Does branding matter in financial services?
Here’s a sobering fact: the British public currently rates the financial services industry at the very bottom of the heap for reputation. Yes, our financial sector comes in at number 26 out of 26 in a recent YouGov survey, even lower than the gambling industry at 25.
Neil Monahan is digital marketing manager at Brandworkz.
The poll shows public perception of the financial services industry, right or wrong, as being the cause of the financial crisis and a risk to national wellbeing due to lack of regulatory compliance. Moreover bankers in general are seen as greedy and untrustworthy.
But, however unjust the industry might consider the opprobrium cast upon it, the fact is that 73 per cent of people say the industry has a rotten reputation and only 40 per cent are happy with the service they receive from their bank.
Of course UK banks have been anxious to counter this debased reputation. Nevertheless, the millions spent on endless brand refreshes and brand relaunches, as well as differentiation and customer care initiatives, have so far achieved little. The public continues to respond with a general shrug of the shoulders and large dose of cynicism.
So what’s to be done?
Well, first, here’s another sobering reality we have to face: while the banks most certainly recognise that brand values do matter enormously, most just don’t seem to be any good at communicating them to the wider world.
There’s an exception to every rule and this next example seems to have done things right.
When HSBC decided to rebrand its UK retail arm in response to a law requiring it to be put into a separate ring-fenced entity, one option was to name the retail operation First Direct.
Of course First Direct is already the name of HSBC’s existing internet-only service bank, with 1.25 million customers. Suddenly HSBC found it had a revolt on its hands, because First Direct customers immediately made it clear they weren’t going to stand for their brand being associated with the company that actually owns it. First Direct customers are that fiercely loyal to and protective of their brand.
Indeed account-holders have given First Direct a net promoter score of +73, which is more than 30 points better than any other UK bank. But just how did a financial services brand with no presence in the high street manage to build such a strong, loyal customer base?
The First Direct example
In my view the key to success of First Direct comes back to the brand, its values and how they are communicated to all staff, and how the staff are empowered to deliver a great brand experience. In fact First Direct takes its brand values so seriously that they are built into the contract of employment for all employees, from senior management to call centre staff. And those values continue to pervade the company’s culture as elements of key performance metrics and appraisals.
This ensures that customers get the same brand experience through every channel. For example, being ‘human’ is one of First Direct’s brand values, so they hire call centre employees who are good talkers and listeners rather than people with banking experience. The result? First Direct won first place in the 2015 Which? customer service survey – ahead of John Lewis!
This is a brilliant example of brand values breaking out of the marketing department and penetrating the entire organisation. The staff are educated about the brand, they are aligned behind it, they get the importance of it and they are encouraged and incentivised to deliver a great brand experience.
Interestingly, in the same Which? exercise Barclays, NatWest, HSBC, RBS and Lloyds Bank didn’t make it into the top 100 at all. Worse still, they were voted the five worst banks for customer service in a MoneySavingExpert poll in August 2015.
A lesson learned?
A rebranding can certainly create the opportunity to define brand values and educate staff. But it doesn’t always work.
Lloyds TSB became two separate brands in 2013 after a European Commission ruling, triggering what the media labelled a ‘rebrand’. However, Lloyds seemed to think that a rebrand involved nothing more than an advertising campaign and a tweaking of the logo, rather than a full brand redefinition.
And so they continue to languish at the bottom of almost every survey – most recently in the Uswitch review of customer satisfaction with current account providers. Surely this must be because the brand DNA of the business was left untouched during Lloyds’ so-called rebrand. It suggests that staff right through the business were never given any education about what the redefined Lloyds Bank stood for or what it envisaged in terms of delivering a great brand experience and top-notch customer satisfaction.
Of course, it would be simplistic to equate poor customer service with a lack of brand values alone. Customer service and customer experience are just a part of what makes up a brand. However, as in any business, your people are your front line, and if they can’t embody your brand values – indeed if they don’t even know what your brand values are – you are never going to score highly with consumers.
The way forward
So do brand values and branding matter in the financial services industry? It’s a massive YES. In fact they are probably more important to the financial sector than any other industry, given financial services’ vital role in society and the clear potential for delivering true customer service.
The way forward is to educate and communicate the brand values to all internal staff so they can deliver the high quality experience that customers rightly demand. Get it right and you can achieve the loyalty enjoyed by First Direct. Continue to get it wrong and you’ll go right on bumping along the bottom.
Neil Monahan is digital marketing manager at Brandworkz.