There’s no substitute for a strong brand reputation. It takes time to build, and it’s hard to regain if it falters. That sentiment has special relevance for banks, as many customers around the world are feeling frustrated by their recent experiences. Whether because of hidden costs, hard-to-understand contract terms, a lack of customer service or awareness of instances of corruption around the industry, their confidence in their banks has been shaken. And as choice increases, customer perceptions about individual brands are becoming increasingly important for long-term success.
There’s been no shortage of signals for the banks to heed since the crash of 2007, and all of them have highlighted the need for a new model that consistently puts the customer at the forefront of all activities. So banks have been taking the opportunity by enhancing their images in the eyes of customers while seeking to incremental growth in the process.
So how are they doing?
With countless interactions across an expanding realm of channels that are quickly changing how consumers live their daily lives, Nielsen recently conducted a meta-analysis of 761 financial services brands across 26 countries to assess the link between brand value and performance.
Not surprisingly, the study identified a positive relationship between brand equity and performance. The strength of the correlation, however, is somewhat surprising—and very telling. In fact, the analysis found that strong brands generate three times more market share than brands with moderate reputations.
The study also highlighted that strong brands command higher loyalty rates, a desirable attribute that benefits the bottom line and makes a brand less vulnerable to competitive market activities.
Despite the strong link between equity and performance, most brands still have a long way to go to improve the way customers view them. This suggests that the financial community needs to enhance the focus on its customers and rebuild consumer trust and confidence in its brands. While there are many paths companies can take to increase their brand values, Nielsen research identified three core factors that all strong brands have in common.
The value of a specific brand is derived from a few indicators, but brand image carries 51 percent of the weight, making a distinctive image a critical way to differentiate your brand. Nielsen research shows that well-branded advertising communicates its brand through audio and video, and it uses brand cues early and often. It often also uses mnemonic devices—iconic characters or music that immediately identify the brand.
High top-of-mind awareness is one of the leading indicators of high brand equity, proving that understanding how to connect with consumers across touch points is the cornerstone of growth for the industry. With the rapidly evolving tech landscape, consumers are interacting with their retail banks in more diverse ways than ever before—at branches, ATMs, on their mobile phones, with their tablets and on the web. The takeaway for all industries—including financial services—is that interacting with customers is imperative, and so is capitalizing on opportunities to engage with them, build awareness, drive discovery and ultimately affect sales.
In recent years, companies have created experiences that adjust automatically, respond in real time, predict problems before they occur and deliver tailored services to consumers. These advancements have created new standards for customer interaction and leveled the customer service playing field in the process. So while reputation remains a key driver of brand equity, our research shows that relevance (“bank for me”), customer focus, experience and expertise are also important differentiators.
Do these three principles describe every component of a strong brand? No. Are they a failsafe recipe for increasing brand strength? No. But there’s no denying the impact that they’ve had on the strongest brands in Nielsen’s database. So whether you’re planning your next great ad campaign or simply driving equity and sales through daily interactions, these three principles will help drive your brand’s success.
The meta-analysis draws upon Nielsen’s normative database of financial services brands and market share information from published statistics and external sources. A total of 761 brands and 119 brand equity models were analyzed. The data was extracted from Nielsen Winning Brands® studies conducted across 26 countries from 2004 to 2013.