Are banks really different? How do you differentiate beyond just the slogan?

In highly saturated and competitive markets, such as the banking, companies are looking for ways to differentiate themselves beyond just the price and avoid a race to the bottom. They invest lots of time and money designing what they think is a unique identity. Following the financial crisis which portrayed the banks in bad light they even doubled their marketing efforts in creating a better looking identity. That identity is meant to appeal to customers, bring the bank to their front of mind and essentially positively affect their market share and profitability. This is a good idea – so good that every bank does it!

However creating a brand that is perceived to be the best and offer better value than competitors is a real challenge when the market is mature and products are perceived to be commodities.

In a recent banking study conducted by Gallup in New Zealand, only 7% of customers believed that one bank was the best in the whole industry, while 44% of customers said that all banks and financial institutions are about the same. This is not unique to New Zealand; Gallup has found similar responses from banking customers in other parts of the world.

That 7% is a particularly valuable customer segment. Gallup has discovered that customers in New Zealand who agreed that one bank is the best are twice as likely to be fully engaged with their bank as those who believe that all banks and financial institutions are the same. Similarly, those customers are nearly two times as likely to be extremely satisfied with the bank’s products and services and to be extremely likely to recommend the bank to their friends and family, compared with those who perceive no differentiation.

So it pays, literally, to give customers a reason to think your bank is the best. However many organizations are missing one critical aspect of developing a truly differentiated brand: behavior.

Every bank says that it cares about its customers, that it provides excellent services, and that its products are good for customers. Most of them are right. But how many banks can prove it every day with every customer?

Customers respond to actions that prove the bank does what it says it will do. Such moments determine whether customers remain engaged with the bank’s products and services and in such instances the company’s true orientation emerges. Just like with people, if you are a family oriented person and your boss asks you if you could stay and work till late chances are that you’ll refuse or that you won’t be happy to say the least, but if you are a career oriented that won’t be a problem. Similarly with organizations, if one is product centric they will look at the customer through the product lenses and often won’t understand his true needs, if they are solely focused on the short term revenue targets they will treat the customer as a transaction and will try to close it as soon as possible.

Banks generally believe that their onboarding and training programs or their corporate culture is enough to teach employees to breathe life into the brand. But that 7% number proves that they aren’t enough.

When Gallup conducted research across four banking brands in the Asia Pacific region, they found that many front-line employees, when asked about brand behaviors, could relay only lofty organizational goals instead of specific actions. They knew about customer-centricity, for instance, but they couldn’t name specific behaviors that truly bring it about. Similarly, we at Beyond Philosophy conducted a research amongst customer experience professionals in Telecoms and only 30% of them believed their front level employees would be able to articulate what is the experience their company s trying to deliver.

Many companies seem to claim they are customer-centric, which is, as an organizational aim, a nice goal. However, to make that statement a reality all levels of the organization should portray the right behavior. For example, we worked with a company whose managers were consistently late for meetings inside the headquarters; similarly its technicians were consistently late or missed appointments with customers.

Here’s an example from the banking industry that Gallup gives: Bank A has branded itself as a community bank. Its organizational goal is to promote a sense of engagement in customers. Accordingly, all its print and billboard advertisements feature photos of local places. It sponsors and supports local schools’ athletic teams, and it funds community organizations that, in turn, prominently display Bank A’s logo in their materials.

But “community” is tricky to manifest in behavior. Bank A, nonetheless, has found some unique ways to do it: On game days, employees are permitted to wear T-shirts featuring local schools and colleges. Employees are encouraged, and sometimes paid, to assist at community events. And the bank always sets up booths at street fairs, car shows, and the like. Its mortgage specialists keep photos on their desks of houses owned by people who have originated loans with that officer (with the customers’ permission, of course). Sounds simple but it’s not because most companies have lots of bureaucratic procedures put in place that deprive their employees from their desire to do stuff like this. For example; we worked with a company that had amongst its company values “Service to the public” and yet when an employee wanted to support a community event she had to fill a long electronic application forms that are dealt with centrally in the headquarters situated in another continent!

None of what that bank in the Gallup example costs very much — these behaviors require more cleverness than money — but all of them demonstrates the brand via the employee. Yet few banks mobilize that sort of behavior.

So to make a brand come to life through behavior, don’t stop with formulating a brand identity. You need also to align the organizational goals to the brand values, and clearly define behaviors to help employees bring the brand to life.

The way we usually do this is by crafting a Customer Experience Statement. Whilst the brand is intended for communication outside the organization and often doesn’t provide clear guidelines as to what is the experience employees should make manifest, the Customer Experience Statement is intended for internal communication and to be used as a guiding light to the behaviors and experience the organization should be portraying, like the way sailors used the North Star to guide their way. Without having defined the experience you want to provide, different departments will have a different view as to what is the right thing to do and the result will be a disjoint experience. The next step is to align the organizational metrics and behaviors with the experience you aim to provide. We do this via Pyramids where we take the CES statement and turn it into a set of departmental initiatives derived from employees. The aim is to achieve buy-in (as these are employee defined) and to provide input into how the CES guidelines should be translated at the employee level.

This approach also addresses possibly the number one business mistake. The number one reason you and I are not having a lot more great customer experiences is the lack of support for strategies aimed at improving customer service by the people within an organization. The number one reason for that lack of buy- in is the fact that there has been little or no involvement by the people responsible for delivering the experience.

But not every bank has forgotten. Some are well aware that though they’re selling banking products, they’re operating on human connections. Those are the banks that truly are different and better. And their balance sheets show that their customers know it.