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Archive for the ‘Brand’ Category

As Crain’s Chicago Business reports, Banco Popular is testing a potential name change in the Chicagoland market in an effort to shift perceptions and appeal to non-Hispanic market segments.  According to the report, “Manuel Chinea, senior vice-president of retail banking operations at Banco Popular North America, says the current name makes many non-Hispanics believe the bank isn’t interested in their business.”  The bank will introduce the new name, Popular Community Bank, at its 14 Chicagoland branch locations in August.

While appealing to a broader audience appears to be the primary reason for the name change, the change is not without risk.  The name change could drive current customers away.  It may not be enough to attract a significant number of new customers.  It will likely dilute the bank’s current brand position.  And, in today’s marketplace – with so many name changes, mergers, and acquisitions – the change may raise questions about the overall condition of the bank.  The effort begs the question: Is the move from a different and recognizable name to a more generic and unremarkable name really what’s needed here?

In some ways, it feels like Banco Popular is looking for a quick fix with this effort.  A name change alone isn’t enough to completely shift perceptions.  Rather than focusing on the name change, it seems that the bank would be better off focusing on messaging and outreach targeting non-Hispanic customers.  With or without a name change, the bank’s marketing efforts will need to act as a driver in creating or reshaping peoples’ perceptions about the bank.  The name change seems like an unnecessary (not to mention costly, with the proposition to change the name at 97 branch locations) addition to the mix.

It sounds like Banco Popular expects to make a decision about whether the new name will be rolled out across the entire network after about six months of testing.   In the meantime, it will be interesting to see how the bank’s campaign supports the effort, how it’s received among Hispanic and non-Hispanic consumers, and perhaps most importantly – how the bank introduces and delivers a brand position that appeals to such a broad target.

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An article in this month’s Fast Company magazine introduced me to Mango, an Austin-based financial institution that “lets people without a bank deposit checks, talk finances, and withdraw money – without ever opening an account.”  With the tagline, “the fresh way to manage money,” Mango has launched a business that stems from a simple core product: The Mango MasterCard Prepaid Card.  Perhaps the biggest difference between Mango and other financial institutions is the fact that a traditional bank account is not required.

Unlike many other prepaid cards, and as Mango’s tagline suggests, the card offers options in terms of money management.  According to the institution’s website, card holders are able to load money to the card from direct deposit, a bank account,  Green Dot MoneyPak (available at retailers nationwide), with a smart phone, and online from other Mango card holders.  Card holders can manage their accounts online, by smart phone, or at a Mango Money Center store.  Beyond the prepaid card, Mango is also offering a savings account offering 5.1% APY.

Based on the Fast Company article, it’s evident that Mango is focused on the customer experience.  According to the article, “rather than treat the unbanked as transient customers, Mango aims to forge long-term relationships.”  The article also discusses aspects of the branch, like the clearly stated fees presented on the wall or the self-serve kiosks, that contribute to this experience.

While Mango may be targeting people who are otherwise unbanked, it will be interesting to see if the business model attracts others who do currently have bank relationships elsewhere.  According to an article in this week’s MarketingDaily, and a Mintel Compremedia study, 19% of consumers expressed interest in using prepaid cards to pay bills, as prepaid cards would allow them to avoid overdraft fees.  The article goes on to say, “Of even more concern for banks is that the percentage of those willing to consider the prepaid cards increased among the affluent. Of households earning more than $100,000 a year, 25% said they would be interested in prepaid cards as a bill-payment option.”  Perhaps Mango will appeal to part of this group as well.

With Visa also launching a new prepaid card campaign, not to mention the variety of other prepaid card options currently offered by financial services companies, Mango is certainly not alone in this effort.  However, Mango’s approach – a business centered on the prepaid card – may prove to be a viable and sustainable business, especially in a post-recession marketplace.  As Mango gains traction in Austin, it will be interesting to see if it moves into other markets, expands its product line, and if its customer base becomes a mix of unbanked and banked customers.  I’d be curious to hear from anyone in Austin about the local marketing efforts and the actual in-store experience.

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Remember all the buzz about MySpace? 

Since sometime in 2007, when MySpace was on the minds of so many marketers, the popularity of MySpace among financial institutions has obviously gone downhill.  Some marketers have migrated to Facebook and/or Twitter, and some seem to have abandoned social media all together.  While the conversation about social media continues to be a hot topic, I haven’t heard about any financial institutions that have recently launched, or are planning to launch a MySpace page.  The conversations about MySpace aren’t happening anymore (if they are, let me know).

