Financial Services Branding in Troubled Times

Financial Services Branding in Troubled Times

Staving Off the Death Spiral by Finding Your “True North”

Blood on the Street

The financial markets have never been more volatile. Banks, liquidity venues and broker dealers are all starting to look alike – and sell the same products and services. In February 2009, the Dow Jones Industrial Average hit its lowest point since 1996. We all thought that was it: the worst had come and it would be smooth sailing from that point on.

Fast forward three years and we have glimpsed the other three horsemen of the apocalypse in rapid succession. We have ducked and covered so many times we can barely stand up. Mergers and bankruptcies happen every day and Eurozone backlash continues to have deleterious effects on the financial markets.

The bar for news has become a pole vault. Each time the North American economy underperforms, it sends spasms through the international markets, making it nearly impossible to get a vendor in the headlines unless they get indicted.

One would expect a PR professional to suggest that the communications campaign should not be the first budget line item to cut during troubled times, but self-preservation aside, abandoning your PR campaign during a bad market is almost always a bad idea. Perception is reality and a company must do everything to sharpen its brand to a precise point … and keep it in front of its constituents if they want to weather the storm.

Are You a Candy or Are You a Mint?

The biggest brand-killer in the marketing and PR game is the lack of a consistent message. If you poll a large base of customers and prospects only to find out that 20 think you’re an IT outsourcer, 10 think you are a consultancy and 25 think you are a quant shop, your ship is going to sink. This problem is compounded in a bad market because decisions are made against a backdrop of panic.

The old adage “nobody ever got fired for buying IBM,” rings truer than ever. Companies want assurances against financial failure, increased regulation, spending cuts, etc. A company with a clear, well maintained message is always the safest bet in a down market.

When a company is struggling to identify its corporate vision or “True North,” it needs to undertake an extensive audit of investors, friends of the firm, analysts, editors, partners and other constituents to gain anecdotal evidence that will help define its corporate identity, marketing messages, value proposition and product positioning. Some of the most basic (and illuminating) questions are as follows:

- How would you describe the company?

- What does the company sell?

- Who is the competition?

- What is the company’s competitive advantage?

- How big is the marketplace?

- What are the company’s biggest challenges?

- What is the best aspect of the company?

- What is the worst aspect of the company?

- What are the biggest benefits the company provides?

- How long will the company’s products/services be useful?

- What is the company’s exit strategy?

Elemental questions it would seem, but more often than not, the respondents – even those intimately involved with the company – sound like they are talking about completely different entities. This exercise is the quickest way to surface a perception problem. If the people closest to the company all think it does different things, imagine what the general public could be thinking! This kind of perception problem is particularly dire in a struggling economy. If you seem schizophrenic, there are a dozen competitors who have their marketing messages down cold and they would be happy to step in, dazzle your prospects and steal your sale.

Attracting liquidity: if you build it, they will come (eventually)

One of the more visible examples of fractured brand positioning within the financial markets industry is coming from the liquidity venues. Traditional stock exchanges are seeing order flow and liquidity being threatened so they are actively seeking new ways to improve service, increase product ‘stickiness’ and remain competitive. ECNs look nothing like they did a decade ago when projects like Optimark came blazing onto the scene, and MTFs in Europe and ATSs in Canada are doing their level best to attract flow and open up previously opaque markets like Fixed Income.

In the face of this identity crisis, traditional exchanges need to pay attention to the care and feeding of their own reputations and go after analogous markets in their acquisition benders to build brand equity instead of diluting it.

One objective (non-client) example of an entity we think is getting it right is the CME Group, which operates the CME, CBOT, COMEX and NYMEX. It has leveraged its innovation in technology to rapidly grow its business on the CME Globex trading platform from less than 15 percent of total volume in 2000 to nearly 100 of percent total volume today and nobody challenges their self-ascribed title of “world’s leading & most diverse derivatives marketplace.”

It is important to remember that success will not be achieved overnight. Expect to chip away for a while before you see results. It takes a long time to steer the Queen Mary with a toothpick, and everything moves more slowly in a bad financial climate. A sustained and circumspect approach to brand preservation will yield results over time as the markets continue to roil. The key is to be thoughtful and proactive in your efforts, make sure you have realistic goals and decide in advance how you are going to measure success. Plan for the long haul and decide how to approach your tactics differently than you would during a boom time.

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