Mark Thorpe, Director at Truth Consulting, shares his thoughts on how financial services can move beyond dullness.
I recently had the pleasure of joining an expert panel with Financial Services Forum to discuss the pros and cons of financial services organisations operating a single master brand or portfolio of many brands. There was lots of great debate, ranging from the cost of new brand creation, through to the opportunities in creating sub-brands, before the elephant in the room raised its head.
A brave soul dared to utter the unspeakable truth, that FS brands are often inherently dull, and that this is at least in part the consequence of low frequency engagement and the public’s general disinterest in financial matters. Are we really still here, as marketing and comms professionals, in 2024?
Low frequency or boredom?
This issue of low frequency got me thinking and raised the question of whether low frequency was an inevitable driver of disengagement. I don’t think it is. We tend not to buy cars that often; on average British motorists get through thirteen cars in their lifetime. That’s probably a different car every 3-4 years (at most). Paradoxically, car brands are some of the best known and most loved, often with great loyalty, attachment and emotional salience. Something similar can be said for television brands (a category I know well through my work over many years). Mobile phones are another example of low frequency purchases. “Yes, but we use each of these every day of our lives” would be a valid response. Yes, we do, and yes, it is.
So, it’s safe to say that low purchase frequency is not the inevitable driving force behind consumer disengagement with FS brands. Maybe, then, it’s about low frequency of ‘use’ that creates the separation? Possibly, but what about travel agents? Or estate agents? Or John Lewis? All brands with low ‘usage’. Stretching further, what about all those brands that are never ‘used’, at least by the vast majority of the population, but still have incredible brand depth, salience and even warmth? Think Ferrari, or Rolls Royce, or Marmite (no warmth in the case of haters), or Concorde, or the Titanic (yes, the Titanic has all the attributes of a brand), or many hundreds of other examples that could be given?
I have lost count of the times I have heard FS professionals saying something along the lines of “consumers aren’t interested in FS, it’s boring”. I think we only really see the truth in such a statement when we move from adjective to verb. FS (and its’ brands) are only boring (adjective) because they have been made boring (verb). Boredom has happened as a consequence of a number of inter-related factors:
- A bored consumer doesn’t need much management – so why undo the boredom?
- The perception that boring brands are more traditional and authoritative – consumers trust boring brands more.
- Boredom is driven by lack of understanding – so just leave it to the experts behind the brand.
- FS is a serious sector and boring brands denote seriousness.
- Brands only really need to communicate with their consumers when there is actually something important (and usually a legal obligation) that they need to communicate (renewal, overdrafts, interest etc.)
- Emotionally engaging and relevant brands are expensive to craft and maintain – so why bother when points 1-5 are true?
Consumer Duty as catalyst to brand revolution in FS?
The introduction of Consumer Duty (2023) has been one of the most important events to have happened to FS in many years. The aim of CD is as follows:
“….firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey. As well as acting to deliver good customer outcomes, firms will need to understand and evidence whether those outcomes are being met.” (Financial Conduct Authority)
From a branding perspective, the introduction of Consumer Duty could be profound. More specifically, CD will require a different kind of FS brand. Move over big monolith with little to say and a big ego. Make way for smarter, more emotionally intelligent brands built for customer engagement across the FS journey and product lifecycle.
Consumer Duty should force a revolution in how brands are perceived, conceived and the nature of the way in which they live (and breathe) with their consumer base. These brands will have to have positive outcomes at their heart; it will be an indispensable part of their DNA. How these ‘outcomes’ are perceived and measured will change. It will no longer be enough, for example, for renewal to be endorsement enough, or keeping complaints to a minimum.
The lived experience with a brand, throughout the journey and key touchpoints, will become crucial. Relationship building, between brand and consumers, will no longer be optional, it will be an essential part of acceptable practice.
Last words: being boring is no longer an option
It could be argued that the belief that “FS brands are boring brands” is something that has served the FS sector well for many years (for all the reasons covered earlier). This has also been the cornerstone of the ‘single brand’ mentality. Yes, single brands can convey tradition and authority, but they can also suck the life out of consumers in terms of their willingness to have anything more than cursory, and absolutely necessary, involvement with those brands. Why would they?
The simple fact is that FS brands need to try harder, do more, stand for things other than tradition, and be built to work in a world that has changed immensely over the last two decades. To this extent, we are at the start of a potential brand revolution in FS. The future will be different because it has to be. In ten years’ time, there will be little or no discussion about the benefits of one brand or many. Instead, we will talk about which brands are raising the bar in terms of their ability to be meaningful entities in the lives of their consumers.