While we were happy for the horse Shackleford for winning the Preakness, we were really rooting for Animal Kingdom to set up the excitement of a Triple Crown run. As an astute banker points out to us, regardless of who won, the race itself was a winner. Long called the inbred cousin of the Kentucky Derby, the famous race at Pimlico is a generally a middle class affair. While the Kentucky Derby is targeted at society's upper echelon with its Millionaires Row, fancy hats and Mint Juleps, the Preakness is better known for, um, let's say, the reckless, beer swilling over-indulgence of the infield crowd. The problem is that in an effort to move upscale several years ago, Pimlico put a cap on the supply of certain beverages and moved its marketing upscale. Ticket sales dropped dramatically. This year however, race organizers went the other way and embraced their core audience. They introduced Kegasus, the party animal complete with beer gut, nipple ring and long hair. In addition, race organizers rolled out the bottomless mug club, a swimsuit competition and live concerts. Ticket sales were up 18%, as attendance hit a near-high.
Our lesson from the Preakness is to understand yourself, before you start to understand your customer base. Few banks excel at branding and marketing as most seek to convince customers that they are the right bank for them. While this approach can be successful, it is usually inefficient. Good bank marketing helps the customer define him or herself as well as defining the bank. Maybe the bank is all about supporting small business, the green movement, women, minorities, doctors or labor unions. Maybe the bank goes after the Kentucky Derby set or markets middle class like the Preakness. Whatever the case, we believe that it is very difficult for a bank to be all things to all customer types and it is hard to compete for the mass market against the likes of Bank of America and Wells Fargo.
The select few top performing banks in marketing understand their customer base so deeply that their approach is to use marketing to promote their passion and beliefs. In other words, the objective of bank marketing is not to do business with everyone that needs your product, but to do business with people who believe what you believe. A customer that wants to do business with you because of an attribute such as price, branch hours or a promotion is not likely to stay a customer for long. However, a customer that banks with you because they believe what you believe is most likely to stick with you through a variety of cycles.
Consider the difference between Apple and Dell. If Dell comes out with a new computer, people might buy it if it is faster and priced right. However, it doesn't matter what product Apple comes out with or how they price it, a large percentage of the population will buy it regardless just because they indentify so completely with the Apple brand.
While a bank may not be able to duplicate Apple's success, there are a handful of banks across the country that have moved in that direction and are better banks because of it. They have created a competitive advantage by strengthening both culture and brand. Adopting a Kegasus-like mascot, may not be the answer, but like the Maryland Jockey Club, some banks may want to take a chance on redefining themselves in order to better attract not only customers, but employees and shareholders that share a common passion. If successful, banks will find that customer relationships pull to the front on value and help them best their competition by several lengths.