Jeff's Thoughts - September 26, 2012
You Need To Conspire
Conspiracy theories abound, and there are more than a few people out there who see our whole financial system as one big conspiracy. Some of the recent behaviors of some prominent banks have contributed to these notions, of course, making it harder for you to position your community bank as an independent entity with distinct principles and values.
"Conspiracy" is typically defined by two elements: the degree of coordination, of acting in concert, among various players, and the illegitimate ends that are the goal of the action. The hole in the typical conspiracy theory of our industry is not that some people at some banks did not have unethical aims. They did. And it may also be true that some banks worked together (think LIBOR) to pursue the wrong goals.
But the real weakness of conspiracy theory is that it assumes a level of skill in coordinating actions and messages that is beyond most of the players in this industry.
Indeed, if it is possible to "conspire for good aims," perhaps your community bank needs a little more of that. At the very least, different functions and staff within your institution must share consistent views and messages about what your bank does, what it values, why you will be a good partner for a customer.
Pre-recession, many banks seemed to have two completely different factions struggling for control of the credit business. One side marched to the motto "Book everything in sight!" while the other kept chanting "soundness and safety" and "credit risk management." I was in plenty of banks that regularly spouted platitudes about things like "Maximizing growth through safe, sound lending."
Those platitudes did not do much to save banks who had only been paying lip service to risk management. The fact that different groups within the bank were "not acting in concert to achieve a common goal," were not executing that first element of conspiracy, caught up with them in the end.
From a customer's point of view, there's the message that your marketing and sales arm puts out, and there's the message that is implied by the actual interactions customers have with your staff. Do these messages look like they come from the same people? Do they represent the same bank?
Ask yourself this: if you took the logo and bank name out of your marketing message and mixed it in with advertising and promotions from other banks in your market, how easily would your own customers be able to connect your ads with your bank, based on their own experience?
Do your credit staff laugh, or just roll their eyes, whenever a new campaign is rolled out? Do the people handling your marketing efforts constantly grumble that bank staff refuse to get behind their message?
What's a customer to conclude if they see you saying one thing (in advertising) and doing another? Does that help distinguish your brand from the current public perception of the industry, or does it just remind them of why they don't think very highly of banking in general?
In huge companies, the marketing function can be very powerful, having a life of its own. Matching advertising to reality can be an overwhelming challenge.
One of the main competitive advantages of the community bank is that it can control its message to the public, and to its customers, at every level of the organization, from advertisements and mailings to web content to teller and credit interactions. "Brand" belongs to the institution, not to the marketing function. There's no excuse for a community bank to be delivering multiple, inconsistent messages about how they will do business with their customers.
Ironically, failure to "conspire" adequately within your bank about messaging and brand simply makes you look like everyone else in the industry, especially your much larger rivals. And that just adds more fuel to the conspiracy theories out there.