Increasing The Market Share of Banks and Credit Unions

Change is everywhere

The banking industry is going through another of its transition periods as banks come to understand that they are more closely aligned with the service sector than they are with the financial sector. The stakes for success are high and the losers will eventually fail. The trend towards consolidation is continuing and, increasingly, large banks are looming on the competitive horizon. These larger banks have immense marketing budgets to wield and their national advertising provides them with greater local awareness than even the most established community banks.

Therefore, one would think that the largest multi-state banks would hold an insurmountable advantage in gaining new customers and growing market share. The evidence, however, would point to a different conclusion. Had any bank broken through the awareness barrier with important meaning to the prospective (not the current) customer base, then it would not be necessary to build a branch on what seems like every street corner. The Current Market.

Why You Must Brand Things Differently

The reason to invest in a brand to grow a bank's market share is to protect banks against the tremendous capital expense of putting a new branch on every corner. Such a banking brand would allow them to attract new customers when they are not necessarily the most convenient. The reason few banks have been able to win the battle for the wallet (which is in fact a battle for importance on an emotional and intellectual level) is telling.

Advertising does little to differentiate one bank brand from another and they seem to dwell on category-wide benefits. While it may actually matter (according to your market research) to a potential banking customer that your bank is: convenient, has many ATM machines, competitive rates, "free checking" (we have even seen promises of "SUPER FREE CHECKING"), friendly service, and that you are "small enough to care - large enough to meet your needs," all of these attributes are banking category table stakes. Current advertising does little to differentiate beyond corporate identity.

You Can't Win With Table Stakes

You cannot be a BANK (or Credit Union) today if you are inconvenient, have few ATMs, unfriendly service, expensive checking, and are "too large to care and too small to meet your needs." We cannot find any bank or credit union that advertises these deficits and your potential customers have a right to believe that banks are in fact, all, pretty much the same. So, left without REAL choices, consumers choose by convenience and locations -occasionally word of mouth reputation, and, most importantly, when they are fed up with their current bank.

Be More Important

Changing banks or credit unions is a first rate hassle for your banking customers and unless they have relocated, moved, changed jobs, or been royally "P-Oed" at their current bank, they are likely to stay put. If you want to win in this market space and increase your bank's market share, you need to target those that are already looking to switch banks because of one of the above reasons. You must also stand out in their minds, above their considered set of banking choices, to win.

This means that banks and credit unions need to know their potential banking customers better than banks currently know them. Your market research that tells you that they value convenience and 'free" is not doing enough to help you increase your market share. You do not need research to know this. It is a consumer trend that transcends your banking category and it does not tell you how to be different and better (as a bank brand) which is the hallmark of a brand that steals, grows, and increases market share.

Your Bank Marketing Success Is Dependent on Your Strategic Brand Work

We are not talking about your bank marketing and financial advertising failings, we are talking about the DNA of your bank brand that pre-determines how effective your advertising will be because it provides the fundamental permission for your bank or credit union to be important and believable. It is this essence that will make everything you market more effective.

Without such a fundamental brand change, the only answer to your quest to increase bank market share is to build more branches, spend more on advertising, and buy up more bank competitors. Costing capital that many banks do not have.

Understanding "the switcher" is key and you need to understand the thought process that propels bank customers to switch. We build decision trees to accomplish this so that we anticipate all of the internal questions that the bank prospect makes when they consider switching bank brands. We then address those issues in the brand definition of the bank, being careful to note the important questions that self-identify the customer.

It is these questions that illuminate the bank's brand because your brand is not about you, the bank or credit union. Your brand is all about the customer. If they can find themselves as a part of the brand, sharing their core beliefs, values, they will prefer you and you will increase your market share. Opportunity is always found in the belief systems of your target audience.

The ways in which banks and credit unions speak of their brands today does little to create preference. Bank of America, Wells Fargo, BB&T, First Trust, Wachovia, RBC Centura, PNC, and Sun Trust all appear as the same to potential customers. Real opportunity to increase bank market share will be found when bank brands define themselves in terms of the customer and not in terms of their own offerings and services.

As long as banks and credit unions continue to see themselves as banks and not extensions of their prospective customers then your only option is to put a new bank branch on every street corner in America, wasting valuable capital and resources that may ultimately place your institution at a competitive disadvantage. 

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