Utilizing Your Strongest Asset

Donovan Cronkhite
President, RJM

Posted On January 2, 2018

The world of banking is tried and true. It’s been around since the 18th century, and quite frankly hasn’t changed a lot – money is deposited and loaned out. As a result, one bank starts to look identical to the next. As competition from national banks and credit unions heat up, the only way to stay afloat is keeping your bank from getting lost in the battle of the banks.

Differentiating Your Bank’s Brand

There are hundreds of financial institutions in Michigan. How does a customer decide which to use?

Simple. Brand differentiation. 

A brand is more than your logo, name, or hiring local community members. Your brand is your customers’ and potential customers’ perception of your bank. It’s the intuitive “gut feeling” they get about your products, services, and company.

Simply put: your brand is what they say it is, not what you say it is.

Why Brand Differentiation is Undoubtedly Your Strongest Asset

Building a brand is an art and a science that doesn’t occur organically. It requires full participation by every member of your staff. You can’t control it, but can influence it through the actions of staff, branch locations and appearances, ad messaging, and so on.

Building your brand starts with positioning, or the process of differentiating your bank in the minds of customers to gain a competitive advantage. When your brand is differentiated, it has a unique position within the market, which will drive profits and avoid commoditization. 

Brand Perceptions are Based on Four Main Concepts

  1. Trust: the foundation of every brand. Customers trust your brand when their experiences consistently meet or beat their expectations. Design is a huge component of this.

         Example: Snuggles

    •  The fabric softener brand has used imagery to capitalize its influence on the buying decision of customers with the use of a teddy bear to further convey that their product makes your clothes snuggly soft just like a teddy bear.

  2. Equity: the one asset that is not accounted for on a balance sheet, but directly influences how quickly and easily customers can say yes to your offerings. In other words, the market strength of your brand.

         Example: Hershey Co.

    •  According to Forbes.com, Hershey Co. is one of the most valuable brands in the world. This is due to their ability to define their position through product differentiation, tell their story through media, and personify the brand through imagery.

  3. Symbolic Cues: a bigger influence on the buying decision than price, features, and benefits.

         Example: McDonalds

    •  The symbol behind McDonalds is the iconic golden arches. This company has managed to turn a capital M into “golden arches” that are easily recognizable and create an instant link back to the company, which fuels purchase decisions.

  4. Charismatic: a brand in which consumers feel there is no substitute for. This is nearly entirely based on emotions and feelings the aesthetics of the brand evoke, rather than the products and services themselves.

         Example: Starbucks

    • Coffee is a commodity, but Starbucks has turned the market upside-down collecting a premium for their product. Their packaging is unmistakable, their stores elude authenticity, and each customer’s experience is hand-crafted just for them.


Think your bank has conquered the brand differentiation struggle?

The ultimate test is answering three short questions without hesitation or ambiguity. Your answers must be compelling. If they are not, your brand is lacking a definitive and irresistible reason for consumers to choose you over other financial institutions.

Three Differentiation Questions:

  1. Who are you?
  2. What do you do?
  3. Why does it matter?

Think that was easy? Compare your answers to the following two examples because answering the questions are easy, but providing quality, worth-while answers is the difficult part. The first is a poor example for a fictitious bank, Community Bank. Take note of the three answers given for question three and the rebuttals for each. The second is a great example for John Deere. 

Poor Example: Mich. Community Bank

  1. Who are you?
    • We’re Community Bank, a Michigan financial institution.
  1. What do you do?
    • We provide financial services to local residents and businesses.
  2. Why does it matter?
    • Because we have the best people. (Prove it.)
    • Because we care about our community. (But everyone says that.)
    • Because we are local and our customers have known our employees their whole lives. (But local people work at the area’s credit union and big bank too.)

Good Example: John Deere

  1. Who are you?
    • We’re John Deere.
  2. What do you do?
    • We make farm tractors and related equipment.
  3. Why does it matter?
    • It matters because generations of farmers have relied on our equipment.

The Next Steps

If you didn’t have a problem answering any of the three differentiation questions, then you are one of the rare institutions with a distinct competitive advantage. If you are like the overwhelming majority who had trouble, then it’s time to take a dive into what makes your bank tick to establish that competitive advantage.

Start by asking employees and customers what makes your Michigan community bank different from competitors. When doing this you may discover that you don’t have a distinctive competitive advantage. That’s ok, sometimes you have to make changes in order to cultivate the advantage.  

Establishing what makes your bank different from other financial institutions may be the basic aspect of branding, but it’s by far the most difficult. Don’t be afraid to ask for help or to seek out other resources that can make the process easy and successful.