Heading up the marketing function of a global investment bank might understandably hold little appeal at the moment. There’s not much good news coming out of the sector and if there is, it’s being drowned in a relentless swathe of bad press about price drop offs, sub prime lending scandals and an impending recession. Whilst some brands have come under particular scrutiny (Societe de Generale for its ‘rogue trader’ scandal and UBS for its sliding share prices to name just two) the sector is suffering from a crisis in confidence within the corporate space. The question is, is it possible for the finance industry to market itself back out of the black hole its image has fallen into?
In the world of corporate marketing the finance industry, by nature, suffers a marked disadvantage compared to most B2B peers. Its product offerings are dictated by complex market forces, so it can’t model itself on price promises. Its products are not tangible, so it can’t model them on quality or robustness.
Does this suggest the industry is lying low until the picture looks less bleak? “The financial sector is one step up the ladder from tobacco companies in terms of where they are starting from, by and large there was never a lot of trust and goodwill in the first place,” says Stephen Thomas, partner at creative agency The College. “The current economic situation reinforces the fact that they are all in it together at the moment and if there was a major global investment bank that was immune from risk, they would stand out.”Fundamentally, financial brands can’t give an absolute guarantee on very much at all, which goes some way to explaining why general perception of the industry is sceptical. Those on the outside generally view goliaths like JP Morgan, Goldmann Sachs and Merrill Lynch as ‘closed door’ institutions which give little away. Perhaps it is telling that despite B2B Marketing contacting several of these powerhouses to take part in this feature, none were willing to contribute.
Turning a negative into a positive
None may be immune from risk, but one at least has chosen to try to stand out positively with a carefully crafted campaign pulled together late last year. Despite having just suffered its largest ever quarterly loss, Merrill Lynch took out full page ads in the Financial Times and the New York Times to try to convince its investors and employees that it was still in good shape. In a play on its trademark bull logo, the ad boldly read “Why Merrill Lynch is still bullish on Merrill Lynch”, going on to point out that “Time and again in our 93-year history, we have survived tumultuous times and tough markets and emerged the stronger for it” and that after the 2001 recession it went on the produce five years of ‘unprecedented’ growth.
“The key to its success was its honesty and that it hinged on the core essence of the brand,” says Mike Symes, MD of specialist financial marketing agency Strand Financial. “The campaign was planned meticulously and delivered at speed.” Of course damage limitation doesn’t work for every brand; Northern Rock is unlikely to win back the confidence of its customers in a hurry by taking out an ad reading “Why Northern Rock is solid as a rock”, but the fundamental difference, points out Thomas, is that Northern Rock’s business strategy wasn’t right in the first place. “If your strategy is flawed, your brand will die. Brand awareness campaigning only comes into play when you’re on the same footing as your competitors,” he points out.
Industry experts say that part of the difficulty for investment banks full stop is that their product offerings are all so similar, which is what makes brand awareness advertising all the more of an effective strategy. As the recent sub prime mortgage scandal highlights only too well; when banks do break from the mould and offer ‘amazing’ deals; things inevitably come crashing down. When the bad press about sub prime lending hit, the opinion of many was that banks had used financial smoke and mirrors to make junk look good, thus damaging their reputations to the extent that a hasty rebrand probably now won’t do them any good.
“It’s generally hard for banks to differentiate in terms of products and services they offer, so the brand experience – which boils down to personality and tone of voice – is all the more important,” says Thomas.
Symes agrees that product differentiation is tricky within such a tightly knit sector, and even when done legitimately is not necessarily beneficial to the brand. Much of the focus within the banking sector is on differentiation at product level in order to drive short-term tactical initiatives to meet targets, he says. “I frequently hear CEOs of financial businesses say they could put a credit card between themselves and their major competitors, the difference is so slim. Without differentiation there can be no leadership, competitive advantage or ability to shift a market,” he says. “It follows that in order to call ourselves B2B marketers, we need to achieve the highest level of differentiation defined by the term ‘create your own space’.”
Symes says that in order for a brand to stand out in the mind of a customer it must fulfill what he terms the ‘four Rs’ and be remarkable, reputational, relevant and real. “For a brand to fulfill its promise, the four Rs must be adopted at every level from corporate strategy through to engagement with the customer,” he says.
A lack of marketing resources
Symes recently launched his own resource for financial marketers which he hopes will give them the tools to do just this. ‘Financialmarketing.com’ is an online portal designed to bring together the financial community so that they can share and hone their skills.
Stuart Maister, MD at web TV company Broadview, is in agreement that the web could provide an invaluable means for finance brands to change their image. “Interactive programmes can involve customers and show the bank as an organisation wanting to listen to its customers, to help them with their challenges and engage with them,” he says. Maister believes that by transmitting content featuring people discussing and tackling issues of real relevance to finance businesses and their target markets, some of the negative image association, more prevalent than ever in these challenging times, can begin to be overcome.