It raises the question:  What happened to financial institutions using MySpace?

Searching MySpace for ‘bank’ or ‘community bank’ doesn’t return many/any relevant results.  In searching for ‘credit union’, however, MySpace returns 151 results – many of which appear to be actual credit union or credit union related MySpace pages. 

One of MySpace’s most interesting features is the ability to see when a person/company last logged-in to their account.  While the search for credit unions returned quite a few existing credit union pages, many are no longer active – it seems that many have simply been abandoned.  A few examples:  

While there are some credit unions that appear to be actively using (or at least checking) their MySpace pages (like Lancaster Red Rose CU, Meadville Area FCU, and Cal State LA FCU), most institutions appear to have gained little traction with their pages.  This is reflected in the few posts and friends, and time since last logging in.  And instead of deleting their accounts, many have opted to simply walk away – leaving behind evidence that suggests a failed effort.

If you have an inactive MySpace page, it’s time to take it down.  It reflects poorly on your brand to have an outdated and inactive MySpace page.  Social media is meant to be a two-way conversation; if you’re not contributing the the conversation through the site, there’s really no point in keeping the page alive.  Until you take it down, it will continue to show up in search results, people will continue to visit the site, and it will continue to shape peoples’ perceptions about your institution. 

I’m sure there are a number of reasons why the pages were abandoned.  Among these, I would expect:

  • There were no goals established before launching the page. You can only walk aimlessly for so long.
  • People simply hopped on the MySpace bandwagon.  When the excitement died, so did the effort.
  • Social media efforts take more time and resources than expected.  They aren’t ‘free’, and at some point (likely around that last log-in date) someone probably wanted to see evidence of a return on the invested resources.
  • The person responsible for the site no longer works for the institution, and didn’t bother to remind their colleagues about the site.
  • Facebook and Twitter are ‘cooler’ than MySpace.  Some of these institutions have probably reallocated their social media resources to these two platforms – which brings us to an important question:

How many financial institutions will abandon their Facebook pages and Twitter accounts in 2010?

For the same reasons outlined above with MySpace, I’d expect that we’ll see quite a few financial institutions abandon their Facebook pages and Twitter accounts in 2010.  While many institutions are using these two platforms in clever and effective ways, others are not – they’re not gaining the kind of traction necessary to generate results.  In fact, I wouldn’t be surprised to learn that some institutions’ social media efforts were canned at the end of 2009 after not showing any return on investment. 

It will be interesting to look back on the year and see if there’s any evidence of this.  I wonder if any industry trend analysts are tracking the number of shuttered Facebook and Twitter accounts alongside those that are launched.

To those institutions still thinking about entering the social media arena, learn why you don’t need to be on Facebook, and you don’t need a Twitter account.

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We’ve heard quite a few stories this year about institutions opening branches in local high schools as means to better serve and attract younger consumers.  When I read an article about Bucks First Federal Credit Union’s ($88 mil. / Bristol, PA) Palisades High School branch in Kintnersville, PA opening last week, I didn’t think much of it.  But I was intrigued by the photo of the branch included in the article – namely, the paint splatter behind the teller line.  A quick search revealed that Bucks First FCU has an extensive Generation Y initiative despite the fact that it only has two branch locations (other than the high school branch).

The initiative is called Project: Flipside, with the tagline “the alternative to doing nothing”.  There’s a great corresponding website: www.projectflipside.com complete with a blog, contests, events, financial education (cleverly positioned as ‘the alternative’), and a savings/checking account appropriately named the flipside account.

The website is simple and straightforward, and a welcome relief from the flashy and often times overwhelming websites that we’ve become used to seeing in efforts to target Gen Y.  This site comes across as authentic – written by people who are somewhere between 16-25 for their peers in the same age group. 

While there are some similar elements to this campaign as we’ve seen with others (i.e.  a branded car that visits sponsored events, a contest to select representatives of the campaign/spokespeople, and Facebook/MySpace/Flickr links), there are some interesting and different points about this effort worth noting:

  • There are three representatives for Project Flipside – known as the ‘crew’
  • The blog posts aren’t limited to financial advice, tips or product related information.  This blog includes a variety of topics from funny random videos to some that hint at financial related material.
  • The site has an easy contest for a $25 gift card: simply submit your name and email

Perhaps the most interesting aspect of Project Flipside is the ‘Flip your Fees’ classes that are offered to customers where any overdraft fees during the course of a month can be reversed simply by attending a class offered by the Credit Union.  It’s a great idea: there’s incentive for customers to attend the courses (to reverse overdrafts), and the information will likely stick with them as a result.  People can even sign up for classes online (although the class schedule needs to be updated).

