Bank branding. A market study.
A fresh look at bank branding and the bank market
Bank branding and marketing have changed
Since the existing banking category market study was conducted some time ago, the landscape has consolidated into conglomerates gobbling up other conglomerates.
Yet, in some ways, it remains the same. The bank branding market landscape looks different today in 2018, as acquisitions wiped the scenes clear. But little else has changed.
What has not changed is the stunning similarity of their messaging. All of them still market the table stakes. These include, having many ATMs, keeping your money safe, being convenient, having online and mobile banking, along with low fees and better rates.
Bank branding table stakes don’t create preference
From the point of view of potential customers, bank advertising remains just noise that does nothing to create preference.
Even by acquiring a unique brand like WaMu (which in terms of attitude and tone was on the other end of the spectrum from Chase), Chase remained “Chase What Matters.”
It’s an overly clever line. Feels written on Madison Avenue. And is, therefore, not believable.
In 2018, Chase switches to the theme of “Make More of What’s Yours,” which is at least about the customer, not the bank. However, it’s simply the reason why you choose a bank, not why you’d choose Chase. There’s no emotional element in it. It’s like a fast food restaurant saying, “We Have Food.” All banks have interest rates for their savings and other accounts. Who cares?
A Table Stake
That’s just a table stake. And table stakes, what you need to just play in the game, still take prominence among most all bank brands.
It was the same with the Wells Fargo-Wachovia merger. Wachovia was the king of an undifferentiated brand. Only a “Wells Fargo Company” listed near the bottom in red in their marketing showed any differentiation.
TD Bank is growing
TD has swallowed up Commerce by carrying Regis & Kelly over into the acquisition and, while it has a nice feel, it didn’t create preference. (It is true, TD Bank does look different, however, but it’s messaging around ease-of-use and convenience doesn’t differentiate.)
Thank God TD competes with BB&T because BB&T also has nothing important to say.
Some claim to have gone through rebranding. But, bank branding as a practice is so bad that all they get for their investment is a new color palette and a TV campaign.
A wasted opportunity
Anger from the financial crisis was an opportunity for bank brands a few years ago as we stated this in the original study. Consumers were emotionally raw. (Let’s not even get started on the failure of credit unions.
They are still stuck in the same stories they’ve been peddling for decades.) In all the bank branding efforts out there, we could only come up with one bank that tried to take advantage.
That is, SunTrust, a regional bank with locations in the Southeast. Its theme line of “Live Solid. Bank Solid” was a reaction to overspending and making bad loans.
And, suggests a feeling of comfort. (“Comfortably,” by the way, would have been a better marketing word than “Solid.”)
However, our research shows banks overused “safety” in the financial crisis. It wasn’t a switching trigger nor was it emotional.
Even the Wachovia customers felt their money was safe despite the Wells Fargo takeover. They still had their money.
Imitating the market leader only helps the market leader
It’s a truism of any industry. If you copy the market leader (because you say, “Hey, it works for them!”), you only help the market leader grow share. Facing similar messaging, target audiences default to the market leader because there is no other true choice.
Interestingly, during the crisis, the only one attempting to reflect the target audience was the then market leader, Bank of America.
The banking giant went through its own evolution (we would not call it a bank branding effort). It changed its primary color from blue to red because the entire market was blue.
Kiefer Sutherland’s “The reflection of Americans” lacked importance.
Today, Bank of America defaults into marketing online banking, reward cards and other table stakes. But its position of “Better Connected” speaks to what we want from banks.
It’s not emotional enough. But when the market leader has the best bank branding, that spells doom for the rest. A market leader owns table stakes as a defensive posture.
Can’t grow market share by copying B of A..
You would assume that, with all the turmoil surrounding bank branding and the banking industry, smaller regional banks and local credit unions would be making hay on all the anger and discontent.
You would be wrong
Banks continue to wallow away in what they “believe” differentiates them: Knowing your name, being friendly and being local.
Two things are wrong with this bank branding approach. First, it assumes that those that bank elsewhere find the employees unfriendly and treat them like a number.
Research tells us that nothing could be further from the truth. All banking is local and the relationship is ALWAYS with your local branch.
Confusion among bank messages
Secondly, they confuse those values with the triggers that cause a customer to switch. In fact, they are neither rare or terribly important as switching triggers.
Opportunity still exits for a revolutionary bank branding effort. Citibank, for example, has an opportunity it hasn’t nabbed – but time is running short.
The biggest players will continue to look to acquisition as the only way to grow, instead of doing the smarter and less costly chore of creating brand preference.
