk appetite (72.6%) and an existing relationship (68%). Despite being a perennial hot topic, only 50% of brokers rated commission paid as either extremely or very important and of this figure less than a third (14.3% of the total respondents) cited commission as extremely important. Chief executive of the NACFB, Adam Tyler, explains: "The results of this survey show that the speed of a lenders decision is by far and away the most important consideration for brokers. If a lender is serious about the broker channel, this should be the area above all others that they concentrate on getting right." Strand Financial has recognised this important attribute when developing the corporate identity for SME Invoice Finance that embodies speed, strength and flexibility, in the form of a big cat. These are the key messages to be conveyed to "cash hungry" small business owners, who particularly in times of economic crisis will feel the need for all three of these qualities in equal measure. Bancography Brand Value IndexSunday 12th July 2009 Bancography ranks financial institution brands in its annual 2009 Bancography Brand Value Index
During one of the most turbulent periods in the financial industry, the Bancography Brand Value Index (BBVI) reveals that strong brands can endure. Among the largest institutions in the United States (banks with assets of at least $30 billion), U.S. Bank holds the most powerful brand, followed by Wells Fargo, Northern Trust, PNC and JPMorgan Chase. Leading brands in the mid-sized institution category (banks with assets between $2B – $30B) include Woodforest National Bank (TX), Bank of Hawaii, The Park National Bank (OH), Amarillo National Bank and Silicon Valley Bank. In the 2008 BBVI, Wells Fargo ranked as the best brand in the $30B asset tier, with U.S. Bank placing second. All other $30B+ banks that ranked in the top ten in 2008 remain in the top 10 in 2009, with a slight shuffling in the rankings. Woodforest placed atop the $2B - $30B banks for the second consecutive year. The similarities in the rankings underscore a fundamental attribute of top brands –consistency in service, pricing and earnings. Despite the stability among the largest institutions, there was some variance in the smaller asset tiers. New entrants to the top 25 in the $2B - $30B asset tier include Park National Bank (OH, 4th); Intrust Bank (KS, 7th); and UMB (MO, 13th). Notably, some of the largest declines occurred at banks based in regions severely affected by the economic crisis. Five institutions based in California, Florida and Nevada fell out of the top 25 in the mid-sized bank tier due to severe declines in earnings and deposit growth. In addition to Woodforest, all but one of the 2008 top 10 returned to the top 25 this year, including Amarillo National (10th in 2008 and 4th in 2009) and City National Bank (WV; 4th in 2008 and 8th in 2009). Bancography, a financial services consulting firm, announced these findings in the release of its 2009 BBVI, a quantitative ranking of the brand strength of all U.S. banks, thrifts and credit unions. The index ranks financial institution brands by the premium they add to each institution’s underlying tangible value. In calculating brand value, Bancography quantifies the proportion of each institution’s long-term value that is attributable to the intangible factors that constitute an institution’s brand. These factors include the institution’s reputation, service quality, image and market awareness. The brand value index identifies institutions that produce financial results beyond what their capital base, market conditions and competitive environments would predict. The calculations reward institutions that display consistently strong earnings and a reasonable cost of funds. The First P - Redefining the Marketing MixSaturday 11th July 2009 The 4 Ps of the traditional marketing mix (Product, Price, Promotion and Place) is an increasingly tired formula for the modern age of financial marketing. Even if we do augment the numbers with the additional three Ps consisting of People, Process and Physical Evidence, this is not a dynamic way of looking at how we gain more customers or generate long-term customer value in this high noise, high competition world. What we're suggesting is not the 5th P or the 8th P, whichever definition you subscribe to! The modern integrated marketing mix must have a powerful First P, one that really matters: Positioning. Without Positioning, without the ability to Create Your Own Space, companies cannot command sustainable growth and profitability. From Positioning to OppositioningFriday 10th July 2009 "For every action, there is an equal and opposite reaction." I Cannot Hear What You SayThursday 09th July 2009 Positioning is a strategic statement of what differentiates your brand competitively in the market - and inside the minds of target clients. It's what gives them reasons to buy your brand, to be loyal to your business, to be an active referral source for you. Tangible (products & services) benefits form the proof points that support your positioning and make it believable - but a truly strong positioning goes beyond these tangible factors, making powerful and emotive connections.
