Bank Failures Have a Silver Lining

The big banks left standing, who have eaten their own, just get bigger and, it appears, less trustworthy in the eyes of most banking customers. This may be more than perception, since the bank that gobbles up one of it's own failing peer banks would appear to take on the liabilities and inherent weaknesses of that failed institution. It is important to note that the bank failures we have seen are all from the ranks of the "big boys." Locally owned banks, with longevity in the business, seem to be shielded because they have never bought into the unsound business practices that Wall Street has succumbed to. Whether the biggest banks are more vulnerable, or this is just an unfounded perception, the opportunity for local banks to capture the minds of potential customers away from the large institutions may never have been greater than now.

According to a recent Gallup poll, cited in the October 13th issue of Advertising Age, "only 21% of consumers... are confident in U.S. banks." Down "from 40% in mid-July, this represents the lowest level of consumer confidence in banks in three decades," wrote Beth Snyder Bulik, in the Advertising Age article. But reports of local banks beginning to grab up customers who are bailing out of the big national institutional banks appears to be on the rise. While consumer confidence has fallen sharply in the big U.S. banks, in stark contrast, according to the same Gallup poll, 61% say they have confidence in local banks. This represents an opportunity for local banks to gain depositors and new loan customers. Many banks are becoming very proactive in reaching out to the depositors and potential loan customers that are exiting the national banks. Many banks are mounting advertising campaigns designed to promote the image of safety in the more conservative local banks, branding themselves as people you know and can trust.

Branding is the key to attracting the disaffected big bank customers to your local banking institution. The big boys effectively created their branding efforts and drew depositors in droves. Now that they are leaving the same branding efforts by local institutions will achieve the same results.

Creating branding and image is essential to attracting potential customers. When a "big bank" customer makes his choice to pull out of the "scary" big bank entity, they have to look for a place they feel comfortable placing their hard earned money with; a place that take the time to get to know them and their unique needs and be able to protect their assets and provide the credit needed for business and personal needs. Who will they call? A better question is, "How will they know who to call?"

Most people, maybe because we as humans have become a bit lazy, won't research beyond checking in with the names that they already know. You may have the most sound financial institution in your local area, and your customer service may be second to none, but if the potential customer is not familiar with your name and who you are they probably won't pick up the phone and call you, let alone stop in to set up a new account. The banks that put branding and image building at the top of their marketing plan will have the best opportunity to gain the new customers. The banks that relegate branding and image building to an "also ran" status will have little to no opportunity - the potential customer doesn't know about them to even consider them. The vast majority of consumers call the first name or two that pops into their head. Usually the first person they call gets the business.

The best branding tool on the planet is a song. Songs convey emotion and promote memorability. In advertising this is known as branding through signature musical imaging. Connecting a clients name with lyrics that are singable, that reach out and touch the part of the heart and mind that motivates consumers, is extremely powerful and effective. The end result is the potential client remembers your name and has positive emotions connected to that memory. This greatly increases your chances that the potential customer will give you a shot at his or her business. And after all, isn't that as good as it gets? You know that all you need is the opportunity to talk to a potential customer and the service, integrity, and financial stability of your bank or credit union will convince them to place their trust in you.

This economic downturn presents opportunity for local banks as well as most other local businesses. A trend to more localized and regionalized business seems to the order of the day. Those who effectively brand their business will get the lion's share of the market. It is time to seize the day and position your bank, retail, or service company to gain your share of this once in a lifetime opportunity. The storm is raging now, but when the dust settles, of those left standing, the ones who have effectively branded themselves will reap the biggest rewards.