Stealing Share will continue to update it as changes happen among the brands. So, let’s see what they were doing a few years ago and what they’re doing in 2018.
More Trouble Ahead for Banks
Bank branding is in tough times. Certainly, the mortgage crisis has passed but the greed of shareholders continues to embolden short-term thinking.
Is another fundamental problem looming on the horizon? The answer is a resounding yes. The banking industry rebounds and everybody’s happy, right? Not exactly. For one thing, banks are facing much different challenges than they were facing years ago.
Does Safety have legs?
Safety, once a boring table stake, isn’t so boring. Getting your account hacked is a true fear. It happens to people every day.
Sometimes, it’s the bank doing the hacking. The Wells Fargo scandal, in which the bank set up accounts without customers’ knowledge, brings back the mistrust factor.
Everything’s changed. And, nothing has. Bank branding still lacks emotional context, with everyone using the same messages. It’s just that those messages have changed. Reward cards. Mobile banking.
Making things easier. All good values for banks to promote, but nothing that provide differentiation.
No Bank Branding Differentiation
We conduct marketing research all over the globe. We evaluate brand meanings, preference, loyalty, switching triggers and equity. These are the starts to brand building – and the answers we are hearing are the same.
The banking industry is in desperately bad shape. The bank branding out there today is all the same. No major bank has differentiated itself from the competitive set. As you’ll see, it’s shocking how similar the messaging is between the market’s players.
Banks are satisfied to spend recklessly on ineffectual advertising. This does nothing more than build a bit of awareness. It builds no preference.
There is no battling for customer loyalty based on definitive brand practices that create preference, As the chickens come home to roost, we can expect shareholders to hold these banks accountable. They spent huge sums on advertising and will demand some return on that investment.
Bank Branding Today, and Always It Seems
Consider the typical bank advertising you see every day. Most advertise to gain access into a new customer’s considered set of banking choices.T
They seek to create awareness in prospective borrowers and savers.
Then, instill in them a preference of a bank over the competition so that bank can attract assets. Banks are hopeful that a potential customer will leave their current bank, switching or adding, for example, checking accounts.
I guess the banks are thinking?
The thinking is that most banking customers consider their primary bank to be the one in which they currently maintain their checking account.
Once the bank has your primary checking account, it attempts to strengthen that relationship by gaining more “share of wallet.” They try to establish other types of accounts. Offering CDs, savings, securities, credit cards, mortgages (gasp) to all manner of personal and business loans.
What Banks Need to Consider
This requires that you know and understand the answers to three questions about the target audience you wish to influence.
Questions needing answers
- What constitutes the prospects’ belief systems? How can your brand best reflect the values and precepts of that target audience?
- What is the highest emotional intensity in the category, often represented by a key switching trigger?
- Who does the customer aspire to be and what are they most fearful of?
You will notice that the subjects of all questions are customers, not the bank and its services.
This is the foundation of bank branding. Because, in commodity markets, it is impossible to differentiate yourself based on product or service alone.
In other words, you can’t grow a bank’s market share by “out-banking” a competitive bank.
You need to instill the prospects’ self-description into the brand so powerfully that they are in fact choosing an extension of themselves rather than a brick and mortar bank. The key to successful bank branding is alignment with the prospect.
Banks Only Sell the Process of Banking Itself
So, what do banks tell you today to influence loyalty and get target audiences to switch brands? Well, as you will see, they promise that they listen to you.
They promise rewards, ATMs, competitive rates, friendly employees, convenient hours and locations. And now they promise that you can do everything from the phone and that your money is safe. These are simply descriptions of what it means to be a bank.
We have the banking research
Research proves that most people bank online or through mobile. How do you measure one bank’s online/mobile abilities over another?
You don’t know until you sign up. How do you know if one bank is more secure than another? The only way to choose now is through brand. Otherwise, the market remains stagnant. For target audiences, a feeling of inertia sets in.
Where’s Preference Coming From?
A bank’s first house of cards begins to tumble when shareholders asked the bank how effective are the marketing dollars? Is it creating preference?
Shareholders demand greater accountability. Bank branding is coming face-to-face with the fact that their marketing of brand preferences is a figment of their own imagination. Preference is habit, family connections and the odd promotion or two.
How banking customers choose
Location and convenience were once reasons to choose. In the absence of any demonstrable differentiation or preference, banks have traditionally invested in bricks-and-mortar.
