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As a partner at MBLM, Rina Plapler was instrumental in creating her firm’s research on brand intimacy — the emotional science that measures the bonds we form with the brands we use and love. She’s applied this research to the financial industry in an effort to rank the companies and characteristics that make for today’s strongest brands. MBLM recently published its Brand Intimacy Study 2020.
Rina joins us on for a Tearsheet Outlier Briefing to discuss what makes up brand intimacy and how emotional people feel about financial services. We look at her rankings and the attributes of today’s strongest financial brands. Lastly, she provides advice to companies to make themselves into more intimate brands.
- Brand intimacy: "You can think of it in terms of a human dynamic. You have to be a user of a brand. You can't be in a relationship with someone you don't know. So you can't be intimate with a brand you're not a user of. This isn't about awareness or consideration."
- Hostage customers: "Financial services have what we sometimes called hostages, in the sense that they've got a lot of captive customers. You don't want to leave for convenience or stickiness or history. But how do you make that relationship that's really positive and powerful, not just required?"
- The emotional component: "People might think the connection between financial services and emotion is a little odd but when you think about it, what's more important to people than their money, and maybe their health?"
- Financial services against the world: "Financial services is not the best performer but it's not the worst either. It's below media, automotive, retail, and consumer goods, but it's also above hospitality, appliances, luxury and travel."
- Variance in top financial brands: "PayPal's got a quotient score of 40. And now, Amex is 32.2. But if you start to look at our 10th rank brand US Bank, there's quite a difference ranking -- 17.8 quotient score. So within the categories, there is quite a bit of variance."
- Fullfillment and enhancement: "And so for financial services, things like fulfillment and enhancement are very important. Fulfillment really on the service side, efficacy, do what they say. Enhancement is more along the lines of making you smarter, better, more connected, more capable."
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The Brand Intimacy Study
At MBLM, it's really been our sort of northstar for 10 years and around that time, we wanted to validate our theory that emotion was really the foundation to building strong relationships.
And so for nearly that long, we've been doing research with customers and executives across 15 industries to understand the best-in-class brands in terms of those that are most successful at building emotional connection.
It's become an annual study that we do with about 6000 consumers around three different countries and 15 industries. So obviously, we're biased towards the financial services industry.
Components of brand intimacy
Brand intimacy is actually pretty simple. And basically, it's four things. You can almost think of this in terms of a human dynamic. You have to be a user of a brand. You can't be in a relationship with someone you don't know. So you can't be intimate with a brand you're not a user of. This isn't about awareness or consideration. These are people who are actively using the brand and they need to have a positive emotional connection with the brand.
And so once we find users that have a positive emotional connection with the brand, we will rank them across two things called archetypes and stages. Archetypes are really the characteristics they associate with the brand and stages are the level of intensity of their relationship. We combine those to give a quotient score, which is a score out of 100.
Nobody gets 100 -- the most intimate brands in the US are in the 70s, generally. What that score helps you do is a sort of shorthand so you can see how you might be performing relative to competitors or other best in class brands. What brand intimacy is, in short, is really the emotional science behind the brands we use and love. And it's really trying to understand and decode, who's doing well and how we can apply that to other brands.
Financial service brands
People might think the connection between financial services and emotion is a little odd but when you think about it, what's more important to people than their money, and maybe their health? Those are really two categories that are fraught with emotion, either nervous that you're going to lose it or nervous that you don't have it. So there's a lot of apprehension, which is an emotion in the category to begin with. This is something people care dearly about.
And even if you know a lot about your money, you sometimes feel you never know enough. So there's also a lot of uncertainty. And so this is a category that has the potential to create really powerful relationships.
Compared to other industries
The media and entertainment industry has been number one in our study the past couple of years, indulging our binge eating habits. Automotive generally does really well, because I think it's easy to understand. Our car brands say a lot about us.
But I think people need to think about financial services in that way as well. People are very interested in this subject. And the fact that they have a relationship with a bank, or issuer or association is already something that can be leveraged. This is usually not about getting new customers. That's how you deepen the relationships with the customers that you have. And the good news is there's lots of room for improvement.
