Branding & Banking: The Type of “Service” Your Customers Are Really Looking For
Digital Innovation Depends on the Efficacy of Your Brand
In my last post, “Branding & Banking: Driving Differentiation in Heavily Regulated Categories,” I wrote about how a value-based positioning approach could drive profitability, loyalty and an unassailable long-term competitive advantage in the heavily regulated and nearly commoditized financial services category. In response to my article, a bank CIO reached out to me with some perspective that I thought was quite insightful.
The gentleman agreed that the post tackled the pivotal issue dictating a financial institution’s survival. He went on to talk about a recent presentation he gave to a board of directors on digital transformation. In his presentation, he argued that it’s vital to have all the functionality and ease-of-use that customers will demand (as well as a holistic technology roadmap); however, branding, value proposition and emotional connection are the real factors that will determine their level of success. His ending statement… “this is a dangerous territory for us all.”
From Digital Transformation to Service Transformation
As I sat back lamenting his point of view regarding digital transformation and the role of the brand, I was struck by another realization as it relates to how financial service brands create value. More specifically, this issue is being exacerbated by the fact that so many institutions are resting on better service as their brand’s value, but neglecting to realize “great service” is also going through a state of transformation.
People aren’t impressed by a handshake and a cup of coffee any more—yes, I recently heard a bank touting those words in a radio ad—but rather, they’re looking for full-service assistance with major milestone decisions and purchases. For example—and I think we’d all agree—purchasing a car can be intimidating and quite costly if you don’t negotiate properly. So, why not leverage the trust you have with your customers to add more value by offering non-traditional services like USAA has? USAA has introduced an online car buying service to help members find the right car, dealership and price, secure financing and insure the car. What an amazing offering. Yes, it includes services that are outside of a bank’s typical offering, but they see the bigger picture. They saw an opportunity to help their customers in a unique way, which would ultimately make their customers far more dependent on them for future decisions.
The psychological impact of this is significant and can be felt across many critical success metrics. But it shouldn’t stop there. What about home buying? USAA also connects home buyers to moving services, homebuilder discounts, cable and utilities providers, and of course home financing and insurance. Would that be of value to your customers? Of course. Do you have the resources to pull it off at a high level? Maybe. Maybe not. Either way, you may not have a choice. As the gentleman who commented on my previous post so astutely said, “this is a dangerous territory for us all.” Because, as others move into this territory, your ability to surprise your customers with great products and services becomes weaker and weaker.
The truth is, people don’t separate their financial life from the rest of their life. It’s all intertwined in a mess of trade-offs and compromises, and yet most financial institutions expect their customers to compartmentalize their priorities. It’s mind-blowing, because there’s so much more potential business out there for banks if they would just start thinking beyond their own walls.
If your organization is struggling to create meaningful differentiation and growth in the marketplace, perhaps it’s time to think about an innovation strategy. At BVK, we help banks and other financial institutions shift their growth strategies from a reliance on often overlapping and easily copied marketing claims, to core values that create unassailable long-term competitive advantage. Embodied in this approach is an emphasis on Insights, Innovation and Impact that can form a basis for market differentiation and profitable business growth.
Kevin Steltz and Mike Eaton lead brand and business strategy planning and operational alignment for BVK clients in the financial services sector. For more information about our approach please respond to [email protected] or [email protected].