There’s a tendency among community banks to believe their major competitors are mega bank systems like Chase, Wells Fargo and CitiBank. And they believe they have found effective ways to compete against them by being regional and personal.
So I did some research. I found that at least six of those in my local market claiming successful branding had interchangeable positioning statements. Yet each executive I spoke with claimed that they had established a brand that differentiated them from their competitors.The wording may be a little different, but all six of them stated their position like this:
“We’re small so we try really hard. We get to know our customers personally and offer them a personalized service the big banks don’t offer. Yet we offer all the services a big bank offers, and we provide it quicker and with more attention to individual needs. Here the customer comes first.”
Every one of the smaller guys positioned their banks against the large banks and ignored their smaller competitors. Each wished to woo customers from big banks, but paid no attention to their real competition – banks their size.
There are a lot of people who would rather have a relationship with a smaller, local bank. These folks don’t need to be convinced a smaller bank has advantages. They need to be provided a reason to use small bank W instead of small banks A, B and C.
Branding can be a big part of differentiating one small bank from another. But as long as bank execs believe their main branding efforts should position them against the giants instead of their primary competitors, their brands aren’t going to be very powerful or successful.
The moral of this story: differentiate your business from your nearest competitors – the ones your competing with head to head.