Their asset deposit growth only fueled by building more branches. Therefore, growth is categorized into more locations (organic growth) and acquisition (fiscal growth). Both without brand preference supporting them, are disasters waiting to happen. Branches have become the most expensive billboards in your city.
More Branches is not the Future
Currently, real estate and construction costs are the bank’s greatest investment and resulting main asset.
Research demonstrates that customers, who have developed very little brand affinity with any major bank, are hoping that they will never need to visit a branch or ATM.
They want to conduct their financial business with a debit card, direct deposits, mobile banking and direct bill pay.
A bank’s main asset quickly becomes its greatest liability. Bank branches simply becomes an expensive and cost-wasting expense rather than a place of needed financial transaction. All the investment in branch amenities, teller pods and meeting rooms transformed the habitat of dinosaurs.
Major Changes Take Effect
Such pronouncements of doom? Heard it before. But they are already here. As we stand here in 2018, consumer visits to a bank branch are expected to drop 36% over the next four years with mobile transactions increasing 121% over that same period. Ignoring this trend is as foolish as offering interest-only home mortgages and ARMs ten years ago.
This is the next shoe to drop and the general population cannot wait to rid itself of the need to visit a bank, and most have already done so. It is simply an inconvenient necessity.
Bank of America
First, the main advantage is the name. Bank of AMERICA. However, you could name a bank the Bank of Dirt and it wouldn’t matter without meaning. So, what does Bank of America mean? Well, being one of the market leaders means you are among the default choices. Especially in a market with identical messaging.
While Chase and Bank of America are in a dead heat per total assets, five banks hold 40% of all deposits (Chase, Bank of America, Wells Fargo, Citigroup and US Bank) in the US during third quarter 2017.
Banks should try to have some imagination
It’d be nice if they could differentiate themselves from each other. Or, if any of the other banks would break themselves from the pack.
For years, Bank of America stood as the Bank of Opportunity, which fit nicely with its name. As mentioned earlier, it now sports “Better Connected.” It is a defensive position because it speaks to the new way of banking.
Bank of America has nothing much to say
But without any emotional appeal. It’s a defensive position because its primary competitors (the Big Five) are also landing on connectivity, or least the table stake of mobile banking.
Therefore, for “Better” to work, consumers would have to believe the others fail at connectivity (mobile banking).
But everyone highlights an app. We’re all connected to our bank accounts with a simple tap on our phones. And defensive posturing isn’t enough to steal market share anymore. Brand needs to be about your prospect.
“Market Leader” is not much of a brand position
For years (decades even) being a Bank of America customer meant being associated with a winner. The sole market leader. That’s not the case anymore. With consolidation, Wells Fargo and Chase are just as big and own just a large of presence. Most of Bank of America’s marketing messages today are attempts to sell category table stakes.
The old Bank of Opportunity bank is now just a bank with credit cards, many locations, ATM Machines, online banking, and investment services. And an app.
Now we’re going to sound repetitive. Because, as we’ve seen with Bank of America, the response to the changing banking environment is to go all mobile advertising on our asses.
So, banks strain finding ways to explain why their mobile banking is better. Bank of America has “Better Connected.” Now comes Chase with “Make more of what’s yours,” which doesn’t even make much sense.
Chase. (Morgan Stanley Chase)
We presume it’s just that you can DO more now that you bank with your phone. (The ballet leap is meant to be aspirational.) More promisingly, the current campaign encourages you to log onto a URL with WayYouBank at the end. That certainly speaks to the process of how you bank. Type in the URL and the message is a bit stronger. “Save time by banking from almost anywhere.”
That touches on what bank customers really want. Simplicity, speed and no fuss.
But scroll down and you see this headline:
Wow. So, Bank of America’s “Better Connected” isn’t all that unique. Of course, Chase isn’t using it as a theme, but you get the drift. “Stay connected” develops into the go-to message for ALL banks.
With that in mind, why would anyone switch? At least Chase dumped the overly clever theme, “Chase what matters.”
On its surface it purports to be the promise of “The Company You Keep” (from New York Life). But here the word play became just plain trite. By including the corporate name in the theme, Chase reduced it to a Madison Avenue substitute for a strategy. It has raised barriers to sincerity.
Why what Chase embraced is bad
In fact, one word about cleverness. If you go to an advertising agency for brand work, you get clever. And, clever is your bank branding enemy.
It feels written by an advertising agency. Not in spoken language. (That’s one of the few positives with “Make more of what’s yours.” While it could lose the rhyming scheme, it’s at least closer to spoken language.) Therefore, it becomes harder to believe. It’s ignored.
