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

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

Overcoming the barriers to succesful DM branding in consumer financial services

Shifting to a longer-term strategic focus DM branding judges and agencies maintain that financial services providers require an internal brand champion or external brand guardian; providers also need to invest in the company or corporate brand and to avoid ‘bolt-on’ branding or ‘one-off DM. A bonus for meeting brand objectives (in addition to sales objectives) would give an added incentive to client direct marketing employees to work to longer-term goals and to monitor consumers’ brand and relative brand attitudes. Regular tracking of a panel of mail recipients for their brand attitudes (in addition to their response rate), carrried out by a few larger organisations, mainly in sectors other than financial services, resulted in a longer- term, ‘on-brand’ approach with future campaigns based on shifting the researched attitudes in a specific direction.

Integrated customer information system If cross-selling, providers need to ensure that current customers’ product portfolios are taken into account in order for existing customers to respect the sender. The proliferation of ways in which a customer can contact the financial organisation is continuing and will increase the difficulty of collecting, organising and constantly updating small amounts of relevant data across a range of distribution channels and across a portfolio (usually just a handful) of products per customer, into individual customer files. Ideally, permission should be sought from existing customers prior to mailing, for example: how frequently do they wish to be contacted regarding product development and via which preferred media? Preferences would need to be double-checked over time, since consumers take varying amounts of time to adopt new channels of distribution, as has become evident by the fairly gradual consumer adoption of direct purchases.

Customer research-led differentiation

Greater brand clarity is assumed by interviewees to lead to less switching. This view is supported by the literature where true brand loyalty is seen to depend partly on repeat purchase and partly on consumers holding a ‘high relative attitude’. This means that organisations need to measure not merely the strength of familiarity, or brand awareness for the chosen brand, but also how highly consumers rate the chosen brand in relation to competitors.

Greater reliance on consumer research (or deeper analysis of research findings) was again suggested by interviewees, as a solution to a fundamental lack of differentiation in brand values and propositions between many financial services brands, on variables meaningful to the consumer. Interviewees maintain that too many companies share similar and therefore undifferentiated ‘core values’, such as innovation or ease of access, which have now become hygiene factors in this sector. This finding is surprising given that large organisations such as financial services providers have the resources to conduct customer research. Perhaps DM agencies, who should be interacting on a more direct level with customers than traditional advertising agencies, are not furnished with enough ‘directional’, non- transactional data or analysis from such customer research, although some agencies suggest that the brief timescales often allocated to DM campaigns may also prevent them from finding informed solutions.

A suggested barrier to differentiation by large consumer financial services providers is the sheer size of the historic customer bases. This view neglects database marketing strategies, however, such as discrete targeting, which can be used to avoid the problem of alientating core customers, as demonstrated by the Diet Coke example discussed under relevance in the Appendix.

Creative experimentation, budgeting for flops and introducing bonuses for creating brand-building DM are solutions that also impinge on financial planning. Other differentiation strategies like brand personality (Goldfish) and brand as policy (Co-op Bank) are detailed in the Appendix. It is worth noting that stronger financial services brands, such as First Direct, employ a mix of the suggested solutions for differentiation. Indeed interviewees, who were shown the Goodyear (1996) Brand Role Taxonomy and asked to place brands in each role, classed strong brands such as Virgin simultaneously across several ‘brand role’ categories: brand as personality, brand as policy and brand as icon. On the other hand weakly differentiated brands, including most of the High Street banks, mainly fell under ‘brand as reference’ where the role of branding is limited to rational attributes to guaranteeing quality or to identifying the product(s) offered.


Brand values need to be brought to life; this has been achieved in DM by showing competitive performance outcomes (like First Direct) and/or by adding value that is meaningful to consumers in the ‘fulfilment’ stage and service delivery wherever possible.


Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

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