Finding these emotional connections is what turns a product or service into a value-added brand. Due to a proliferation of products and services in financial services, most struggle to have a unique selling proposition.
“What you do speaks so loud that I cannot hear what you say.”
Ralph Waldo Emerson The difference is usually not ‘what you do’ but ‘who you are’ and ‘how you do your business differently.’ Exploring SPACEWednesday 08th July 2009 The Strand Financial SPACE model builds on the 4Rs and is a useful tool in helping financial marketers achieve a powerful, differentiated, balanced brand. It not only gives a brand snapshot, it is predictive over time - since there is a direct correlation between a lessening in differentiation and the accelerated rate of a brand's decline. The good news is that the opposite is also true in terms of adoption and ROI!
We can plot the points below on a radar chart against the 4Rs attributes, using data from a specially structured survey, enabling you to identify at a glance where issues and opportunities exist: S Strategy
P Positioning
A Architecture C Communication E Engagement We are now using this Model to rank and measure the perceptions of clients, intermediaries, directors and staff in a highly visual form of gap analysis. It can even be applied to specific products or used at a granular campaign level.
Marketing: A New DefinitionTuesday 07th July 2009 In its insightful and thought-provoking 'Shape the Agenda' paper, "Tomorrow's Word: Re-evaluating the Role of Marketing", The Chartered Institute of Marketing calls on marketers to re-examine how they view themselves - to challenge traditional norms and redefine where the profession is going. I applaud this move and have long advocated that a new definition of marketing should be developed, since the previous one, coined some 30 years ago, does not reflect the environment of 'business at the speed of thought' that the financial services industry knows today. The Institute's previous definition, defines marketing as "the management process responsible for identifying, anticipating and satisfying customer requirements profitably". My previous blog highlighted the shortcomings of this definition, which relegates marketing to a management process and does not encompass its wider role in the context of the organisation or bring stakeholders into the equation. The CIM's proposed new consultation definition reads as follows: "It does this by building brands, nurturing innovation, developing relationships, creating good customer service and communicating benefits." "By operating customer-centrically, marketing brings positive returns on investment, satisfies shareholders and stakeholders from business and the community, and contributes to positive behavioural change and a sustainable business future". It improves on the previous definition significantly by including shareholders and stakeholders, introducing the concept of value and giving direction in the ways a marketer may achieve positive returns on investment. However, a "strategic business function" could arguably be extended to encompass the entire operation. I believe that the fundamental role of marketing today is to create differential advantage. I have therefore joined the debate by putting forward a challenging new definition that explains the “what”, “how”, and “why” of marketing, introducing the concept of value and intellectual and emotional engagement: "Marketing is the conception, implementation and adoption of differential plans throughout the entire organisation to create market space - resulting in superior stakeholder value, mindshare and heartshare." Be THE Financial Brand!Monday 06th July 2009 Are you: A financial marketer? Why be A, when you could be considered THE? : THE financial marketer. What would it take? Would the claim fulfil our proven criteria of being remarkable, reputational, relevant and real?How could you re-engineer the organisation so that it would be all of those things?
Think about it from your clients' point of view. Why would you choose "A" lender? "A" is generic. "A" is me-too. "A" is one of many. "A" is just ok. "THE" is specific. "THE" is distinctive. "THE" is the one and only. "THE" is remarkable. "THE" commands share of mind and wallet - "THE" accountant who deals with all of our finances. "THE" bank that fulfils all our lending needs. "THE" leasing company that funds our fleet. Being "THE" is the THE ultimate test for the Create Your Own Space methodology and how you apply it to your business. So, I'll ask again... are you A or THE? Distinction, not ExtinctionSunday 05th July 2009 Here’s a couple of great examples where companies have set out to create their own space. What they have in common is they paint a picture within your mind as you read the quote. Strand Financial was founded to do just that for financial organisations - to help you create your own space in your market and in each customer's mind. Go for distinction, not extinction! Breaking rules for market spaceSaturday 04th July 2009 Market Standards are those conventions that we don't even notice because they are so familiar. That's those ready-made ideas that maintain the status quo. T. S. Eliot said, “It's not wise to violate rules until you know how to observe them”. Successfully smashing standards requires one or more of the following: knowledge, power, and tolerance for risk. To understand the existing market position is important. You need to know how to play an instrument well before you can improvise. You need to know the rules intimately to know how best to break them.
