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Building Trust into a Community Bank Brand
Richmond, VA (January 2009)–With the uncertainty in the financial markets, banks are rushing to reassure depositors and investors that their money is safe and secure. Just six months ago, Wachovia and WaMu were brands that consumers trusted. Analysts are now projecting that hundreds of bank brands will disappear before the market turns around. In this kind of environment, any reassurance rings hollow. So what is a bank brand to do?
Larger banks are running campaigns that range from full page letters from the bank president to photos that depict trusting relationships. Not to be critical of bank presidents, but letters of reassurance right now come across like a stranger saying, “Trust me.” Nor do the heartwarming photos of dads and kids instill much confidence. For customers having trouble paying their mortgage, everyday life is not so happy-go-lucky.
Community banks, which can more easily create the perception of a local, trusted partner, should be at an advantage during tough times. Depositors may feel like keeping their money close to home is more secure. Investors like the idea of a balance sheet that includes assets that are tied to tangible collateral they can identify rather than derivatives or mortgage backed securities. The trouble is that most community banks have not invested in their brand enough to differentiate from other local competitors. So, when they all rush out together to claim that local is better, they all look the same.
Trust in a brand is built over time. It starts with a consistent brand promise that is communicated in a compelling way. It’s paid off by consistent brand experiences that fulfill the promise. If a brand hasn’t worked to build that trust, there is very little it can do to make it magically appear in a market that is rife with distrust. In fact, the rush to reassurance may have the opposite effect. After all, the investment banks that disappeared without a trace tried to tell everyone that everything was okay only days before their demise. Telling investors to stay put in this market is akin to raising a red flag.
Banks need to assess their brand equity and focus on the sustainable advantages they have worked so hard to establish. If competitors are rushing to reposition their brands as the most trusted in the market, your efforts to do the same will result in parity. Instead, ask yourself how your brand positioning can best be leveraged to add value in the midst of this crisis. If you have positioned your brand around personal service, find ways to deliver on that promise that takes on new meaning in uncertain times. Whether your brand positioning is based on conservative ideals or convenience, there is a way to make that message more relevant in current market conditions.
Suppose the market was experiencing an unexpected boom instead of this sudden bust. We might see a lot of banks rushing to promote great rates and easy terms on loans. But, we probably wouldn’t see banks rushing to reposition their brands as the most liberal lenders. This phenomenon is not unique to banks. When profits are up, brands tend to stay the course. When profits are down, brands are more likely to seek out a new positioning. While neither strategy may be the best for the brand, market conditions sometimes force bad decisions. In good times and bad, well-positioned brands perform better than poorly positioned brands.
This is not to say that better brand positioning could have saved Wachovia and WaMu. Each of these banks invested heavily to differentiate its brand. In fact, after First Union acquired Wachovia, they chose to assume the identity of the smaller institution because of the value of its brand. The question is whether or not each bank made decisions that were in line with its brand promise. The best any bank brand can do on the way to recovery is to remain true to its brand heritage, make decisions that support its brand promise and find relevant offerings that add value to its brand positioning.
About RightMinds
RightMinds is a strategic marketing company that provides planning, development, implementation and management of full-scope branding, marketing, and communications programs for consumer and business-to-business marketers. In addition to being particularly strategic, RightMinds has integrated a team of expert implementers in the disciplines of advertising, marketing, media, public relations and web in order to be able to accomplish any client objective. RightMinds serves a variety of regional and national clients from its Richmond, Virginia headquarters and an office in Atlanta, Ga. Among the agency’s accounts are LandAmerica Financial Group, Inc., Dominion Resources and Genworth Financial.
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