A brand can be hugely instrumental to the success or failure of a firm yet it is something that is sometimes seen only as the preserve of the Big Corporates.  

Successful branding differentiates a company from its competition, instilling a sense of emotional loyalty with investors, customers and employees - and consequently delivering financial value.

These days, consumers have more information about products and more choice than ever before – thus it is imperative for firms to differentiate in order to stand out. Increasingly, success is not determined by the biggest advertising budget or the most recognisable logo. It’s determined by who makes the greatest emotional connections.

In our experience, a well-executed brand strategy can help a business gain recognition, build trust, increase financial value, generate referrals and motivate employees. Conversely, ill-thought through brand activity can effectively destroy a business.

Even though the value of a brand in itself can never be determined through exact science, there are a number of different methodologies to place a financial value on a brand:

1. Cost incurred in creation – this is the most straight-forward method, equivalent to determining the monetary value that went into building the tangible elements of a brand. Typically, this would include historical advertising, promotion, campaign creation, licensing and registration costs and the cost of any trademarks.
2. Market-based valuation – a value is arrived at after researching the prices of competitors in the marketplace, normally using points of comparison with analogous brands; considering their brand valuations, comparable company transactions and stock market quotations.
3. Potential future value – this valuation uses future net earnings that can be attributed directly to the brand to determine its current value.  Under this method, brand value is equal to the value of income, cash flow or cost savings actually or hypothetically attributable to the reputation or recognition of the brand.

Each method has its pros and cons, yet only method 3 considers the future performance of the business and acknowledges the importance of brand strategy to future success or failure.

Financial Services

Arguably, post the financial crisis of 2007-2009, brand has become even more important for the Financial Services sector – particularly in aspects that relate to consumers’ perception of trust and reputation.

Many of the established banks have responded by trying to re-build their brands or by creating completely new ones – seeing this as a strategic priority to maintain and expand market share.

Challenger banks like Starling and Monzo have recognised the opportunity for them, as have more established brands like Handelsbanken and Triodos, and are seeking to carve out a unique brand identity that combines a clear brand purpose with brilliant execution.

This approach is used to cultivate confidence and encourage customers to build genuine relationships with their Bank.

Click here for further analysis through case studies of Monzo and Virgin Money.  

It is the synergy of brand activities which ultimately determines sustainable market value

Purpose/ Trust

Authenticity is key in the delivery of brand experience, and particularly in financial services. Businesses must first look inwards to determine what their purpose or reason for existing is, before distilling this into brand strategy. Customers are increasingly savvy and able to distinguish between a genuine narrative and a gimmick and are more and more looking to be engaged with passion and integrity.

Channel

With consumers accessing information, products and services via smartphone, tablet and laptop, plus seeking instant human interaction on webchat, social media, telephone, as well as face-to-face, businesses are experiencing many new challenges in how they approach distribution. 

Many struggle to identify appropriate messaging for variable channels, as well as the need to evaluate success and maintain flexibility in response.

Customer Focus

Successful businesses are generally one step ahead of their customers’ preferences and resist the trap of targeting an entire customer base with generic messaging. Successful businesses analyse individual customer behaviours to detect preferences and find ways to present the most relevant product at the most appropriate time.

Personalised engagement with customers not only convinces first-time customers to remain loyal, but also leads to successful needs-based sales, improving customer retention and share of spend.

Product 

It goes without saying that providing a product or service that serves its intended purpose, with the quality customers are looking for, is critical. History is littered with failed ventures, including great products unable to sell at the right price and/or to reach their intended customers.

Marketing/ Public Relations

Whilst mass advertisements and sponsorships were traditionally how businesses utilised their marketing budget – the dynamic has now changed. Advertising budgets are now allocated in a number of different ways, targeted at carefully segmented consumer groups, often using feedback available through detailed digital analytics.  

The multi-faceted nature of financial services means that businesses must carefully evaluate complex and interconnected factors before embarking on change that could have unintended consequences.

Click here to see relevant examples of where brand changes did not go according to plan.   

Branding Requires Continuous Evolution & Care

All financial services businesses must invest utmost care in each and all of the component parts which constitute their brand. This inevitably entails ensuring all aspects operate in synergy and the active consideration of how any revisions or fine tuning might impact on the overall brand experience.

Strategy invariably means looking to remain one step ahead of competitors and ideally anticipating existing and new customers’ expectations. Market and consumer expectations change frequently and so, therefore, must brand strategy.

Get in touch

To discuss how Johnston Carmichael can help you determine the correct business strategy to help you meet your goals, or to assist with performance optimisation across a wide range of operational challenges, please contact Ewen Fleming.