The Power of Brand

The Power of Brand Community Banking by Janet Bigham Bernstal A while ago, Labe Bank was a selfdescribed “diamond in the rough.” Founded in 1905 by Czech immigrants, Labe Bank was for a long time comfortable with being a one-branch neighborhood institution. Some of the customers are now third generation. These customers sometimes bring family and friends and share family photographs with bank employees when they visit “their bank.” Because of the bank’s history, the staff was sensitive to cultural and communication issues of immigrant communities. The diverse bank staff spoke dozens of languages. But in 1990, after about 85 years in business, the leaders at Labe Bank decided that the institution could not continue to survive and prosper unless managers initiated some organizational changes. At the same time, they formulated a strategic plan for growth and hired a brand consultant to help change the institution’s focus from selling products to selling services. As a result, Labe Bank started down a whole new marketing road. The president and CEO, David Arts and the vice president of marketing, Vicki Dreyer, spoke recently about the journey with ABA Bank Marketing contributing writer Janet Bigham Bernstel. Why did you put such emphasis on a new branding initiative? Why not just increase your existing marketing efforts? David Arts: The one thing we knew is that we needed to run the bank like a business. In doing so, we knew we had to deal with and capitalize on our strengths and understand our weaknesses. We also knew that we had to meet the customers’ needs and have them grow with us. So, with the customer being the focus in building our business, it launched the whole branding concept. What had the bank been running like, if not a business? David Arts: The ownership of the bank changed in 1990 and the new, and current chairman, Lowell Stahl, was not a banker. He came from real estate. So the whole personality of the bank shifted, and it started to run more like a corporate business. In 1995 there was another major change with new people and new initiatives. That’s (continued on page 17) illustration by Doug Panton, www.laughing-stock.com Labe Bank of Chicago was just an “ordinary” community bank with $100 million in assets. Then the bank decided to create a strong brand identity. Before long, its assets had quadrupled. Two managers explain how the seemingly simple change made a big difference. ABA BANK MARKETING JANUARY | FEBRUARY 2005 15 Marketing to us is defining who we are, what we can deliver to the community and to the customer, and how we can fulfill the needs. A Profile of Labe Bank, Chicago Type: Federally chartered commercial bank. Established: Founded in 1905. Assets: in excess of $400 million Branches: two, with a third location under way. As part of the process of creating a brand for Labe Bank, Chicago, the institution asked all employees to sign a “brand promise” (right). The document pledges that the employee will uphold the bank’s values. 16 JANUARY | FEBRUARY 2005 ABA BANK MARKETING (continued from page 15) when Vicki and I both came to the bank and we both have backgrounds in the business world, not banking. We started right away by recognizing that we weren’t going to fall into the trap and run the bank like other banks are run. That’s not an insult to the industry, but our way is just alien to the way current marketing is done in most banks. Marketing to them is “how big is the ad in the paper that tells our current rate?” They sell rates and they call that marketing. To us, that’s not marketing. Marketing to us is defining who we are, what we can deliver to the community and to the customer, and how we can fulfill the needs. We don’t advertise rates and yet have grown deposits over 116 percent since 2001. We took the bank that was under $100 million in assets in 1995 to over $400 million today. That came from building the customer base and providing the services and really letting people know what this bank was all about. How did you actually go about this branding process? Vicki Dreyer: The whole process can be broken down into four steps: discovering the brand, defining the brand promise, building a branding plan and finally, executing the brand promise. The first step was the discovery process, where we took an objective look at who we were and how we did things. We were very honest with ourselves in terms of our strengths and weaknesses. We asked ourselves the question: “Is there a better or different way to deliver?” That brand discovery process included interviews with people within the organization from executive management throughout. We worked with a third party, Brandtrust, to get an objective look at employee perception of the bank. We did interviews with customers and conducted competitor [mystery shop] visits. Then to see if our perception of who we were was a match with how others perceived us, we also did secret visits [mystery shopping] on our bank. What do you see as the major challenges and benefits of this type of research? David Arts: Business planning has always been a focal point of our approach to running the bank like a business. The one scary part to us was the idea of coming through all this with a brand promise that might set us up for failure. If we made a promise, we had to be able to deliver, and to track how well we were doing. In order to do a good business planning, we had to look through the eyes of employees because they often know what’s broken better than we. We also had to look through the eyes of customers. We couldn’t allow failure, so we had to know what our customers and employees thought of us and capitalize on that. Vicky Dreyer: I want to also point out that this type of research is so different from conventional market research. This research gave us real emotional insight to the people’s preferences instead of, for example, reading a demographic report and making assumptions. Were there any revelations or surprises in the research results? David Arts: There were really no surprises, but there were areas and issues that customers identified that confirmed much of what we learned from our employees and what we knew internally. What that did is allow us to address those issues and fix them before we jumped into a brand promise. It gave us a road map as to what we needed to do to continue this whole brand exploration. Let’s talk about the second step, defining the brand promise. Vicki Dreyer: The next stage was actually determining what it was we were going to deliver. One of the things we found in defining that brand promise was that we were doing a great job in customer service, but we wanted to make it even better. Instead of meeting expectations, we set a goal of exceeding customer expectations. Want to Learn More? David Arts, president and CEO of Labe Bank, Chicago, will speak during a concurrent learning sessions entitled “Creating a Brand Strategy for Growth” at the ABA National Conference for Community Bankers, Feb. 20-23 at JW Marriott Desert Ridge Resort & Spa, Scottsdale, Ariz. For registration information, telephone (800) BANKERS or access aba.com under the topic of “conferences.” Product brochures before branding (left) and after (right). Various brochures are collected in one unified brochure in 2002, incorporating the bank’s new colors and logo. Note the