14 Jun The Hidden Power of Brands
Your Brand is not your logo, not your name, it is the vision that drives your business. (Jean-Noel Kapferer)
Imagine I am presenting you with a bar of soap. It’s a white rectangle. There is no packaging, no logo, it is just a bar of soap. You pick it up. It feels like soap. You smell it. It smells like soap.
What words come to mind when you think of soap?
Fresh. Clean. Hygiene. Something like that?
What if I were then to tell you that this is Body Shop soap?
Now what comes to mind?
Not tested on animals? Expensive? Conscience?
This is Brand.
This is the power of brand – to elicit associations, feelings, words, and a certain position in the mind – to connect on a functional and emotional level.
This is one of the hidden powers of brands – consumers use them to continually form and re-form their self-identity.
As a services business, this is where things get interesting.
Models of brand and branding have always tended to be focused on products and physical goods.
Do the principles of brand still apply to our services?
Absolutely. Let me give you an example.
Think of a home mortgage. Other than the home you live in, there is nothing tangible about a debt. In Australia, if we looked at our Levels of Market Competition tool, we would see direct competitors in the centre. They would represent National Australia Bank (NAB), Westpac, Commonwealth Bank of Australia (CBA), St George Bank and ANZ.
Outside of the core, we would see a band of indirect competitors. Here we would see a multitude of players like Bank of Queensland, HSBC, RAMS, Mortgage Choice, CitiBank, Bank SA, ING Direct, RaboBank, Bankwest, Suncorp Metway, Credit Unions, Building Societies, or you could just get a home loan through realestate.com where you bought your house.
If you are concerned about the security of your financial assets and believe size is important, you would most probably choose a major bank.
If we don’t like the slow and impersonal service of a major bank, we can go to a smaller one like Bankwest and try ‘Happy Banking’.
If you are concerned about convenience and don’t want to go into a bank building at all, you might take a loan with an online bank.
I need to let you in on something here.
Westpac owns St George, Bank of Melbourne, BankSA, BT, and several others.
NAB owns Ubank, Plum, JBWere, MLC and several others.
CBA owns Bankwest, Aussie, Colonial First State, and many more.
There are people in the market who will never bank with Commonwealth or Westpac – for whatever reason. So these brands are there to serve them instead. The newer, Bank Australia is a conglomeration of multiple credit unions who now go by the name of Bank’ to avoid the any perceived negative connotations of ‘union’.
What about a realestate.com home loan? Sorry, that’s NAB as well.
Scott Bradbury (Apple and NIKE advisor)
A great brand taps into emotions… a brand reaches out with a powerful connecting experience. It’s an emotional connection that transcends the product itself.
The Commonwealth Bank of Australia owns a hard-earned and well-deserved reputation for terrible customer service. No offense. Queues are long. Staff are bored and impersonal, rude even. As a customer, you’re a number and a cog in a wheel.
So why are they Australia’s biggest and most profitable financial institution?
What gives the power?
What is it about the Commonwealth brand that has this power? Is it the history? After all, it was Australia’s first bank. It has buildings here and there made from sandstone and marble. What does this tell us?
It’s our money, we’re talking about. We are willing to trade service for security.
The position that the Commonwealth Bank owns in the mind of the Australian bank customer is ‘Security’. That is the psychological priority for its customers. In other words, the power comes from positioning. Positioning is owning territory in the mind. The territory is won through classical conditioning.
The conditioning occurs by bank executives understanding the importance of this one attribute to a segment of the market. And then repeating that message of security, over and over and over again. As it is almost impossible to change people’s minds, positioning rarely changes.
Each of these separate bank brands has a different positioning relative to the others. The only real difference is psychological.
The more intangible our product is, the more important our brand and emotional connections become.