Think like a Brand, Not a Bank (eBook)

Introduction

On the front door of your neighborhood Starbucks, you see an Under New Management sign. Inside, a man in a suit and tie is greeting customers. He looks familiar. Isn’t that . . .?

Jeremy, the manager of your bank?

It seems that Jeremy left the bank looking for a new challenge. He has taken over your favorite Starbucks, and implemented bold new initiatives.

“Hello!” Jeremy calls, approaching with a smile. “What can we help you with?”

“Uh . . . I’d like a coffee?” you say.

“Well, we can certainly help you out with that today. Is this business or personal?”

“The coffee?” You’re not sure if you’re on some kind of prank show. You look for cameras. “Um . . . personal, I guess?”

“Great! Alicia can help you with that. Station five.” He points you to the last in a line of numbered barista stations.

“Hi, Alicia. Could I get a venti latte with soy milk, please?”

Alicia nods. “You betcha. We’ll get you in and out in two seconds!”

You glance at the sandwiches in the display case. “Oh, and . . . could I add a crispy grilled cheese on sourdough?”

Alicia grimaces slightly. “Um . . . yeah . . . that’s not my . . .” She scans the store for a moment. “Let me see if I can find you a sandwich specialist.”

“What? A sandwich spec—?”

She motions to someone across the room. “Here he comes.” Alicia looks relieved that she’s getting some backup.

“Hi. I’m Dan,” the man says. “I understand you’re interested in hearing about some of our sandwich options?”

You glance around again, looking for cameras. “I’m interested in eating one of your sandwich options. That one.” You point to the grilled cheese. “It’s right th—”

“Follow me, please.” Dan strides toward the other side of the store, which has been divided into cubicles. You look back longingly at the sandwich as you follow Dan.

He motions for you to take a seat, and types on his computer for a moment.

“Um . . . Dan? Sorry to interrupt. But can I . . .?”

Dan holds up the one sec gesture. “Just pulling up some interesting stats for you on ciabatta breads.”

“No. I don’t need ciabatta bread. Just that grilled cheese on sourdough. I figured . . . you know, with it being a cold day and all. Maybe a little comfort food . . .”

“I hear you,” he says. “But I’d like you to keep an open mind about the possibility of moving up to a . . .” He cracks open a large binder and turns a few pages. He notices a Post-it Note and crumples it up. You only got a glimpse, but you could have sworn it said: “Chicken Caprese numbers lagging. Push the chicken!”

Your phone dings. It’s a text from your coworker: “Can you grab me a chai tea? I’ll Venmo you!”

“Do you need to reply to that?” Dan asks. “It’s okay.”

“No. It’s just a coworker. She wants a tea.”

“Coworker?” Dan says. “I’m sorry. I thought this was for personal use. Maybe I misunderstood.” He motions to the manager.

“No. It’s okay. Forget it,” you say. But it’s too late. Jeremy has arrived.

“Is there a problem?”

“She wants a business tea,” Dan says, trying hard not to roll his eyes.

“I’m so sorry,” Jeremy says. “I thought you said you were here for a personal coffee. If you’ll just follow me.”

“Wait,” you say, “all I want is a latte and a grilled . . .” Dan is shaking his head disappointedly. As he leads you away, Jeremy is telling you that you should get overdraft protection on your Starbucks card and that, if you’re thinking of investing, you should consider “shorting the scone market.” And with the low broker fees, you could also . . .

You wake up in a cold sweat.

You breathe a sigh of relief that Starbucks, one of your favorite brands, doesn’t have a banking mindset. And as you get out of bed, you wonder . . .

Why doesn’t my bank have a brand mindset?

Although the above Starbucks dream—or maybe nightmare?—was mostly written in jest, it’s not too far from how most banks operate. For banking to be more relevant in today’s world, however—particularly post COVID-19—banks need to think more about creating connections and meaningful experiences for their customers. While consumer and commercial brands have been doing this successfully for decades, banks have yet to fully embrace this approach.

That’s because they’re still thinking like a bank, and not like a brand—and we’re here to help change that.

Backed by Data

Innovators and investors understand the power of brands.

Kantar, a global data and insight firm, has been valuing the world’s most powerful brands (not their product or revenue; what their actual brand is worth1 ) for the last sixteen years. In their annual report, the performance of brand-led businesses during the global pandemic explicitly underlines the importance and value of thinking like a brand.

During the five weeks from February 14 to March 31st 2020, the MSCI World Index dropped 73 percent and the S&P 500 dropped 51 percent; a tracked portfolio of the top 150 most valuable brands dipped just 42 percent. The brand portfolio recovered its value just fifteen weeks after the COVID-19 crash in March 2020—twice as fast as the general stock market indices. And then the Strong Brands Portfolio kept on growing, gaining an additional 135 percent in value over their prepandemic peak through April 2021. Thinking like a brand is not just powerful, it drives resilience in times of uncertainty and growth in times of change.

If you compare the MSCI World Index with the S&P 500, brand focused companies did not just recover more quickly, they accelerated their growth.

Interesting, but What’s in It for Me?

So, point made on the importance of branding in broader industries, but you don’t sell smartphones, you don’t sell jeans, and you don’t sell coffee. You are in financial services.

Harnessing brand power within financial services demands a new way of thinking. It’s not quick, and it’s not easy. But it’s a shift that you can adopt—and it’s worth the investment because great brands all speak the same language, and it’s a language you already know.

Returns.

The Kantar study not only looked at the performance of their portfolio during the pandemic, they also looked at long-term shareholder returns. The entire portfolio (top 150 brands) has consistently outperformed the S&P 500 and the MSCI World index since tracking began.

The best way to think about this: If your institution had invested $1 million in an S&P tracking fund in 2006, your investment would now be worth $324 million. If you had chosen to invest in a portfolio containing the top 150 most valuable brands, you would have $463 million. And if you had—it turns out wisely—chosen to invest in just the top ten brands, your investment would have increased 463 percent, or $563 million.

Strong brands and brand thinking generate superior value for all stakeholders. Yep—inarguably, great brands get great returns.

We’re talking about authentic, relevant narratives. Brands that provoke conversations and transcend business models and technology. And if your bank or credit union can do the same, you’ll create real value.

You’ve likely heard this “brand” routine before. Perhaps you were the one to pitch it in your bank or credit union. It’s a hard balance between that and the operational demands of the institution. We get it. The following represents some of the common barriers to change we’ve heard in our experience:

• you just don’t have the budget for it
• there are too many regulatory hurdles
• it’s just not how things are done
• you have legacy technology
• office politics

These are all real challenges. And we hear you!

But . . . here’s the good news. None of these reasons block you from changing your bank’s mindset. You don’t need a core migration or a consultant to think like a brand. Changing the mindset won’t blow out your budget. Or get regulators involved. Or be slowed down by old software. Changing the mindset from bank first to brand first is something you can do. And you can do it now.

We’re going to show you how.

We want banks and credit unions to start thinking like brands so they can better connect with their customers and grow, but it starts with a mental shift (more on this in Chapter 1). Yes, you’ll have to sell it internally. Yes, it will be like carrying water uphill in the beginning. But all of that work is forward moving. It’s progress.

Our goal is to change the standard mentality around growth in banking and—by introducing five research-backed principles—help banks and credit unions (and those that partner with them) to think like a brand.

And yes, it starts with mindset. We’ve dedicated an entire chapter to mindset for a reason: none of the other principles in this book will be effective if you don’t change your mindset.

What You Will Learn

Over the next few chapters, we’ll teach you how to think like a brand (and reap the benefits that come with it).

Some of the main points you’ll learn...