Brand & Communications: Past, Present and Future

04/27/23
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Author:Ian Newman

Partner at Senteo, graduated from Batley School of Art and Design. His experience over the last 20 years, working across a diverse range of industries, gives him a unique view of how the creative process can be a valuable tool within a wider business transformation process.


“If we are talking about building loyal customer relationships, the banks will need to pay much more attention to post-purchase communications”.

The evolution of branding and communications in Russia characterizes the very nature of this fast-growing emerging market. As a long-time professional in this field, I would like to offer some views and observations that would hopefully paint a fair picture about how branding and communications have developed in Russia’s retail banking sector over the past 10-12 years, and indicate trends that will likely shape the future.

The Past:

We often like to say, “Brand is not a logo, nor is logo a brand”. And still, in the early 2000s, especially among the retail financial institutions operating in Russia, a “brand” was manifested primarily though the corporate name and a logo. A sign that read “Bank” offered instant recognition of the nature of the business and customers had generally undifferentiated views about this or another bank. To them it made no difference: a bank is a bank.

Today when I walk on the streets of Moscow, it feels at times like many other big Western cities, especially as I take in the stores, shops, and restaurants – and specifically the names, branding, and communications. Much has changed over the last decade, and the pace with which these changes have taken place is astonishing.

Of course, the consumers by virtue were not very sophisticated at the time. Yet, the banks lacked the same quality, owing to the fact that they were entirely product-oriented. And since most banks offered pretty much the same service, the use of their brands was primarily limited to one goal: name recognition.

Internal PR departments tended to be the ones in charge of managing the corporate brand, which basically came down to advertising and promotion. It wasn’t until later that banks started to even have brand managers as a full-time job function. Meanwhile, the marketing departments did mainly research.

Ad campaigns were run through traditional above the line (ATL) channels (TV, radio, billboards, newspapers and magazines), while forms of customer communication were often limited to just brochures and, occasionally, posters. Almost no one really measured campaign effectiveness by, for instance, looking at how much was spent to acquire a single customer. So, the main purpose of branding and communications in the past was two-fold: get name recognition and advertise products.

The price of a product or a service was the key message used to compete for customers. Because of the lack of customers’ association with any banking brands, the brand alone had hardly any value.

Illustration:

The Present:

During the last five or six years there has been tremendous progress bringing the Russian retail banking industry closer to international standards, as far as branding and communications are concerned.

The newer and refreshed logos are now accompanied by catchy slogans, the visual imagery is more aesthetically pleasing, brands are being positioned in the marketplace, and everyone seems to have adopted a practice of setting brand values and missions.

As far as organizational structure and functions, there is now a greater level of integration between departments that work on market research, PR, brand management, and communications.

At the same time, customer communications have become more graphic, creative, and sophisticated with the use of a proper media mix that includes above the line (ATL) and below the line (BTL) marketing, merchandising and literature. Promotional campaigns, direct mail, localized campaigns, internet banners, emails, and viral marketing have heralded the age of modernization and greater professionalism. Some of the banks have even learned to measure campaign performance and the effectiveness of their marketing budget.

As one of the notable developments, the key message for retail customers has shifted towards making informative statements about service benefits and product features. However, the main focus is still on the product (its price, features, terms and conditions) and not the customer. Hardly any communications that we observe today speak about the benefits that customers would experience from the relationship with their bank, which transcends the use of a single product, such as a deposit, a credit card, or an auto loan. Banks still advertise products and they tend not to talk much about the value of the relationship. Popular slogans and general image-building statements, such as “we are always with you”, “customers come first”, “we’re just around the corner”, do not adequately capture the relationship aspect, other than making a certain limited promise.

Moreover, retail banks in Russia, to a large extent, do not use segmented brand and communication strategies. They simply separate their overall marketing strategies into retail and corporate client groups, perhaps adding the VIP segment that focuses on the high-net-worth population. Essentially, the segmentation approach for branding and communication, if any, focuses on income levels and other basic demographic characteristics.

But things are quickly changing, offering a view of what the future may hold.

The Future:

What took the West over several decades, in terms of historic evolution, has taken place in Russia in just several years. The future seems to arrive here very fast, whether by importing international best practices or by innovation. Russia is truly an exciting marketplace.

