Standing out: you don't have to be a large bank with a big budget in order to tap into the emotional power of brand positioning--a process that differentiates your financial institution and bolsters customer loyalty.

• Author: LiBrandi, Bryan N.
• Position: Branding

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Let's look at the increasingly complex environment that banks face today: Not only are there more players in an already crowded space--with insurance, investment and lending services entering the traditional banking market--consumers are also becoming more savvy and require more sophisticated products to meet their needs.

There is also a change in the way the consumer defines the fundamental driver for bank choice--convenience. Convenience used to mean easily accessible and plentiful branches, a large ATM network and lobby hours that accommodate busy lifestyles. Convenience has now "left the building" and is about Internet banking, phone services and making right-timed offers so that customer time is not wasted on irrelevant promotions.

While this sounds like a complicated landscape that makes carving out brand loyalty a difficult strategy, it must be done. Banks that will succeed and lead in the future are those that can go beyond commodity status. These successful banks will create advocacy by gaining greater wallet share of existing customers. These winners will target new customers with a unique experience provided by a brand that emotionally resonates with people. After all, a key driver of loyalty is the amount of accounts a customer has with your bank. Deepen the relationship and you're ensuring long-term viability in an ever-changing landscape.

Current bank branding lacks emotional appeal

Take a look at any newspaper, TV campaign or magazine and one thing becomes clear about the current state of bank branding--it is typically about price and commodity offerings. "Free checking ... low-interest home equity loans ... receive gift with new account...." are the headlines that permeate the industry and flood consumers with one message: Price should be my primary consideration when bank shopping. And fundamentally, when people shop on price, people switch more frequently because the next lowest offer is always right around the corner. Price marketing does not create loyalty. It reinforces "commodity."

The long-term goal of marketing campaigns should be to create trial, drive current customers to broaden account usage and expand customer perception beyond seeing the bank only as a transaction facilitator. Ultimately, banks want to elevate the benefit/services they offer consumers and drive price sensitivity out of consumer choice so that the bank can increase profits.

How can brand positioning help?

Simply knowing...