Symes is meanwhile keen to point out that there is one corner of the financial industry that he feels is getting its brand message spot on; the asset-based lending sector, and that others could learn a trick or two from it. Strand Financial has completed branding work for a number of asset based lending companies, and the key to their campaigns has been in the ability to identify and play on the emotions corporate customers will be feeling in these economically uncertain times. In rebrand work completed for Litmus Advisory (old name Postern Advisory) Strand Financial ensured the new brand represented the company’s exclusive focus on delivering certainty of outcomes in the asset based lending market with the tag line ‘Delivering certainty’, a phrase that delivers a key message as the financial market as a whole faces an uncertain future.
Similarly, in work completed for SME Invoice Finance, a corporate identity was developed that embodied speed, strength and flexibility, in the form of a big cat. Symes explains that these are key messages to be conveyed to ‘cash hungry’ small business owners, who particularly in times of economic crisis will feel the need for strength.
None of this is to say that brand differentiation is the only survival tactic financial organisations can rely on in these less certain times. UBS, much of whom’s marketing strategy relies on its service differentiation offering so far seems to be weathering the storm despite a continual, and well publicised, drop in its share price. According to recent press reports, customers are generally sticking with it despite its misfortune.
“This is an organisation that has been around for a long time and has loyal clients,” offers Simon Kent, head of retail banking at financial services consultancy Troika. “Yes, it has been caught out, but people appreciate what it stands for, which is about positioning itself on its service differentiation. Its key message has always been ‘yes, we are big, but we’ll let you speak to an individual’ and that message remains relevant despite what is happening to it now. If it tried to cut cost it would no longer be able to live up to that proposition, so it is just riding things out at the moment.”
Learn from your peers
UBS’s tactic of sticking firm to a key message, is, according to industry observers, something many financial brands could learn from. Some brands have participated in so many mergers and acquisitions since they were founded that their original brand identity has been almost completely eroded. “Brands in this situation would do well to revisit the reasons they existed in the first place. The founders had a brand vision, but it all too easily became lost along the way,” says Symes.
Perhaps there are also lessons the global brands could learn from homegrown British banking institutions. Lloyds TSB Corporate is currently working hard to promote itself as being there ‘for the journey’ for its customers, a message that it says is all the more crucial given the current economic climate. “Customers think that when times are good banks want to help them and when times are bad they won’t,” says Jeremy Hayward, marketing director at Lloyds Corporate Banking. “We’re concentrating on the message that we are long term in our approach and we’re here to support our customers. The word ‘relationship’ is often used in this industry, but many organisations continue to think purely transactionally,” he says.
One of the advantages for ‘local’ brands like Lloyds TSB Corporate is that is can readily develop a localised marketing strategy based on what it identifies its audience as wanting. Its ‘for the journey’ approach is targeted at UK customers it knows will actively be seeking reliability given the current economic climate; an approach some say could benefit the global names.
“Smarter players with regional networks could use their branches as a platform for community-focused B2B marketing that fosters trust and loyalty. There is a rare window of opportunity for niche or regional brands to steal a march on larger competitors by encouraging businesses to switch their allegiances and work with providers that are closer to home,” says Peter Wilton, director of TDA. “However, small and local credentials are not enough to earn trust on their own. There needs to be substance and intrinsic value in the shape of enhanced service, relevant propositions and better deals,” he adds.
The importance of spin
PR must also play an important role for some of these brands in the coming months; it cannot be overlooked that news, analysis and speculation about the future of the global economy is rife in the press. It can be difficult to put a positive spin on such negative news, especially given that during the past few weeks many organisations, including Morgan Stanley and Citigroup as well as UBS and Merrill Lynch, have published less than favourable end of year results.
Despite this, David Gorman, director of equity strategy at Standard Bank, thinks there is still an opportunity to glean some good from the bad news. “Create positive spin. Brands should focus on messages such as ‘it’s been “x” number of years since we cut dividends for our shareholders.’ A message like this on the business pages of newspapers will resonate in City circles. Banks don’t seem to be good at getting these messages across, but if they did, they could instigate some effective PR,” he says. “At the moment there is a sense of fear that banks don’t want to lend each other money, let alone customers, so it’s important to try to reassure corporate clients where they can that it’s business as usual.”
Financial brands are clearly not inept at successful marketing; after all the biggest names have got to where they are today because they have successfully built up widely recognised and respected names. But because they operate within such an unpredictable market, none can afford to rest on their laurels; and in a period of economic gloom as severe as the current one, they will find themselves at their most challenged.
They also operate within a sector which comes consistently under the media spotlight, more so probably than any other sector, meaning that perception of their brands is never fully under in-house control. If nothing else, it’s certain that now is the time when the marketing functions within these organisations will be pushed to the limit.
“Global banks need to look very closely at the way in which their own crisis communications functions are operating,” sums up Symes.
“The court of public opinion is more important to your reputation than a court of law, particularly in B2B markets where knowledgeable customers tend to be less forgiving. In these credit crunch times, financial institutions need bold visionaries who will drive brand differentiation strategies, rather than allow their organisations to fall back on the endless cost-cutting that starves innovation.”