The Market Shift precludes conservatism. It doesn't settle for the safe and the predictable. On the contrary, the Market Shift stage is about all-out questioning, about developing new hypotheses and unexpected ideas. It is a journey into uncharted territory, a quest for angles of attack that have never been used before. Market Shift is the art to come up with better questions, to cross conventional boundaries and to overcome opinions and prejudices, which inhibit the creation of new possibilities and visionary ideas.
Low-level Market Shifts are those that result when attacking a convention leads to a renewal of the brand, not the market. The brand's place within a given market has been shifted as opposed to the displacement of the market itself. By contrast, a high-level Market Shift occurs when the company, by expressing a new vision, displaces the entire market. Creating a new Market Space. Where the client has room to grow – even more profitably. This stage is about all-out questioning, developing new hypotheses and unexpected ideas. A leap of the imagination from the present to the future. It’s where Strand Financial feels most comfortable. Do you?
Kick-start your brand - the 'Who are we?' exerciseFriday 03rd July 2009 It's easy to lose sight of 'who you are' as a financial organisation. As you take on new people, new clients, new channels, and possibly even become involved in mergers and acquisitions yourself, it is so easy for the Core Essence of your business to become lost and confused along the way. If you were to bottle what you have that is unique, distil it into just a few words, what would that look like? All you have is 25 words, then boil it down to just 2, yes TWO! They don't need to be clever words. They don't need to be designed as an award winning campaign at this stage. Don't put us out of a job! They just need to be the words that you most want to own in your customers' minds. Avoid generic terms, such as "professional", "quality", "reputation" and "best" and descriptive words such as "finance", "asset based lender", "insurance", "leasing" etc. As Ann Livermore of Hewlett-Packard said: "These days, building the best server isn't enough. That's the price of entry." So you really need to focus on what is unique. I'd like to take you through an energising exercise that you can do when you really get back to business after the holiday season. I call it "The Core" - It goes something like this:
(1) Who Are We? (in 25 words, then TWO words!) (2) List three ways in which we are unique (3) Who are THEY (our competitors)? (4) List 3 distinct differences between 'us' and 'them' (without becoming obsessed about them) (5) Compare the reactions from your team, your most friendly clients and here's the big one - your most sceptical clients! Finding it difficult to really stand out? Don't worry, you're certainly not alone - most companies find it almost impossible, without the kick-start of external perspective and facilitation. A Strand Financial 'Create Your Own Space' Workshop will help you identify what makes your business different from the rest and so much more. Don't be too competitor obsessedThursday 02nd July 2009 I was talking to a CEO of a financial organisation last week, when he told me that there was merely the width of a credit card between his company and the nearest competitor. “To grow", wrote W.Chan Kim and René Mauborgne in “Think for Yourself — Stop Copying a Rival” (Financial Times),“companies need to break out of a vicious cycle of competitive benchmarking and imitation. Aiming to beat the competition has the opposite effect to the one intended. It keeps companies focused on the competition. When asked to build competitive advantages, managers typically rate themselves against competitors, assess what they do and strive to do it better.” In 'A Unique Moment', Jesper Kunde said: “Companies have defined so much ‘best practice’ that they are now more or less identical.” When I first read Funky Business by Kjell Nordstrom and Jonas Ridderstrale one quote leapt out at me: “The ‘surplus society’ has a surplus of similar companies, employing similar people, with similar educational backgrounds, working in similar jobs, coming up with similar ideas, producing similar things, with similar prices and similar quality.” Some senior executives of financial organisations may not feel entirely comfortable in this area, but the ability to break through the brand proliferation and communications clutter depends on creativity and imagination - precisely the reason why Strand Financial exists. We bridge the gap between banking and marketing mentalities by optimising the financial value that brands bring to the business. How to Choose an AgencyWednesday 01st July 2009 Choosing the right agency to communicate your business edge is a tough call, particularly if you haven’t had to do it before or if your existing agency hasn’t delivered. Here’s Strand Financial’s Ten Point ‘How To” Guide.
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