A BRAND PLAN

Here at BIG/PCBB we often discuss how to enhance our "brand." A brand is a bank's identity and encompasses any "touch" with the public. This includes the aspects of name, logo, color, advertising, branch look/feel, e-mail format, events, customer service, customer experience, associations, history and many other elements. A good brand will have an emotional appeal that can translate into a pricing premium and ultimately greater net income. Bank of America, Wells Fargo and Citigroup all have brand management worthy of emulation. These companies are examples of how first-class brands are not created haphazardly and are the result of a well thought out plan. If done correctly, a brand can be the largest single asset an independent financial institution has. Look at bank book multiples for recent purchases and you get a sense for the relative value of a brand asset. Premiums of 2.5 to 3.5 times book value come as a result of a bank being able to command extraordinary value above the sum of its assets. This intangible is worth more than any fixed asset or loan on a bank's balance sheet, yet is rarely afforded the same respect. Like a well-maintained building, a brand is an asset that needs maintenance and protection. It is interesting to note that a bank's brand also has the longest terminal value of any other asset on a balance sheet. While loans mature and buildings depreciate, a bank's brand appreciates with age and infinitely extends to the future (as a going concern value). Because of this value, top performing banks have a "Brand Plan" that includes the statement of vision, marketing elements (logo, stationery, etc.), marketing plan, legal protections and promotion of the brand. Because branding applies to the entire organization, everybody is responsible for reputational management. In order to get the most out of a brand, employees need to understand it, live it and know how to "sell" the image of the institution. It is important to define expectations of how to promote the brand in public, when meeting customers and how to use the institution's resources to achieve maximum effectiveness. Branding only succeeds if the message is consistent, coherent, focused and delivered in the right manner. To accomplish this, brand management starts with a plan and is fueled by tireless promotion. While some would say brand management is too "touchy feely" to spend time on, consider a recent valuation of the Coca-Cola brand. In January, it was estimated that the brand accounts for almost 90% of the firm's market value. If banks can achieve even a fraction of that, better pricing and margins will follow.