The tagline for the initiative is also really well done: “the alternative to doing nothing.”  Many of today’s younger consumers need to be proactive if they’re going to learn about personal finance.  While some do nothing, this tagline speaks to those willing to be proactive in their learning.

While I would like to see some aspects of the site updated – namely, the ‘flip your fees’ class schedule – and I’d like to see more events and blog comments,  overall, this initiative appears to be pretty strong.  The Generation Y ‘crew’, the website, the high school branch, the social media elements, the events, the contests, etc. all seem to be cohesive and integrated.  At the same time, none of these comes across as overly cheesy – something we’ve seen when institutions try too hard to be ‘cool’.

My biggest question here would be relative to the market selected for the high school branch – Palisades High School in Kintnersville is 40 miles from the nearest Bucks First branch and 70 miles from the main office.

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While I can appreciate the enthusiasm that usually comes with the conversation, I can’t help but cringe when I hear community bank and credit union marketers tell us that they’re working on developing a Facebook page or Twitter account. 

Sure, we’ve seen examples of how these kinds of initiatives have helped some institutions connect with members of their communities.  But too often, there’s no strategy driving the decision to use these two platforms; the marketers responsible for managing these social media tools do not fully understand how to leverage them as effective marketing tools; and while these efforts are viewed as free or cheap, they often consume more resources than expected – ultimately diminishing the effectiveness of other marketing efforts.

Today, Ad Age published the article: The TGIF ‘Revolution’ is Nothing Without a Marketing Strategy.  Front and center is the main takeaway from the article, one that all marketers considering a Facebook page, Twitter account, or other social media initiative should consider: Social Media isn’t enough to save a weak brand.

While I can easily see some executives and marketers dismissing this statement immediately because they wouldn’t consider their brand to be weak, I think this is a strong statement for those willing to take an honest look at the strength of their brand.   Going one step further – given what we’ve seen from financial institutions using Facebook and Twitter, I’d also make the argument that social media efforts like these can do more damage than good to an institution’s brand.  

Things to consider before starting a Facebook page or a Twitter account:

  • Are your social media efforts (Facebook, Twitter, or otherwise) part of an overall marketing strategy?  If not, it’s time to revisit your strategy, or let this be an indication that these efforts may not necessarily be a priority at this time.
  • What are your objectives?  This question should be asked first about your broad marketing objectives and second about your social media objectives.
  • Who is your audience?  While national statistics and data may tell us that Facebook and Twitter have millions of users, how many will you reach in your communities?  Do your customers/members and/or prospects use these services?  Do they care if you use them?
  • Who will manage your social media efforts?  Yes, Facebook and Twitter are free services, but they require significant and ongoing time investment to be effective.
  • Are your resources better allocated elsewhere?  As the title of this post suggest, you do not need to be on Facebook, and you don’t need a Twitter account…consider your opportunities, your customers/members, your markets, your goals, your team – these two platforms may make sense, they may not.

There seems to be this view that all community banks and credit unions should be on Facebook and Twitter.  It reminds me of a post I wrote in response to the article “You Should be on YouTube” that was published in ABA Bank Marketing Magazine last year.  As you can tell from reading this post, my view hasn’t changed.

One additional point from Al Ries, author of the Ad Age article, that’s worth repeating here:

If your brands don’t stand for anything, you have to sell your products on ‘price.’ And it’s very difficult to make money by selling your products cheaper than the competition.”

At the end of the day, effective marketing requires that you know your market, understand your opportunities, and position your institution to take advantage of those opportunities – the tough part is determining the best way to do that.

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According to the J.D. Power and Associates 2009 Retail Bank Shopping Study results released this week, “when selecting a retail bank, shoppers place the most importance on the bank’s brand image.” 

“The study finds that 36 percent of a shopper’s selection decision is driven by the bank’s brand image, while branch proximity (21%) and products and services (14%) also considerably influence which bank shoppers ultimately choose.”