If there was one brand that desperately needs to address security, it’s Well Fargo.
Not because of the hack. But, breaking the public trust. The Wells Fargo scandal didn’t go quite far enough for brand repair, but it needs addressing.
So, what’s Wells Fargo doing? As you’ll see in the ad below, they went the technology route, throwing security features like Eyeprint ID into it to strengthen its case.
Is it smart branding?
Is it effective? Not really and there’s a simple reason why. Being the best in security (a dubious claim if there ever was one) simply doesn’t fit the West Fargo brand.
For years, the bank diluted its equity markers by making their tag line trite and a bit tongue in cheek. “The Next Stage” reminded us that we are moving ahead.
And, intended to reinforce the brand equity marker of the Wells Fargo Stage Coach.
We see no brand equity. Except familiarity.
In our market research, however, Wells Fargo returns no significant brand equity, in that it was not associated with any important precepts and excites no switching triggers.
However, it did return strong signal equity in that its customers and their competitor’s customers alike recall the stagecoach.
No real value was associated with it. But, it was recalled. To everyone, Wells Fargo was simply a bank. And, unfortunately their brand does nothing more than reinforce that claim.
Wells Fargo could own heritage
Today, Wells Fargo uses “Building better every day.” We’ll give you 50 guesses what that means in terms of banking, security or, most importantly, what emotional trigger it addresses.
And we’ll get back 50 different answers. The bank could claim “Building better every day” means increased security, but it lacks any real emotion.
For it to be a switching trigger, it needs to hit you in the gut. Needs to be powerful. This just falls flat.
Boy oh boy. Here is Ground Zero for where bank branding stands now.
Few banks have run through more brand positions than Citi, with widely varied success. Here in 2018, it settles on “Welcome what’s next,” which is ALL about mobile banking and technology.
True, that’s what banks are becoming now. A virtual bank. The key to making “Welcome what’s next” work is in how Citi fulfills that promise. How does Citi fulfill it? Like everyone else, through a secure app.
Citi once owned something of value
Curiously, Citibank once held an astounding brand promise many years ago when it promised that customers who bank with them “Live richly.”
That position carried many of the important qualities of an effective brand theme. First, it was about the customer, not the bank. Secondly, it was just awkward enough to make target audience stop and notice. And “Live Richly” spoke to an aspiration.
A few years later, the bank rolls out “Citi never sleeps.” It accurately stated Citi continues to sleep-walk. Citi decided that “Live richly” was just a tagline, not a brand promise. “Welcome what’s next” is better than “Citi never sleeps.” But, it’s a theme for the entire banking category.
We interrupt examining the nation’s largest banks by analyzing SunTrust, a Southeast bank headquartered in Atlanta.
It still ranks in the top 20 largest banks in the nation.
But, has long been one of the industry’s most confused brands. It rebranded a decade ago, trotting out banal messages like “How can we help you?”
Then promptly telling audiences one way it helps is by asking you to use their credit cards more… “Use your card more, you get a chance to win miles every time you use it.”
Different by being the same
In bank branding, this is a textbook example of branding yourself as a commodity. Today, its mission is “Lighting the way to financial well-being.”
Whoa. Boy, that just hits you in the gut, right? Sarcasm aside, it represents a typical bank branding effort. The use of “Lighting” plays off SunTrust’s logo and name. But it just comes off as clever and, if we’re honest, completely forgettable.
So, just when we were going to either make ridiculous fun of SunTrust or simply exclude it from this study altogether, its OnUp campaign shows up.
Where is the emotion?
This campaign attracts our attention for a few reasons. On the positive, this ad is EMOTIONAL. It plays on the fears all of us have about our financial lives.
Not just our future, but what’s happening to us right now. Yes, we consider our futures every now and then, but it’s only human nature to think about the present.
Humans, at their core, are selfish creatures. We first consider how events affect us and the present is always the most urgent in that context. In addition, the tone of this ad is perfect.
The ticking clock sounds eerie and works powerfully with the images. The narration still says, “Lightening the way to financial well-being,” but it’s de-emphasized.
But…there is a downside
On the negative, SunTrust brands this effort as the OnUp movement. Why brand it? Why not embed it into the SunTrust brand?
What if being concerned with the here and now identifies the SunTrust customer? Branding it as a sub-brand makes it feel like marketing, less believable and temporary. Now, the only believable thing about it is that OnUp will go away at some point because it’s not about the SunTrust brand.
