Branding and brand development through direct marketing in the consumer financial services sector: CONCLUSIONS

Success factors and objectives for effective branding in financial services DM

Brand management literature contains a plethora of brand dimensions. This research highlights four key factors as crucial to the effective building of brand awareness and brand commitment through DM in the financial services sector. These are relevance; differentiation; brand consistency over time, in image and tone and across media; and credibility of brand proposition in relation to performance and/or service delivery. They can all be found in the literature on brand building, except credibility. Some good practice examples and the problems and solutions associated with strengthening these four success factors have been outlined in the Appendix. Consistency and credibility, like brand commitment itself, could be perceived as different from the first two success factors.

They constitute DM brand-building objectives, rather than brand-strength components. Designing measurement instruments for consumers’ views on a financial brand’s credibility would, however, be easier than operationalising how consistent consumers believe a brand to be, although Hawkes’ (1999b) Brandbuilder™ includes management questions on brand consistency, including quality and relevance of customer data collected. Levels of consumer brand commitment could be tracked by adapting part of Bloemer and de Ruyter’s (1999) Service Provider Commitment scale.

Overcoming barriers to DM branding and consumer criticisms of financial services direct mail

Specific barriers that may prevent financial providers from employing the branding success factors identified for DM above, can largely be arranged into four themes:

The last two issues have not proved insurmountable for financial providers above- and below-the-line in the past as demonstrated by First Direct, Direct Line, RAC and the Commercial Union (see Intangibility in the Appendix).

More investment in customer information and better dissemination of detailed customer research analysis to DM agencies in particular, would mean financial services DM could be made more relevant to individual consumers, averting the consumer criticisms of financial DM overload found in the literature review. The currently underutilised ‘one-to-one’ and ‘preferential marketing’ potential of the medium could benefit from this approach.

Too much emphasis on tried and tested formulae restricting experimentation could be overcome by introducing bonuses linked to branding as well as commercial targets and an allowance in the budget for flops. The direct marketing industry could raise its profile in branding, possibly through publicising case studies, in order to overcome all but the last of the following factors which were blamed for a failure of much consumer financial services direct marketing to deliver on the key brand-building components in the literature and on consistency, credibility and brand commitment:

A higher DM return on investment could be achieved, through better targeting and relevance, by simultaneously reducing mailing volumes but enhancing response rates, if financial services providers were prepared first to invest in small amounts of quality up-to-date customer data.

Selective frequency of contact in DM appears desirable for relationship marketing. Asking existing customers for their preferred channel of distribution and preferred frequency of contact should lead to increased brand esteem or bonding. Customers will subsequently feel that their views have been respected, as long as providers can ensure that mailing lists are cross-checked or ‘de-duped’ against those existing customers who have already bought the product.

Proposed three Cs model of objectives for branding in financial services DM

Although not originally an aim of this research, an alternative model for effective brand-building in consumer financial services DM is proposed in Figure 2, since the two brand-building models framing this study exclude desirable customer outcomes underlined by participants in the research. The model shows the three Cs, or core customer outcomes: brand consistency, credibility and commitment (incorporating bonding or esteem) as central objectives to be achieved via four brand-building components: familiarity, relevance, performance and differentiation. Figure 2 also summarises some key DM findings for each of the four brand- strength components.

This paper finds that developing ‘customer bonding’, where the customer feels ‘cared for’, which has been modelled as the highest level of brand strength, is inseparable in financial services DM, from the building of each of four key brand- strength components. This throws into question the divisional structuring of financial organisations. Building consumer brand commitment cannot be hived off as merely the responsibility of a loyalty scheme manager, but has implications not only for producing ‘on-brand’ DM, but also for overall customer relationship management.

 

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