use of a tag line that reflects the brand image: “We build relationships with people, not bank accounts.” ABA BANK MARKETING JANUARY | FEBRUARY 2005 17 ▲ What we also found out was that people had a perception that banking in general was very formal. So we looked at how we could make it more friendly and fun. The brand promise that resulted is our tag line, “The Way a Bank Should Be.” But it’s more than a tag line; it’s the way we do business. Anything to support that brand promise of “the way a bank should be.” So after defining the brand promise, you proceeded to build the plan to deliver? Vicky Dreyer: Yes, we needed the buy in and support of the entire organization to be able to deliver this promise. So we engaged everyone in the process. We said if we are to be the way a bank should be, what do you feel we need to do within your department to deliver on this promise? What ideas do you have to exceed customer expectation at every touch point? From that, we built a plan with objectives and action steps. We assigned people ownership in that, and they took responsibility. They contributed to the plan and took an active role in implementing each step. During this process, we asked all employees to sign a brand promise so they will uphold the values and their commitment to deliver it. We felt if they didn’t believe in it, it wouldn’t happen. David Arts: Remember that they were intimately involved in putting together the action plans, and they were the ones who had to actually do it. So this was an attestation to what they told us we needed to do. They said, “I believe what I told you, I know it’s going to work.” After that it was, and is, a matter of execution? Vicky Dreyer: Yes, it was a matter of execution and also ongoing tracking and measurement. We had to make sure we were delivering the brand promise on a consistent basis. One way we support the promise as well as track and measure is through our “Wow” customer service program. It’s a program whereby employees can be recognized by customers and by each other internally for exceeding expectations. Both have the opportunity to nominate each other. Not everyone who’s nominated receives a “Wow” award. There are criteria to be met. But when they’re honored, the way that reward’s delivered is part of our brand and personality, too. For example, they don’t know when it’s going to happen. David and our vice president of human resources and the department head surprise the staff members by converging on them while Tina Turner’s song “Simply the Best” plays throughout the bank. And a “Wow” award is delivered. David Arts: Sometimes it happens when customers are in the lobby. They get as excited as we do. They know that someone is being recognized for extraordinary service. It has a very positive effect when done in a public forum. Vicky Dreyer: When someone receives a “Wow” award, their picture is taken and an e-mail with the photo is immediately sent throughout the company along with an explanation of who received the reward and why. Sample promotional ads before branding (left) and after (right) show the emotional power of branding. Ads on the left emphasize rates, but fail to differentiate the bank. Ads from 2002-2004 focus on the customer experience. The customer testimonial, for example, thanks the bank for making possible “38 years of great memories.” 18 JANUARY | FEBRUARY 2005 ABA BANK MARKETING After receiving 10 of these “Wow” awards, they get featured in a “Wow Wall of Fame.” The beauty of this whole concept is that it constantly merchandises what this company is about and what we believe in. David Arts: They’ve become coveted awards. Employees proudly display them on their desks or in the teller windows. We’ve had situations where tellers have done anything from changing tires to helping customers hook up their computers to the Internet on their day off. These are all things that no one has told them to do, but it makes an impact on customers, the community and the staff working with those people. It becomes contagious. What type of monitoring do you do? David Arts: We have an annual business plan that’s monitored on a monthly basis. We spend a tremendous amount of time analyzing our progress and what we can do better.. When we say something’s not working right or we have a weakness, we also have a solution. We have it clearly laid out in our business plan to approach and eliminate that weakness or operating problem. We know we can’t rest on our laurels. This is an ongoing process and it will never go away. Any advice to other banks your size trying to grow deposits? David Arts: Understand your strengths and weaknesses. Find out what your customers think of you. If you don’t like what you see, you have to be ready to change and be comfortable with it. Presentation folder before branding (left) and after (right). The bank’s new symbol and colors are incorporated into the 2003 folder. The tag line, “The Labe Way,” reinforces the brand image, suggesting that interacting with the bank provides customers with an unusual and superior experience. ▲ Labe Bank’s old website (left) and new one (right). The new site features the bank’s redesigned logo and colors. Note the prominent customer testimonial that ties in with the new brand image of performance excellence. The brand discovery process included interviews with people within the organization. . . . ABA BANK MARKETING DECEMBER 2004 19 Outdoor advertising before branding (left) and after (right). The 2002 ad echoes the brand theme of superior customer experience. The testimonial reads: “I don’t know why anyone would go anywhere else.” Then make sure you can deliver what you’re communicating. . . . We held off for a long time before we came out with our brand promise. If we say this is the way a bank should be, but felt deficient, we’d be living a lie. Vicki, tell us about your marketing department. Vicky Dreyer: Our department is very untypical. We basically operate as an in-house ad agency, that’s how we view ourselves. We have a marketing manager, Kelly Ford, who runs the department on a day-to-day basis. We have a full time creative design specialist and a part-time marketing coordinator that is an assistant to Kelly. We are actively involved in the business planning process. We meet with each department head, as we’ve been doing for the past couple of months for the 2005 plan. We ask what their goals and objectives are, and talk about how marketing will support them. Our goal is to make sure our department can help them meet their goals. It’s been very rewarding. What’s critical is that you need the understanding and support of executive management to pull this off. I’ve been fortunate that they understand marketing, believe in and recognize its value. They also believe in continually investing in it, and that’s key. ■ Instead of meeting expectations, we set a goal of exceeding customer expectations. We know we can’t rest on our laurels. This is an ongoing process and it will never go away. Janet Bigham Bernstel specializes in writing about marketing and financial services industry issues. She works in Jupiter, Fla. How useful was this article? Please use the postage-free Reader Opinion Card provided in this issue or leave a message at (202) 663-5075. You can also send comments by e-mail to walbro@aba.com. 20 JANUARY | FEBRUARY 2005 ABA BANK MARKETING