The current economic crisis marks an inflection point where the world will never resemble what it was. Many consumers and their families are shaken by the financial impacts of unemployment and disruptions to their daily lives and routines. Business leaders continue to juggle firefighting tactics, new positioning strategies and adapting their long-range growth plans.
The degree of success for financial institution leaders in the post-recession will be dependent upon the very decisions and strategies they put in place today, the transformations they embrace, and their competitive positioning to help them grow, thrive and win. Todd Kern, Frontwave Credit Union’s CMO, reflecting on the challenges faced in 2020, “It was extremely helpful to have a solidified brand as a North Star helping guide us. We never wavered through the crisis. We leaned into our brand of being ‘fighters’ which guided us and fueled our tenacious spirit to serve our members and communities extraordinarily well during this time. Without our brand focus, we wouldn’t have been as prepared to respond as quickly in relevant ways in helping our membership and being there for them.”
The Covid crisis has pressure-tested and shocked many financial institutions’ brands. From competitive positioning and tone of voice to messaging and inclusion, it’s all being put on the table for critical examination, and many are discovering their brands have languished, and are not well-positioned to weather this storm.
Having guided hundreds of financial institutions in their brand discovery and strategic positioning, Strum has identified three cultural brand traits that will help credit unions navigate this recession and position for growth ahead with their brand.
1. Genuine focus on the member
Being member-focused begins with answering these questions: how well do you know your members and what do you know about them? Some financial institutions struggle to answer this question. At first glance it appears simple, if your answer is a generational description (e.g. Millennials) or is based off of old broad-based member segmentation (e.g. credit-driven borrowers) you may have an incredible amount of untapped potential within your data.
If insights into member life stages, financial triggering events, brand preferences, motivations and product propensity are missing in your organization, it’s like having one arm and leg tied in a race against the national mega-banks, fin-techs, and challenger banks who are already far ahead. The speed to leverage your data analytics to improve and enhance relationships is no longer an option. Knowing your members and building those relationships once relied solely on the person-to-person interaction, but now relationship building can be enhanced through the efficiency of applying data to achieve greater personalization and fulfilling member needs easier and faster.
The events of 2020 will forever impact consumers—shocking them into new digital shopping behaviors. According to a recent McKinsey Report (Oct. 2020) 73% of U.S. consumers intend to incorporate these behaviors in their lives going forward. If your brand is built around person-to-person relationships, how will your brand adapt and evolve to address these shifts and changes? What does your data reveal about how your members’ relationships have changed in 2020?
Consumers are exploring other brand options more than ever with an increasing willingness to break loyalty and try new brands that offer greater value. This will be a threat to some financial institutions who are not prepared to compete with greater personalization in a rapidly digital-shifting world.
With no shortage of consumer data now available, financial institutions must break down data silos to gain a full view of their customer and cater to their unique financial goals and needs. Consumers do not want to be sold products—they need smarter solutions, hassle-free experiences and sometimes personalized attention to help them manage their financial situation, perhaps now more than ever, with unemployment being the highest since the Great Depression.
Consumers expect personalization—especially from their preferred brands, but financial institutions have not done as good of a job as other industries in understanding their customers beyond demographics and current product usage. Uncovering what your members value and prize, knowing their brand preferences and shopping habits reveals a lot about them. It starts by leveraging your data.
In order to get critical customer insights, you need data analytics software tools that can integrate data, pull it together and be accessible on a number of levels within your organization so that it can be put to use improving customer lives with tailored relevant messages and personalizing their experience with your brand. Fin-tech platforms give easy access to this critical information and the insights necessary to serve customers extremely well and build loyalty with deeper customer and relationship insights.
No doubt financial leaders will continue to face challenging times until there are clear signs of economic recovery and consumers’ financial positions begin to stabilize. The actions taken now by the C-suite will directly impact the speed and return of their organization’s growth now and in the post-recession.