Following the footsteps of general retailers, FMCG, and telecom sectors, the retail banking industry all over the world is gradually shifting to more emotional content in its branding and communications. Some are even parting ways with the word “bank” in their name. The sharp contrast, suggested by this departure from the traditional way of positioning themselves in the market, indicates that banks are undergoing a certain evolution. Indeed, after experiencing the jolt of the international economic crisis, banks are eager to change. The level of heightened competition for loyal customer relationships is forcing the banks to look outside the box, even if it means adopting revolutionary methods and making drastic changes. There are enough examples, even in Russia, that offer a glimpse of the future.

As it concretely relates to banking brands and the style of customer-oriented communications, retail financial institutions will inevitably have to adjust in order to create an emotional appeal to a diverse group of customers. It will require them to properly recognize each customer segment and what drives and motivates customers in not just day-to-day life, but also long term. This means that banking brands and their positioning will need to shift towards a relationship-centric model that focuses on the benefits and outcomes gained by the customers due to the relationship with their choice provider of banking services.

Communication campaigns and literature, regardless of their type or form, will need to be fine-tuned to deliver a clear message to customers that banks actually can play a more substantial role in life than just offering this or that isolated product or service. As a result, the value proposition itself will change.

A proper brand construct should include a brand story, a personality, distinct attributes, a tone of voice, and a visual style that combine to form a unique brand identity. When talking about brands, I often make an analogy to a human. The brand is a live organism. It is not just a drawing on a piece of paper. It has a past, a present, and a future like any other live being. It has a certain attitude, and it appeals to a certain group of people who form a circle of friends that associate with it. Brands, just like people, can have friends (i.e. customers) of different backgrounds and social standings. But more importantly, these “friends” can find something in common in terms of their opinions, aspirations, and dreams. That is why friends like to hang out together; because they share a common interest and also because they help each other. And if that friendship is good and regularly rewards both sides with positive experiences, the relationship is likely to last for a long time.

All loyal friendships are based on a strong and trusting relationship that is forged during good times and bad. It certainly does not come overnight. And it most certainly does not originate from just one or two isolated instances of cooperation over a set term or within a certain deadline. That is why banks must eventually reform themselves and put away their product focus in order to develop loyal customer relationships. This kind of thinking must visibly manifest itself through brand and customer communications.

Furthermore, a truly successful relationship must play a genuine and relevant role in each partner’s life. Therefore, each contact or an event where the two sides come to meet should be meaningful. If one side solicits the other on a regular basis with useless or irrelevant information, the other side will naturally grow distant and distracted up to a point where that relationship may deteriorate and wither. To approach this challenge, companies should carefully construct and integrate internal functions to support the brand organism and use effective communications to promote the relationships with all of its many “friends”, regardless of their size, shape, and gender.

In addition, since we are talking about building loyal customer relationships, the banks will need to pay much more attention to post-purchase communications. Presently, too much attention is given to attracting new customers and driving sales, as opposed to retaining customers and expanding their already existing relationships to create more attachment. For that purpose, I think the future methods of communication will tend to be more targeted and use an even greater variety of delivery methods, especially digital communications.

The internal organizational structure that would support the future approach will have to be more sensitive to customer segments. Essentially, as the supporting functions for the overall “retail” business line, the appropriate departments will begin to adopt a segmented model, whereby their work deliverables will have to correspond to respective customer segments (as indicated in the above illustration).

Obviously, purely cosmetic changes alone, through graphic rebranding or refreshment, often witnessed in a form of new logotypes, color schemes, photographic images, and various other design elements, will remain just that: cosmetic changes. In other words, putting a new sticker on the same old car is not going to make it more comfortable to drive. Personally, I find the “lipstick on a pig” analogy more amusing. While it is funny, it is also absolutely true. Too often we see companies apply lipstick to cover up what, in essence, has still not changed. As Steve Jobs once famously said, “Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works.”

In the near future, retail banks will have to learn to be as agile and open-minded as their peers in other retail sectors. I would like to particularly mention the telecom industry as just one example, because they seem to be much more “in tune” with consumers.

Telecoms tend to have a massive and, at the same time, very diverse customer base. To be successful, they have to appeal to each segment in a different way. They constantly innovate, adjust their offering, introduce various perks and rewards, use modern and sophisticated technologies, and generate some of the most creative campaigns. They are just constantly on the move. It is the nature of their business, especially given the ease with which customers can switch from one provider to the next. So, the fun never stops for the telecom companies. Nevertheless, in terms of brand management and the style of their communications, I would venture to say that telecom companies are way ahead of their retail banking colleagues who share many similar challenges.

While I do not expect most of the retail banks in Russia to transform overnight, I believe a few prime candidates will drive change and force others to follow. Today, we already see clear signs that the market is ripe for change and that customers are more than ready to receive it.

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