Effective strategic online brand management in the financial service industry is today essential to survive in an increasing competitive marketplace. Accurate consumer insights along with effective internal management of resources are vital elements in order to reap the benefits of a differentiated and relevant strong brand.
One of the great advantages in today’s online marketing and online social network arena is that companies can blend valuable services with advertising and content: maximizing shareholder value and building a stronger brand equity. However most companies in the financial industry are not thriving to take advantage of this and instead are creating big buzzes and viral campaigns that are not aligned with their brand’s promise, are not generating a ROI and could even result on damaging their brand equity.
Based on this observation, I decided to write this post to look back at some of the most important principles of brand management and to point at the critical success factors required to reap the benefits of building a differentiated and relevant strong brand online.
Back to the Principles
Although the origin of branding as an identification mark can be traced back to the middle age (476-1492), branding as a management discipline did not begin until the early 90’s. In 1991, David Aaker published one of the most important books on brand management, where it was finally defined what brand equity is and how to build it.
In the first page of his book, Aaker quotes Larry Light’s vision of brand management 30 years from then:
In the late 80’s, Larry was asked by the editor of the Journal of Advertising Research for his perspective on marketing three decades into the future. Light’s analysis was instructive “The marketing battle will be a battle of brands, a competition for brand dominance. Businesses and investors will recognize brands as the compnay’s most valuable assets. This is a critical concept. It is a vision about how to develop, strengthen, defend, and manage a business… It will be more important to own markets than to own factories. The only way to own markets is to own market-dominant brands.”
Today we know that Larry was right and his statement has gained importance in a social media context where there is more transparency, interaction and feedback are possible and where there is a high visibility of consumers’ opinion about brands. For this reason, brands are doing great efforts to enter the conversations and to establish a good online presence. Firms are desperately trying to understand how this new environment works and trying to build awareness by publishing and sending various messages and actions, which unfortunately most of the time are disconnected from their brand purpose. While this type of campaigns can generate buzz and followers creating awareness, in the long run they can become a liability for firms as they will be attracting the wrong target groups and promising things that their brand do not stand for.
It is important to look back at the brand building principles that have been established throughout the years and adapt them into the online marketing world.
The secrets of social media were revealed 50 Years Ago
In a recent article published by the Harvard Business Review (17th of June 2011) David Aaker reminds us that the secrets of social media were revealed 50 Years Ago. David suggests that in order to employ social media effectively a brand needs to deliver extraordinary functional, self-expressive, or social benefits. That is more likely to be the case when the brand is associated with an offering that is innovative and differentiated in a way that truly resonates with customers. It is unlikely to happen when the brand represents a me-too offering in an established category or subcategory. So it comes back to creating and leveraging innovation and differentiation and integrating it into the new communication channels.
Top Reasons for Failure
The reason why many companies are not managing to leverage their brand through their social media actions is because there is a lack of alignment and communication between:
-Top Management who should define the direction and support social media actions,
-The Product Development department who should define the functional and emotional rewards of the product based genuine client needs and
-Marketing who should package the product and service into a brand experience which is relevant and differentiated
I have recently attended some online marketing experts summits where I realized some of the challenges which marketing managers are facing: while they are successfully launching viral campaigns, these are not creating a ROI and are not in line with their products and brand.
The reason for their failure is that besides the complexities that social media can present as a new activity, in many cases it is hard for them to convince top management of the importance of social media. So when they finally get a small budget approved they are not able to run the whole multidisciplinary process. They instead desperately aim at making a big buzz through viral messages that can justify their actions but which unfortunately many times are not in line with their offering and brand.
In the financial service industry in specific, managers are afraid of regulatory challenges and think that their products are boring and that people are not interested on discussing about them.
This could not be more far from the truth. While it is important to define a social media framework and guidelines to be compliant with regulations, we must remember that money is still the interface between an individual and his resources and hence people love discussing what they can do to better manage their financials and maximize their possibilities.
Three keys to managing brands successfully online:
1. Make sure that you social media guidelines and content strategy are aligned with your brand to build brand equity
“It’s just a different canvas we’re communicating on,” Feczko told participants in a recent conference sponsored by Wharton’s Jay H. Baker Retailing Center and the SEI Center for Advanced Studies in Management titled, “The Future of Brand Building and Brand Experience: The Blurring Boundaries between Advertising and Retailing.”
The key, Feczko said, is for companies’ marketing campaigns to blend entertainment and information.
This perfectly applies to the financial service industry however instead of blending entertainment and information, financial brands must blend valuable ideas, news, education and information.
3. Invest on a content strategy and processes that generate ROI and not just on short term viral buzz
By doing this, you are not only educating and providing a superior service but you are also building trust, promoting switching costs and building brand equity.
It is still ALL about Value Creation: Value + Creation
In order to build strong brands online, it is important to establish content teams and value creating processes aligned with long-term sustainable return on investment goals.
The challenge is to successfully develop, align and coordinate the internal processes, while at the same time incorporating consumer insights in terms of wants and needs into the content and social media strategies. In order to differentiate the brand, innovation and value creation, needs to be founded not only on the tangible features and functions of the experience but just as much on the intangibles, such as the emotional rewards, the values and the personality of the brand delivered through the content and conversations.
Finally, in order to create a competitive advantage in the long term, it is important to establish processes, which can result in dynamic capabilities. Dynamic Capabilities can be boiled down into two Basic ingredients: Social Capital and Absorptive Capacity…
To keep it down to earth I will summarize the importance of dynamic capabilities into this phrase: establish communication processes and channels aligned with your brand promise, which are rich in human: Ability + Motivation and Opportunities + Integration. It is all about the people and the value that they create.
Good luck and enjoy the process!
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