Financial services is not the best performer but it's not the worst either. It's below media, automotive, retail, and consumer goods, but it's also above hospitality, appliances, luxury and travel. And this was done pre COVID just to be clear, and so categories like luxury and travel, you would imagine might do a better job at creating connections with customers. So that's interesting.
Brands with hostage customers
Financial services have what we sometimes called hostages, in the sense that they've got a lot of captive customers. You don't want to leave for convenience or stickiness or history. But how do you make that relationship that's really positive and powerful, not just required?
The best financial brands vs. the worst
There's a lot of opportunity for financial services brands to do a much better job in creating powerful relationships with customers. What's interesting is that PayPal and Amex have kind of flipped the past couple of years, between numbers, remember that? You can just see that PayPal's got a quotient score of 40. And now, Amex is 32.2.
But if you start to look at our 10th rank brand US Bank, there's quite a difference ranking -- 17.8 quotient score. So within the categories, there is quite a bit of variance. I think the average for the industry is something like 23.4 for quotients across the financial services industry.
Generally, the higher ranking brands have a larger percentage of their customers having what we call an intimate relationship -- meaning they feel they're in some sort of emotional relationship with the brand. Since we talk to users of the brand, it doesn't mean just because you're a user, you consider yourselves having an emotional relationship. So what percentage of your customer self-admittedly say that?
Fulfillment and enhancement
And the other part of that equation is how do customers connect with your brands in the beginning? Our six archetypes are sort of markers that define intimate brands.
And so for financial services, things like fulfillment and enhancement are very important. Fulfillment really on the service side, efficacy, do what they say. Enhancement is more along the lines of making you smarter, better, more connected, more capable. Both of those are very big in financial services. But what's really interesting is for years, fulfilment had been the driver or the most dominant archetype in the category, very service focus. But for the past two years, enhancement is now number one. And in fact, it even improved significantly from last year to this year. That tells us the role of technology is becoming more important in financial services. And that sort of ubiquity and ability to make people more connected, more capable, really relates to the sort of digital, fintech side of the house and I think that's also a huge opportunity for financial brands, and also a threat for those that are sort of a little behind in providing that kind of experience.
The evolving customer
I do think that the idea of having a relationship with a customer does suggest that there's evolution and advancement in what a bank does. We know banks have a history of sort of nickel and diming, credit cards make money on the fact that you pay interest, the higher the more profitable. Banks and financial services have had a checkered history in the recent past. So it's not surprising that there's some resistance to thinking of them as a an emotional or intimate relationship.
Having said that, when you look at the PayPal or Amex brands, they do reasonably well. Amex does even better in our Mexico study. They're always one of the top 10 ranked brands overall. It is the brands that are adaptable, that are advancing, that are offering customers what they need today and what they want tomorrow. And you just gave an example of that, but you know, really extending what the relationship can be about.
So I want to ask a little bit more.
Amazon's impact on financial brands
If you think about our archetypes, one of them is indulgence. That's really centered around gratification and moments of pampering. That doesn't really seem to apply to financial services. By and large, you might want to use some of your money for an indulgent experience, but I don't think you want that financial brand to necessarily give you that experience.
We mentioned enhancement, which is also a huge driver of Amazon, and fulfillment, which is about service. I think that strength of Amazon is something that financial services brands can lean on, which is how do you make the customer experience seamless, right? How do you anticipate what people want? How do you make it easy to get to what you want?
Amazon makes it too easy, right? That's why we all Prime everything and order a ton more things than we need to. What is the financial services version of that? How do you become more customer-centric, more user friendly, more all-encompassing, more about making somebody smarter, better, more connected, and more convenient. And that's not I've ordered checks, and they're going to take three weeks to get there. That's not here's your $14 fee for a real time transfer. That's not hidden charges on your credit card.
Lower ranking financial services
There are ways that financial services can change their perception, but it does require a change in building relationships, as opposed to seeing relationships as transactional. People feel anonymous. Banks have automated phones that are frustrating. They nickel and dime. Those are all things that hinder having a true emotional relationship, right?
