Brand new.

• Author: Soblosky, Tanja Lian
• Position: Feature

It's possible to expand a brand in innovative and unexpected ways. Here's the revealing tale of how Canadian Imperial Bank of Commerce (CIBC), Toronto, moved into online banking by positioning the service under the house brand of a major Canadian supermarket chain. Today, that brand, Presidents Choice Financial, is that country's fastest-growing "bank."

When it comes to capitalizing on a brand name, banks might learn a lesson from retail products. Nike, for example, started by selling high-tech athletic shoes for a low price here in the United States. Once Nike established a reputation for quality at a great price, it expanded its product line tremendously to sell clothing, watches, sports gear and more. Now it is the largest sports-and-fitness company in the world. Nike is a brand that has become instantly recognizable by its trademark "swoosh." It's a name that is trusted to provide a certain experience and quality of goods. Other companies want to co-brand with Nike to achieve greater recognition and reach for their own brands.

And what about banks? If your bank started out with a high-duality, low-cost product line and wanted to expand its market to new territories, would your logo draw an eager crowd? What if you partnered with a well-known, trusted brand like Nike and offered Nike Banking? Would that catch customers' attention faster?

Here's the story of Canadian Imperial Bank of Commerce's (CIBC) innovative efforts to develop just such a partnership. When CIBC decided to create an online bank and expand its market share, it partnered with Loblaw Inc., a supermarket known nationally in Canada. Instead of just installing in-store branches under the CIBC logo, the bank marketed its banking services under the store's well-known, trusted house brand name--President's Choice. Since the launch of President's Choice Financial in 1998, CIBC has steadily grown a new customer base that almost exclusively uses electronic banking services.

Merging two paths

The seeds for the cutting-edge partnership were sown many years before online banking was developed. CIBC was founded in 1867, the same year Canada became a country. Since then, it has grown to be one of the 12 largest North American banks, with assets of over $291 billion and over 8 million business, agricultural and retail customers. CIBC's reputation for commitment to customer satisfaction and innovation has been evident throughout its history. It was the first Canadian bank to offer a "floating bank," delivering services down the St. James River to remote towns along its banks. It was also the first to offer a "flying bank," providing services to even more far-flung communities. In the 1990s, it looked to the future and saw that online banking was gaining popularity. The question was how to reach the greatest number of people and distinguish the online bank from the others.

Loblaw Inc., a Canadian company that has been around for...