Given today’s economy, it’s no surprise that consumers would place a high degree of importance on an institution’s brand image.  But, it may come as a surprise to some that branch location and products/services would be less influential in shoppers making a decision about their financial institution. 

While delivery channels, products and services are still considered to “considerably influence which banks shoppers ultimately chose”, it’s important to remember that the concept of brand is bigger than one single aspect of an institution’s business.  Your brand image is created by the sum of all experiences and interactions someone has with your company.  This may be through direct interaction with your employees or your website, or may be indirect through a conversation with another customer.  In either case, these experiences contribute to a person’s overall impression of your brand. 

Brand image is not created overnight.  And while it may be supported through initiatives like advertising, creating a certain brand image requires focus and constant attention.  As pointed out in the Retail Bank Shopping Survey, “”Some crucial aspects of a bank’s brand image-such as perceived financial stability and reliability-can be difficult for a bank to improve, which negatively affect the bank’s likelihood of being selected.”  

Because different people will experience your brand differently, your brand image will vary from person to person.  Companies that recognize this have gone to great lengths to create and deliver a consistent brand experience to every customer.  These companies have been able to shape perceptions and their brand image.  On the other hand, companies that have not tended to the issue of brand often deliver disconnected, irrelevant and/or inconsistent messages or experiences. 

While this report may come as news to some people, the concept of brand image is not new in the financial services industry. 

Consider information from the J.D. Power and Associates Retail Banking Satisfaction Survey released in May of this year:  “customer perceptions of bank brand image have declined for a third consecutive year.  Low customer ratings in areas of overall reputation, customer focus and personal service primarily drive the decrease in brand image among banks.”  The report goes on to talk about negative media coverage and increased merger and acquisition activity as contributors to consumers’ perceptions.

In the report, Michael Beird, director of banking practice at J.D. Power and Assocaites, offered some valuable (and seemingly obvious)  insights for financial institutions: “By focusing on aspects most critical to the banking experience, banks can win the favor of their customers, which can lead to considerable financial rewards.” 

Executives and marketers need to recognize that the ‘aspects most critical to the banking experience’ have evolved in recent years.  It is no longer sufficient to offer good products and services at convenient branch locations – consumers can get good products and services from just about any financial institution in town. 

A few tips for institutions looking to strengthen or reshape their brand image:

  • Focus – You can’t be all things to all people.  Figure out what you want your institution to be known for.  The more specific you can be, the better – emphasize your strengths and look for untapped opportunities.
  • Know your market – Look at your customers, prospective customers, your community and your competition.  This kind of evaluation will reveal available market opportunities and challenges.
  • Commit to a position – Establish a meaningful and relevant points of differentiation – organize around those points.  Emphasize your institution’s value added and points of differentiation in your messaging, but most importantly – deliver them through the customer experience.
  • Manage the experience – Your delivery network, marketing, people, products, processes, etc. should all work to deliver a consistent brand experience for your customers, prospects, and your community.

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The Business section of today’s New York Times features the article: “In Ads, Banks Try the Warm, Cozy Approach.”  While the title refers to advertisements, the article really addresses the issue of brand – specifically, the fact that some institutions are rebranding themselves in an effort to change negative perceptions. 

The article highlights a few examples of banks we’ve heard quite a bit about in recent weeks and their taglines:

  • Ally Bank: “A better kind of bank.”
  • A.I.U.: “A unique franchise.”
  • Redneck Bank: “Where bankin’s funner!”

Louise Story, the author of the article makes the point – “All are new names and new slogans for old companies with big worries and, in some cases, even bigger image problems”, and goes on to say “So with cheery, the-future-is-bright advertising, and, in some cases, revisionist branding, companies are trying to put their troubled pasts behind them, or at least out of the public’s mind.” 

We know that advertising only goes so far.  So, is rebranding the answer?

For some, perhaps.  But rather than focusing efforts on a new name or a new tagline, financial institutions looking to reshape perceptions should be more concerned about what their brand means to their customers, prospective cusotmers and their communities.    Negative media attention about the financial services industry has caused many of us to rethink the relationships we have with our financial institutions.  A new name or a tagline may generate attention, but it may be more of a distraction than anything else. 

Where many think of rebranding as the development of a new name, logo and tagline, today’s institutions may be better off thinking about rebranding as organizing more deliberately around strengths and unique points of differentiation.  At the end of the day, emphasizing those points and delivering them through action are more effective in shifting perceptions than simply changing names or adopting a new tagline.

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