A Memo to My Banker Friend
We have done quite a lot of work recently looking at what drives the growth of bank brands over time. While a huge amount depends on business fundamentals, like how well a brand can use technology to create a better experience, the equity drivers remain remarkably consistent with other categories. Why? Because banks sell to people just like other brands do although the product is intangible and may not be separable from the person offering it.
Millward Brown have lost count of the number of times that people have told us, “Yes, but my category is different”. And, of course, they are right, their category is different. The dynamics of the banking industry are dramatically different from automotive, packaged goods or even insurance. However, there is one thing that unites all these categories: their customers are all people, and often the same people. The power wielded by brands may differ from one category to the next versus the fundamentals of the business but that power will still rely on the thoughts, feelings and associations in the minds of potential consumers.
One thing is for sure, most people believe that choosing the right bank is important. Just like other categories, people’s choices are shaped by their predisposition. A bank needs to be considered before someone researches fees. The same interest rate may seem good for a bank that is trusted, but less so for one that is not. If existing customers are satisfied they are more likely to choose the same bank for other services. What is different about banking are the barriers to switching, people will put up with a bank they do not like simply because it is too painful to get approval for a new account with a different bank and to change standing orders and the like.
This means that it is really important to evaluate bank marketing campaigns across different customer groups: existing customer, banking but with competitor or likely to choose a bank for the first time.
Differences extend to other types of segmentation. Women are an increasingly important audience for banks but they respond differently to men when it comes to advertising. Banks need to do more than just take into account the needs of different groups but also tailor their campaigns to communicate effectively to the different audiences. Its important we recognize the level of sophistication of bank customers and dialogue with them on the relevant wavelength.
Banking is a vastly more complicated category than others but at the end of the day customers are still people with a widely varied set of needs and values. Marketing campaigns may take longer to impact performance but all the evidence we see suggests that the banks which manage to offer something meaningfully different and market it effectively are the ones which grow and make better profits. You know now why those buildings painted in grey and orange, white and red seems to have many patrons.
Kindly share your perspective with me. Michael Umogun (firstname.lastname@example.org / + 234 802 311 7969 / @michaelumogun )