Results of a J.D. Power and Associates survey, released in May 2009, showed that a mere 35 percent of customers were “highly committed” to their banks. Of concern was the fact that a customer’s higher deposit balance in a bank did not mean higher commitment to that bank.

Financial brands have apparently been slow to react, despite the depth of the crisis. A survey conducted by The Boston Consulting Group (BCG) in late 2008 found that less than 30 percent of consumers had been contacted by their financial institutions. The survey spanned six countries—Canada, France, Germany, Japan, the United Kingdom and the United States. The survey indicated that “consumers who have had contact with their financial providers about the downturn express a higher degree of satisfaction,” according to BCG.

For those tarnished financial institutions retaining their brand names, the road to regaining trust may be a long one. Citigroup, for example, was rated the worst of all banks in the Interbrand survey referenced earlier. Bank of America did not fare much better. “Bank of America and Citigroup, with all of the terrible publicity they’ve received, are natural targets,” says Charles Wendell, president of Financial Institutions Consulting (“More Clients Ready to Switch Banks as Trust Wanes,” American Banker, May 18, 2009). “Both have image issues that they have to deal with and concerns not only about their viability, but also their commitment to the markets they serve,” Wendell says.

Clearly, financial institutions are shell-shocked. “Industry giants like Citigroup are reviewing their public image and trying to keep a relatively low profile,” Story writes in The New York Times. “Many are reluctant to be seen as spending lavishly, on ads or anything else. [They are] trying to clean up their images in other ways, such as media relations and philanthropic efforts.”

In the mean time, the financial crisis among giants has actually bolstered the image of smaller institutions. The First National Bank of Orwell, Vermont’s smallest bank, had one of its best years in 2008, while the tiny Bank of South Carolina saw its highest growth ever in October 2008, reports The New York Times. “As bigger banks fail or merge, some community banks are absorbing growing numbers of depositors, while strengthening community ties and championing their conservative approach to lending,” writes Katie Zezima (“Vermont Bank Thrives While Others Cut Back,” The New York Times, Nov. 8, 2008).

“Smaller yet established banks and brokerages focused on the community or local region have less of an issue here when it comes to their brand,” says Dan Gershenson in a FastCompany blog (“Will small bank brands on Main Street seize the day?,” Nov. 4, 2008). “…by putting themselves out there as a voice of strength in a climate of turmoil, it reminds and reinforces the stability and consistency that these banks have. THEY still have the public’s trust by and large…”

So what should the big money brands do going forward? John Bell, head of Ogilvy’s 360° Digital Influence team, has this specific advice for them: Discontinue traditional advertising and instead help educate customers about personal finance. Communicate with customers directly via blogs and social networks. Encourage input from customers and react to it publicly. And build a trust-based community around the institution (“5 Steps: How Banks Must Regain Trust,” SocialMediaToday.com, Sept. 22, 2008). What that really means, Bell says, is “no more marketing as usual. The bank that embraces a smart use of social media and digital marketing will start to get trust because ‘they earn it’ – for real.”

Still, it is likely to take more than social media alone to make the big money brands recapture their luster.     

[29-Jun-2009]