According to the Harvard Business Journal (HBR), defensive moves of aggressive cost cutting on the balance sheet—like marketing—in order to minimize expenses can have the unintended consequence of much slower growth in the post-recession era.
This strategy is deployed through a loss-minimizing lens. Whereas forward looking companies that deploy a careful balance of cost-cutting for greater operational efficiency, while still investing in the strategic tools necessary to hold a strong competitive position, recover and grow faster. HBR noted that forward-looking companies also stay closely connected to customer needs—a powerful filter through which to make investment decisions. Areas such as marketing and advertising spend, research and development, investing in business intelligence and data platform tools help lay the foundation for continued success once the downturn ends.
At Frontwave, Kern noted, “we would have not been in such a strong position internally to handle the amount of uncertainty and change in 2020 if we had not recently gone on this brand journey and engaged our entire staff in the process. The brand gave us clarity on our purpose, we were ready to work as a team and tackle everything that came at us.” Frontwave’s brand provided the cohesion, resilience, and readiness for the challenges 2020 threw at them.
A recent Gallup global study found that employee engagement drives organizational performance, especially during hard economic times and massive disruption. They found that highly engaged teams were more resilient than their peers during the 2001-02 and 2008-09 recessions. In fact, favorable job attitudes have a stronger relationship to organizational outcomes in bad economic times than in normal or good times. By developing a culture of employee engagement, leaders can forge strong, resilient organizations, teams and individuals. An organization’s brand is the rallying focal point of a thriving culture.
“I’m a firm believer that a strong differentiated brand tied to your culture really becomes your best weapon for success,” said Kern.
3. Daring to be different
No guts. No glory. We’re all familiar with this statement and it applies to reaching competitive brand distinction too, especially for financial institution brands who compete with commoditized products and services. Building a brand that captivates, resonates and connects to peoples’ emotions are the ones that will flourish with greater member engagement, higher Net Promoter Scores, higher employee satisfaction, greater retention and deepened relationships. But, uncovering, defining and building it takes guts from executive teams that dare to be different.
Josh Streufert, Strum’s Creative Director / Principal said, “The middle is crowded and is not necessarily extraordinary, but it feels safe. So, a lot of organizations are drawn there, compelled to put something right over the plate. The big challenge is there may not be room for them in the middle where it’s very hard to stand out. In order to differentiate, you might have to leave the middle, and go to some area that feels a little more vulnerable.”
Trailhead Credit Union knows this lesson all too well. Kim Faucher, VP of Marketing said, “we had rebranded before, but it never captured the unique spirit of our credit union, and it didn’t inspire our team, set us apart or help us grow. We played it safe and our brand reflected it—it was traditional, professional and it blended in too.” Faucher continues, “it took us a few years to realize that our brand was not leading to success, so we started another branding process, this time with Strum, and decided we would not settle for a ‘try-to-be-everything-to-everyone-me-too-brand.’ Instead, we dug deep and realized that what we tried to hide in our last brand attempt (our small size and respect for individuality) were some of our greatest strengths. Once we embraced our true distinction, we turned a corner from flat growth to 61.99% net membership growth from 2013 to 2019.”
Many credit unions’ future success will be dependent upon ensuring that their brand is poised to adapt and lead ahead. This requires both strategy and some measured risk-taking to achieve brand distinction, tackling problems with a bias towards creativity and investing in new methods and ways to get to know your members better.
Now is a challenging time for some credit unions to invest in growth while firefighting the challenges dealt by 2020. You may be wondering if now is really the right time for your credit union to reimagine and re-engineer its brand. Times of disruption may be the exact time to invest in your future. Disruption can be a catalyst for great innovation and creative thinking. If you found your organization not on solid-footing with your brand when this crisis hit, that’s likely a sign that it’s time to put the brand on the table and examine if it is strategically guiding and helping grow your credit union.
If the answer is ‘not sure’ or ‘no,’ now is the time to engage leaders in a daring discovery of your brand and its purpose.