The right way to start a bank
I would target young because, believe it or not, millennials rank financial
services higher in our study than any other age group. Hmm. That was kind of surprising to me. I think that speaks to the PayPal side of the house and the fact that millennials basically do their banking on their phone. And so I would probably orient my brand around an experience that was digital and seamless. That certainly was mobile friendly. That communicated an interest in the customer, whether that was through a survey that we asked people to fill out, or assigning them a persona that our departments would then figure out that this is someone who's doing more banking, looking at mortgages.
The opportunity would be to build the relationship with the person so that I can offer them what they need after two years. What advice can I give them?
You also have to speak frankly and freely. We wrote an article on how differently banks are communicating around the current crisis. Some banks are like, this is a challenging time. Others don't have that tone -- if you're having challenges, contact us, expect longer wait times. So even what you say and how you say it can have some impact. I'm not saying everybody's reading every word of a communication, but really, banks should speak to people as people and not invisible or automated.
So I guess my new financial brand would be heavily digital, skew young, be lean and mean. It would communicate in plain speak, in a friendly, inviting tone, inviting a relationship, as opposed to just pushing.
Case study: Wells Fargo
I am a Wells Fargo customer. Here's a good brand, an old brand, that's been beset by by some mishandled of a lot of things. I think the key is to understand, you know, what do customers think about Wells Fargo now? Wells Fargo had a strange campaign when this all came out, which was like they were starting over. I thought that was odd for a bank that has that great heritage. You can't make that up. And then the answer is Wells Fargo 2.0. It was an interesting approach.
I think in terms of how you come back from that, it's really what do you want to say and how do you explain this in a way to customers so that they understand. Was there a customer communication? Yes, there was. Was it friendly or clear or simple? No, it wasn't. And I think the Wells Fargo brand, like any brand, if it's worth its weight, survives these kind of obstacles because they've built up some goodwill, and people generally understand a mishap unless it keeps happening again.
Wells should look at the perceptions that need to be changed. How do we go about building trust, like a human relationship? Is it advancing or declining? Relationships rarely stay static. So, I suspect Wells Fargo had some declining relationships. So now the question is, how do they move forward? Or is it too late? Have some people chosen to leave the brand?
Fintech brand building
You should look at leading tech brands for inspiration, not financial institutions. You should be looking at Apple, Amazon, and Netflix in B2C. If you're in a B2B, you need a very responsive digital site. If you're Venmo, PayPal or a small fintech brand, I'd say you're on the right track. Secondly, I would look for inspiration from leading digital brands that are outside the category because from a intimacy perspective, I don't think there's a ton to learn from the traditional banks.
PayPal is our number one financial brand. So they've already leapfrogged Citi, Chase, US Bank and Bank of America. Digital finance brands already have an advantage because they're based on enhancement. They're still competing on enhancement and fulfillment. Those are still category drivers, and they still need a brand. Don't get me wrong, just because you know, you've got a platform that resonates with customers, you still need to tell a story that's effective and compelling. That's where I think a lot of the older banks have to play catch up. They're still not top tier in terms of the experience they offer.
Financial services over the years
The financial sector's ranking in the study has been steady for a couple of years in the bottom third. I'd say it's been a sort of slow decline. And when we first started the study, I think it was ranked as highest as sixth in the US.
I am very curious to see if the banks fare any differently post COVID because they've been in a unique position over the past couple of months of being that intermediary for many people for financial and government aid and PPP. That seems like a built-in opportunity to see how those brands respond and it will be interesting to see if the result is positive, making people feel more connected, or alienating because it was anonymous and unwelcoming and unsympathetic. That's something to look for.
Big tech coming in to financial services
I think it's a big threat, and I think traditional financial institutions are scared because big tech are brands that already have tremendous reach and loyal followings. And depending on the product, right, you might be less comfortable getting a mortgage from Apple than a credit card, but I think that's definitely going to be a crossover for a lot of financial services brands to think about because it's very hard to compete brand-wise with those players.
And to compete, you have to think what you, as a bank, have that they don't? That requires a telling of a certain story conveying authority -- maybe playing up 120 years of expertise, those kind of things that the newer entrants can't say. So I think it's it's definitely going to be a new story. It's not going to be Visa versus Mastercard as much as it might be Apple versus Amazon cards.