Congressman Dennis Kucinich has gone on record saying "This is a disgrace. The bailout continues to be perverted by those who led us into the problem to begin with," that's a pretty sure sign that banks have a serious image problem. The President warned a group of bank executives that people wanted to go after them with pitchforks. New York Attorney General Andrew Cuomo has accused Bank of America of obstructing justice.

Damages to their reputations and brand values are far from the most serious problems banks are facing in the economic meltdown. But they are significant. Especially since recovery will depend to a great degree on restoring the public's perception of banks' probity and stability.  

Only a few banks are responsible for the financial catastrophe. And only a few – often the same few – acted with the arrogant insensitivity that exacerbated the PR calamity. But the reputations and brand values of almost all banks have been hurt. Even the majority of banks which didn't make big bets on collateralized debt obligations and don't own Gulfstreams.

A study from research company Morpace found that consumers who felt "very confident" in the banking industry fell to a record low 38% at the end of 2008. The report states that drops in the confidence rating tend to track news headlines about bank problems. But although the headlines are about big banks, the decline in confidence is "not a big-bank versus a small-bank thing, but an indicator of how far the entire financial services industry has fallen in consumers' eyes."

It is a difficult time for bank reputations and brand values, but some banks are doing better at protecting those assets than others. Ten key factors that influence the degree to which banks' reputations and brand values are being eroded, preserved or even enhanced include:

1. The right message. 53% of respondents to a Boston Consulting Group survey want factual reassurance of their bank's stability. But in recent issues of Fortune, Smart Money and Time, only 15.4% of financial firms' ads even addressed the financial downturn. That leaves an open field for banks willing to step up and address the situation head-on.
   
   

2. Practical advice. A majority of respondents to the Boston Consulting Group survey wanted "information about what to consider in these economic times and current information about the crisis." But with only 15.4% of financial services ads addressing the crisis at all, that information was not forthcoming. This is another opportunity for banks to abandon platitudes and earn respect – and trust – by tackling the situation head-on.
   
   

3. Contact. Boston Consulting found that 83% of customers who were contacted by their banks about the current crisis were satisfied with their bank. Only 53% of those who were not contacted were satisfied. But only 21% had been contacted via email, phone or snail mail. That leaves 79% who haven't been contacted. And any bank which hasn't initiated contact with its present customers should do it immediately. And then consider contacting other bank's customers who may be feeling abandoned.
   
   

4. Advertising. According to a Center for Media Research study, 55% of consumers who reported seeing more advertising for their financial institution have "complete confidence" in the institution's financial health. Only 18% of those who reported seeing less advertising expressed "complete confidence." So maintaining ad budgets even in tough times can pay off.
   
   

5. PR. The Center for Media Research study found that an impressive 44% of respondents had increased confidence in the safety and soundness of a financial institution as a result of reading positive stories about that institution in the press.
   
   

6. TV. Financial services research firm Aite Group found that banks which allocate a larger share of their marketing communications budgets to television achieved the best return on their marketing communications investment – in terms of business generated per dollar spent – than average banks. In fact, all of the banks in the top 25% of marketing communications efficiency were TV-heavy advertisers. That top quartile allocated 50% of their marketing communications budgets to TV versus 36% for all banks surveyed.
   
   

7. Smart, not big. The Aite Group study did not find a correlation between the size of banks' marketing budgets and effectiveness. Instead the persuasive quality of the ads and commercials and the selectivity of media were determining factors. The banks that got the best returns were the ones with the smartest advertising, not necessarily the most advertising.
   
   

8. Sell to current customers. A Mintel Comperemedia study found that banks' direct mail efforts are switching toward CRM with current customers rather than prospecting for new customers. The trend still has a long way to go, since there were more than ten times as many mailers to prospects than to current customers last year, but the momentum is definitely changing.
   
   

9. Online. 51% of Gen X and Gen Y consumers handle their investments and finances online. Reach them there. A comprehensive paid search campaign is essential, and even display ads may be effective. 21% of consumers in the Boston Consulting study report feeling greater confidence when they see internet offers or advertising for a bank.
   
   

10. Make your website a more effective sales vehicle. Cram it full of how-to information for dealing with the meltdown and promote and cross-promote products that relate to those how-to tips.

There are some serious challenges to bank marketing today. But the opportunities are also substantial. Because most banks have pulled back to near invisibility. Banks that market smart will do better during this downturn and come out of it much stronger than their competition when things turn around. (See our earlier blog, Good Marketing for Bad Times). To find out how BrainPosse can help click here or call us at 865-330-0033.

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