BRANDING: Seeing The Light.

• Author: Bernstel, Janet Bigham
• Position: Building a brand strategy

You've probably heard the joke about how it takes six Californians to change a lightbulb--one to actually replace the bulb and another five to "share the experience." Laugh if you like, but bring it up at the next marketing meeting, because those Californians are on to something. Experience is the heart and soul of what it takes to build a strong brand for your bank.

"Brand strategy is the engineering of a customer's experience and the building of positive memories," explains Charlene Stem, the Berkely, Calif.-based senior vice president of Experience Retail for NewGround, a marketing firm for financial institutions. "You try to occupy a space in the customer's mind so when they think financial services, your brand comes to mind. The result is to build brand equity, the value of your brand."

Why build brand? Well, because bank products are a bit like lightbulbs, generic and ubiquitous. There is no product that a bank offers that a competitor can't put out next week. There is no price you can set that a competitor can't match. One outcome of this situation is price and product wars that erode customer awareness and profit margins.

"In a world where there is little or no perceived difference, price always wins," claims Stern. "Strategic brand building is the single most powerful tool that any company has to build competitive advantage in any category."

We pay more for the brands we value, according to Stern, otherwise we'd all be buying our clothes at discount department stores. And forget operational "best practices" she says, that just keeps you running with the rest of the hamsters. To get out of the cage you need to do two things:

* Build a brand strategy.

* Commit to relentlessly protecting, sustaining and growing your brand.

As a bank builds its positioning and brand, the value of what the bank delivers is greater and more distinct from competitors. Build bank equity by building brand equity.

Building codes

Banks haven't been very good brand builders to date, says Stem. That may be why customer awareness of products and interest in a broader range of services is lower than ever, despite the millions of dollars financial institutions spend on marketing and advertising.

According to NewGround's 2000 Sidewalk Survey, an exit poll of 160 bank branch customers at super-regional and national banks, only 19 percent of the customers knew their bank sold CDs, down from 34 percent three years ago in a similar poll. When asked where they were going to buy the next financial service they needed, 67 percent said it was highly unlikely they would get it at their primary bank.

"That's an unbelievable call to action," admonishes Stern. "Two-thirds are not going to their primary bank to buy that service, even if they know their bank has that service. And these are customers who averaged 10 years with their primary bank, and bank three or four times a month."

So, we're back to experience. Where are banks missing the mark?

"The buying decision is not just rational, like what business hours my bank has, or where are the ATM locations," explains Stem. "There is an emotional element in the buying process that has eluded banks because they don't understand how to build brand--and that's what the experts bring in."

However, even the experts agree that there is fuzziness about what brand really means. Branding is the latest buzzword and everyone wants to be a Starbucks or a Nordstroms. But few people know how.

"The real bad news is that most ad agencies say, 'we do branding,' but their job is to create a fresh eye-catching campaign with a new image each year," relates Stem. "What brand strategists do is to create the essence of continuity and the singular voice that will...