Is a Bank by Any Other Names as Effective in Era of Change? the Financial Industry Faces Issue of Rebuilding Images as Its Markets New Services in the Climate of Deregulation
Petruno, Tom, American Banker
Is a Bank by Any Other Name As Effective in Era of Change?
The Financial Industry Faces Issue of Rebuilding Images As It Markets New Services in the Climate of Deregulation
When Cambridge Reports, Inc., a Cambridge, Mass. research firm, asked consumers earlier this year to rate 15 major industries for how favorable or unfavorable an impression they impart, banking ranked third overall in favorable responses--topped only by computer companies and food companies.
Does that sound like an industry with an image problem?
Yet when the White House Conference on the Consumer and Financial Services Revolution convened in Dallas late in June, the consensus that emerged from industry participants was that many consumers are hopping mad at their banks.
The reason: growing discontent over such sundry transgressions as rising fees, pressure to accept automated teller machines, and delayed-funds availability.
Does that sound like an industry with an image problem?
Bankers may be excused if they have trouble reconciling the gulf between those two views. But there may be a simple explanation:
Overall, consumers still have a favorable image of the industry from the viewpoint of management, safety, and soundness--the standards banks were measured by before the advent of deregulation.
But by the standards of today's intensely competitive market--creativity, quality of products, value of products, and concern for customers' well-being--consumers' image of individual banks varies widely, and in many cases it may be just awful.
If you haven't already addressed the issue of your image, many leading corporate consultants insist it's only a mater of time before you'll be forced to do so.
The goal of every bank should be a harmonious, professional, and attractive identity--a central theme that flows through all communication with your various publics.
"It's increasingly difficult to differentiate between the services banks offer --they've become commodities. So you have to differentiate the institution,' says Edward E. Furash, head of Furash & Co., a Washington, D.C.-based management consulting firm to financial services companies.
In an era of burgeoning competition, "Banks now need to coin an image much the same as a consumer product coins an image,' adds Michael F. Purvis, vice president of S&O Consultants Inc. in San Francisco, a design consulting and marketing firm.
Understandably, some bankers are apt to balk at the notion that they need to market themselves like breakfast cereal or laundry soap. But experts say there is much more to the creation of a new image--or the repositioning of a basically good but outdated image-- than simple promotion of a brand name.
The initial element of any image-evaluation program is a thorough review of how you are currently perceived by four major constituencies: consumers, corporate customers, investors, and your own employees.
"You want to find out what people know about you--your strengths and weaknesses,' says Joel B. Portugal of Anspach Grossman Portugal Inc. in New York, an image-consulting firm.
Many larger banks already do extensive and regular consumer attitude surveys. Bank of America, for example, performs surveys of thousands of consumers twice a year, to help reveal "what we're doing right and what we're doing wrong,' says John Mickel, executive vice president.
Sun Banks of Florida currently is surveying 6,000 customers in an effort to check product awareness, the degree to which customers use the bank, and "how well Sun measures up' against the competition, says N.W. "Red' Pope, senior vice president of marketing.
"The feeling that a lot of bankers have is that there's change going on, but they're not driving,' Mr. Pope says. The consumer attitude surveys help dispel that feeling, he says.
Not surprisingly, the banks that have the most to gain from consumer surveys often are those that haven't read the marketplace in a while.
Hibernia Bank, a $1 billion-assets San Francisco-based institution that has long has a sleepy reputation undertook an image study when a new chief executive came aboard in May 1983.
Hibernia discovered that customers and potential customers perceived the bank in a "generally positive light,' but definitely not as a leader, says S.B. Master, assistant director of the special projects group at San Francisco-based Landor Associates consultants.
Many consumers thought of the bank simply as a good place for a car loan-- a carry-over from a heavy car loan promotional motional campaign years earlier. "That just seemed stuck in peoples' minds,' said Frances Vinia-Snyder, Hibernia's public relations manager.
Where Is Management Taking the Bank
Hibernia saw in its consumer surveys that its image "was not relevant to what it wants to become,' which is a financial services leader for middle- and upper-middle-calls consumers, Ms. Master says.
What you want to become--your strategic plan in its simplest sense--is what guides a professional image consultant in corporate "makeover.'
Top management is interviewed in person "to find out where they are going to take the company, how long it's going to take to get there, and how they want to by perceived' by the marketplace given those goals, says Mr. Portugal.
