How Can Banks Overcome the Challenges of Setting Right A Misfiring Brand?

comments (0) December 23rd, 2019     

Pin It

Trudyseeger Trudyseeger, member
Love it! no recommendations

 

Many financial institutions, especially if they have been around for some time, tend to experience a brand that is steadily becoming weak and ineffective. The brand may have become so complicated that it defies articulation or management and lacks clarity of both personality and brand promise. When the brand becomes unhinged, both employees and customers tend to ignore it and act in their own ways that further weakens the brand. Weakened brands have multiple consequences, all negative and costly for the bank to fix and there can be many questions that are impossible to answer.

How Do Banks Get Hurt by Weak Brands?

Apart from the tangible costs arising out of a weak brand, often there are multiple hidden costs affecting virtually every area of the bank. Apart from less than optimum earnings, limited growth and loss of market share, banks can suffer from annoyed customers, frustrated staff, lower loyalty, and enhanced attrition rates of both customers and staff. Some typical examples of the impact of an ineffective brand:

Lack of shared purpose among staff: Contemporary banking, just like most other sectors, is extremely competitive and it is simply not enough to promise employees that the bank is caring. When it is evident that the bank's organizational culture has taken a hit as evidenced by a staggering brand, employees, particularly the millennials, are encouraged to leave for work environments that have a better culture not necessarily just handsome compensation. The lack of definition of the core values of the brand can lead to enormous discontent internally and the frustration leads to a loss of organization focus. It is evident that when employees do not share a common goal, morale will suffer and manifest itself in high and costly employee turnover.Also visit at Seiko Singapore.

No growth in customer accretion: For the bank to forge ahead with a steady growth rate, it has to ensure that growth of customers compensates for the invariable attrition, which across the banking industry in America averages 15% going up to even 20-25% for new customers in the first year of the relationship. Since a new customer acquisition costs on an average $200, a high rate of attrition can cost the bank very dear, according to a brand manager of Libertylending.com, a leading online lender. A low rate of organic growth is often due to the absence of a relevant and appealing brand strategy that is focused on a well-defined target audience. A brand that is weak not only does not attract new customers but also leads to the loss of the existing ones with poor word-of-mouth and fewer referrals compounding the problem.

Slow growth in market share: The lack of consistency of brand experiences due to a poorly defined strategy is likely to result in the decline of at best, slow growth of the market share. You can use analytics like rate of product penetration, services per household, rate of onboarding, and the NPS scores besides the metrics of cross-selling to gauge the brand's health and whether it is contributing to the bank's sales and relationship development efforts. Often, spurred by disappointing brand analytics, banks may try to build a culture that promotes sales; however, the symptomatic treatment of the underlying problem can lead to results that are at best mildly effective. Consumers are increasingly becoming sensitive to the culture of sales and incentives by banks to grab a share of their wallets and it is definitely not the best way of enhancing customer relationships, increasing ROI, and market share. A well chalked out brand strategy, a shared focus on the brand promise, the redefining the purpose of the bank, effectively identifying consumer needs and earning their trust should be the basis of driving the level of engagement higher.

Repairing a Broken Brand Has to Go Beyond Just Providing Great Service

To undertake a rebranding exercise, the bank needs to go far beyond just revamping the logo. It should ideally assess the current state of the brand and the marketing situation. The assessment needs to be completely honest and unbiased because living in denial merely serves to slow down the progress. The internal brand audit should cover not only the perception of the brand that the staff, as well as the management, have but also a thorough reexamination of the mission, vision and core values of the bank. A roundup of the brand assessment should include the brand identity that should be projected, the marketing messages, practical roadblocks, as well as an honest evaluation of the brand experience across channels by the customers. The entire purpose of the exercise is to find out what it is that sets your banks apart from the rest; whatever it is, it should be capable being defined, standardized, and measured unlike the nebulous concept of world-class service that every bank claims to deliver. Interestingly, an https://www.forbes.com report suggests that while 80% of businesses believe that they deliver amazing experiences to the customers, only a paltry 8% of the customers seem to agree with them. You also need to keep in mind that the delivery of customer services has changed dramatically in recent years with web and mobile banking taking the lead over customer interactions at the teller counters of the bank's branches.

Inside Out Brand Building

The brand health, very much like personal health, is built better from inside out. The process commences with the engagement and consensus among all the major internal stakeholders so that all aspects of your brand identity, perception, and culture can be taken in to account. By consulting all the internal stakeholders, you are sending out the message that their opinions and ideas are important. There is nothing more important than the opinions of the frontline staff that are actually interacting with customers. Also by giving your staff a voice in the rebranding exercise, you are building their ownership of the brand, which guarantees superior engagement that in turn leads to better customer service delivery and brand satisfaction.

Conclusion

Rebranding exercises are invariably complex and require absolute clarity of objectives and a thorough understanding of the current status of the brand in the minds of both the internal stakeholders and customers. Meaningful steps to address the reasons that led to the weakening of the brand are far more important than making cosmetic changes to the appearance of the bank logo.

 

posted in: banks

Comments (0)

You must be logged in to post comments. Click here to login.