If it was, then audiences would feel it’s a permanent movement on SunTrust’s part. The bank really blew an opportunity here, one that could steal market share and shake things up.
But it got too cute, listening to marketers wanting to show how clever they are. So, no, this movement isn’t permanent. But “Lighting the way to financial well-being” is. Thank God for that, huh?
Here’s another Southeast regional, headquartered in North Carolina. Let’s be blunt here.
With the market leaders espousing the same messages over and over, the regional banks reside at the front porch where the door is wide open to be different. All they must do is walk in.
That’s why it’s so flummoxing that Banking and Trust Company (BB&T) simply stands there. It is the blandest and expected brand in the market.
BB&T is also hard to figure out
It confuses expansion and growth with brand success. BB&T has not differentiated itself from any of its competitors and instead has satisfied itself by building more branches and locating them across the street of its many competitors.
What this says is that they fundamentally understand that they have developed no brand preference. And, if they are located more than 300 yards up the road from a competitor, they will lose business.
Here’s the disconnect. BB&T is the 15th largest bank in the US by total assets. Yet, it owns sixth most branches, with more than 2,000 in just 17 states.
BB&T is a BIG bank
It has more than double the number of branches than Citibank. How does BB&T even remain profitable? In today’s landscape, in which customers dread walking into a branch, what kind of nonsense is that?
Well there’s this nonsense. This may simply be the most generic bank advertisement you’ll ever see. What’s it about? Um, banking? What’s the promise? Uh, focusing on the customer. “All we see is you” is just another way of saying “We focus on you.” It’s the most overused value, phrase or slogan in advertising.
There’s even a cleaning company in Allentown, Pennsylvania, that uses it. Hell, you could substitute a few words here and there, and it’d fit right into BB&T’s language.
Growing market share in banking
Remember the key questions to grow market share:
- What constitutes the prospects’ belief systems and how can your brand best reflect the values and precepts of that target audience?
- What is the highest emotional intensity in the category, often represented by a key switching trigger?
- To what does the customer aspire and what are they most fearful of?
Banks see things from the inside-out
BB&T wants us to believe that the beliefs of the target audience are how much we care about BB&T. We can tell they want our business.
As far as key switching triggers, BB&T believes they are trust and contact with human beings. The problem with this thinking is that most everyone we survey already believes that their bank is trustworthy.
We have a rule for this: Don’t ever believe your own internal press. All that really matters is what the customer believes to be true. What you believe to be true does not matter. Belief controls preference, even if the belief is false.
USAA bank plays emotionally
More than a bank, USAA is a full service holding company with everything. Investments, banking and insurance.
Looking like a credit union, USAA grabs the emotional intensity of membership. Membership in the US military. By all counts, the highest emotional intensity for that target is exactly that. Of all the banking brands, USAA does it right.
“We know what it means to serve” is more double entendre than the brand deserves. But, for this target audience, most sins are forgiven
A few more banks
Bank Branding End Notes
There is more opportunity in the banking market today than in almost any other industry. The major banks remain undifferentiated and deliver little to no brand meaning.
Even Bank of America looks vulnerable. Like B of A, banks currently define themselves and their brand in terms of commodity products. And they expect customers to switch banks so that they can have “all the things they currently get from their current bank.”
A bad category speaks opportunity to the savvy
The ability to impress customers with convenient locations and spiffy lobbies is becoming less and less important, especially as technology improvements allow customers to never go to the bank.
The banking industry needs a new and more vital brand strategy to deliver importance. Importance is directly connected to how much the brand reflects and speaks to the customer. And not how much the brand speaks about the bank.
Who Is to Blame?
Are banks responsible for the brand mess they are currently in? Sure, they carry responsibility for thinking that “if you build it they will come.”
That same thinking is leading them to more problems in the very near future. If they continue to behave and market themselves as if they are commodity banks, the target audience will continue to think that way until a competitor wakes up and wins. When that happens, the other banks will fight for the crumbs.
Banks need a new brand promise. One that is a reflection of who the target audience aspires to be. And positioned against the competition. The problem now is that the players in the market say the same thing. So, they are not positioned against anybody.
Take the test
Is it as bad as we have said? Take the test. Take any bank you can think of and insert its name here-
- (Insert Bank Name Here) has many ATMs
- (Again) has convenient hours and locations
- (Once again) has free checking
- (One more time…) has friendly employees, online banking, credit cards, gives you more, really wants my business and has competitive rates
These times are an opportunity for any bank that can get out of their own way, but they must be willing to change. Soon, it won’t matter if banks are not willing. Change is already coming.