"A good consultant has to be able to evaluate managements' answers, and play it back to them,' he says, to be certain that all managers have a clear picture of the bank's direction.
But the strategic plan shouldn't stop at the executive suite, experts warn. Although it should seem obvious that you can't create a new image for a bank if employees don't know their role, Mr. Furash contends that "many banks make the terrible mistake of keeping their strategic plans a secret from employees.'
Hibernia's management decided its vision of the bank's future wasn't achievable without strong employee involvement, Last May, all 1,000-some employees were invited to mixed-media presentation with top management to explain the bank's new direction, Ms. Vinia-Snyder says.
Also, employees will see Hibernia's new advertising campaigns before they hit local media, so employees will know exactly how the bank, and each department's role in the bank, will be portrayed for consumers.
When a bank seeks to create an entirely new image for itself, sometimes the smartest step it can take is to change its name, image consultants say.
Financial services companies have led all other industry groups in name changes in recent years, according to regular survey by Anspach Grossman Portugal.
In 1983, 502 major banks, thrifts, investment firms, and insurance companies changed their names--about 47.6% of the total number of changes in AGP's corporate universe.
In the first half of 1984, financial institutions accounted for 45.8% of the total, still the leader.
Two big reasons for that: the torrent of mergers int he industry, and the predominance of outdated and uninspiring names.
"There are only about eight words --including first, national, and bank --that make up the typical bank's name,' says Mr. Purvis at S&O Consultants. Untold numbers of "First National Banks' still dot the U.S.--indistinguishable from each other to the casual observer.
Imagine, says Mr. Portugal, if Citibank had tried to skip its way across the nation in its previous incarnation of First National City Bank.
In the late 1970s, Western Bancorp, felt it needed a new name and identity to emphasize its predominant position with 21 banks in 11 states. As most bankers are well aware, Western in 1981 became First Interstate Bancorp., a name created by S&O Consultants.
The First Interstate name (which S&O admittedly was shocked to find hadn't already been taken) achieves the ultimate goal of the company's identity campaign. "It allows the company to operate as one entity in the consumer's mind,' Mr. Purvis says.
Scores of major banks have changed their names in recent years to form the basis for new identity campaigns, and to unite what often are fractured institutions under a common heading. Often, a new name is designed to connote more a feeling about the institution than anything functional.
For example, Industrial National Bank of Rhode Island has become Fleet National Bank; Buffalo Savings Bank has become Goldome Bank--a play on the bank's gold-domed headquarters building in Buffalo, but a name that can be used nationally because it can be interpreted in other ways by consumers who have never been to Buffalo.
"Most banks know that their current identifiers are not particularly functional anyway,' says Otto L. Spaeth Jr., an identity consultant with King-Casey Inc., a design and consulting firm based in New Canaan, Conn.
The traditional bank name--the word bank, the name of the community, the word national--"is pretty deeply rooted in the past, and pretty difficult to connote that you're now offering brokerage services, that you want to be credible in insurance, etc.,' he says.
A nonspecific name like Goldome, however--which King-Casey helped design--can comfortably be used as an umbrella identifier for all types of financial services, according to Mr. Spaeth.
Modernizing Current Identifier
Adopting a new name is a major step, and one that many banks may not be prepared to take. Importantly, many banks have claimed success in new image campaigns with less dramatic changes to their corporate identifiers.
Four years ago, Indiana National Bank in Indianapolis dropped the "bank' and began to reposition the bank in the minds of consumers and corporate customers.
Although the bank's attitude surveys told management that consumers perceived the bank as safe and solid because of its long history (it is 150 years old this year), Indiana National realized that "the duration of our existence isn't what's important--it's the substance of what we do,' says Warren L. Smith, vice president and advertising manager. "We want to be known as a bank that can approach any market innovatively.'
A new slogan, "Pioneers in Banking,' is one message the bank used in its repositioning campaign. It also modernized its corporate symbol, an American bison, to increase its prominence in the image campaign.
San Francisco's Hibernia Bank also found that a name change wasn't necessary to reposition the bank's identity, Mr. Master at Landor Associates says.
Hibernia is an old poetic word for Ireland, but Landor's image surveys showed that "only a tiny portion of the public had any idea what Hibernia meant,' she says. "But they thought of it as a pretty good bank.'
The firm decided the name--redesigned into a more stylish logo--could be used to spearhead the bank's new identity campaign.
Image Is Many Things
No consultant worth his retainer ever would suggest that you can give your bank a new identity simply by calling yourself something new.
"To change a name and a logotype and nothing else is just cosmetic,' Mr. Portugal admits. "You have to have performance.'
In fact, some banking consultants believe that a publicly held bank is much smarter to concentrate on upgrading its image with investors than to worry about a new consumer-oriented identity campaign.
"There's a lot you cna do to get your name spread around the capital markets. If you do that right, you don't need to do much of what the image doctors sell,' says David C. Cates, head of Cates Consulting Analysts Inc. in New York.
"The quiet effect of a good standing with analysts and investors cannot be overemphasized,' he says. "Your name will show up on investment lists and will come up at cocktail parties. It radiates throughout the affluent part of the country.'
Some experts also suggest that simply increasing your promotional budget will achieve the same effect as adopting a new image.
"Very often, the reason banks have image problems is that they haven't spent much money on advertising and marketing,' says Mr. Furash.
But the image doctors disagree. "If your identity is not distinct, you'll have to spend more money first saying, "Hi, remember us?'' Ms. Master says. A solid identity means "you can concentrate on selling your products and services in your advertising.'
Whether you adopt a new identity or simply choose to fine-tune your current image, it's crucial to remember that a lot of "little things' meld together to create your image in the consumer's mind.
Indiana National's Mr. Smith says the bank saw there was a variety of things it could do to upgrade its image, including stressing "cleanliness in the branch --the lack of clutter.'
"We also emphasized to our people the importance of the way the phones are answered, and the way we respond to problems.'
Sun Banks' consumer surveys showed that customers wanted to move through drive-ins quicker, and they didn't like the design of their monthly statements. Sun also learned that, at least in Florida, "courtesy is just as important as product' to customers, Mr. Pope says.
Indeed, image consultants stress that the failure to imbue your employees with the spirit of the bank's new identity --whatever it may be--may make your promotional efforts worthless.
What kind of identity campaign, for example, will overcome a bad reputation that bank employees make worse through insolence or inaction?
How you deal with the press also can influence your public image to a great degree. A responsive public relations office and accessible top officers can mean greater exposure for your bank in many banking trend stories--where you are given the opportunity to portray yourself as a leader.
A fortress-like or unattentive attitude toward the press, on the other hand, will not benefit your bank. No press might have been good press before deregulation, but how many banks now can afford to pass up a chance to discuss products or services in this more competitive environment?
Finally, Mr. Mickel at Bank of America stresses that an important aspect of any identity campaign is that "it must be believable.'
"Don't go out and try to position yourself as an innovator when you haven't done an innovative thing in 20 years,' he says. The first people who will laugh will be your own employees.
But what is there to sell, if not innovation?
Hibernia Bank's new identity campaign stresses the bank's "flexibility.' Ms. Master at Landor Associates calls the approach "the diametric opposite of the Citicorp approach. We're saying we care about you as an individual, enough to respond to your individual needs.
The bank's ads define flexibility as "the ability to reach outside one's own point of view, retaining purpose and balance.'
David Beck, president of the $930-million assets Citizens Bancorp. in Sheboygan, Wisc., may have the best answer for many banks searching for the proper image: "We're trying to convey a new image of somebody who is really trying to accomplish a lot for our customers.'
The image most consumers in Citizens' markets have of the bank is simply that it's "rock-solid forever,' Mr. Beck says. What he wants consumers to perceive from now on is that the bank is solid, and that it can provide the same myriad of products that "Sears, Merrill Lynch, and others' can provide.
Mr. Beck has decided that the best way to foster that image is by joining First Interstate Bancorp.'s franchising network. The Citizens name will change to First Interstate in August.
"We want to be a major regional bank within the state,' Mr. Beck says.
But the bank also wants to convey a new sense of value to the consumer on a par with national institutions. With the financial services resolution still in its infancy in many respects, Mr. Beck asserts, "We decided that if we're ever going to change our image, now is the time.'…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Is a Bank by Any Other Names as Effective in Era of Change? the Financial Industry Faces Issue of Rebuilding Images as Its Markets New Services in the Climate of Deregulation. Contributors: Petruno, Tom - Author. Magazine title: American Banker. Volume: 149. Publication date: August 24, 1984. Page number: 26+. © 2009 SourceMedia, Inc. COPYRIGHT 1984 Gale Group.