What is a brand?
In simple terms, a brand is the physical image of a company or a product, its logo, its colour scheme and its look. It is what helps us distinguish Tesco from Sainsbury’s or Nat West from Abbey National. But a brand is much more complex than that; it is designed to create an emotional response from everyone that ‘buys’ into it. It is an intangible entity that could be the difference between a borrower choosing one broker or a competitor. A brand should embody a set of emotional values that createsÃŸ a sense of desire, loyalty and pride in consumers. This is the real importance of a brand and these days businesses invest millions in getting it right.
Why is branding important to the mortgage industry?
The landscape is likely to change dramatically post-mortgage regulation and only the fittest organisations will survive. Responsive companies that have a good business proposition will be best placed to capitalise on the industry’s inevitable natural culling process. A successful brand will enable those companies to carve out a strong presence in the marketplace and help them identify what they do, what their strengths are and why they are better than the competition. In the post-regulation mortgage industry, memorable branding will help businesses stand out from the crowd, communicate their qualities and, importantly, grow and retain their client bases.
At the moment, many brokers have based successful businesses purely on word of mouth and the cost of setting up a business has been fairly low. Come October 2004, this will all change with brokers paying out for professional indemnity insurance, regulatory costs, capital adequacy, compliance systems, training and so on. Brokers will have to become bigger to support the increased costs and will have to generate more business to pay the bills. They will no longer be able to rely on word of mouth to grow their business and will have to create brands that give their clients confidence and a reason why they should use an intermediary, rather than go direct to one of the big financial players with a major marketing presence.
How do you develop a brand?
Creating a brand can take a lot of time and money and is not an exact science, as witnessed by the failure of the Royal Mail’s re-branding to Consignia, which cost a fortune, took a long time to develop and implement, was widely derided for being bland and then abandoned little more than a year later. However, there are specialist branding consultancies that will develop and road test various alternatives before recommending the one that receives the most favourable consumer feedback.
The network Misys has just launched a new IFA-facing brand called Sesame, a carefully chosen name. Martin Davis, commercial director at Misys, explains: ‘The name Sesame was arrived at through rigorous testing, in-depth feedback and member research. As a brand to our staff, it stands for care, for really listening, and for being professional. For the market, we want it to be about enabling IFAs and demonstrating leadership in the markets we serve.’
Does it have to cost that much?
Creating a brand from scratch is a costly business, but most of the big successful companies have been around for ages, trading under names that were put in place long before branding became such an important consideration. Over the years, financial services companies such as Abbey National, Halifax and NatWest have tweaked their images to create brands that communicate their qualities and appeal to a specific type of borrower.
So, for established companies in the mortgage industry, it is not necessary to re-invent the wheel and develop a whole new brand. A brand should act as a focus for the values their services or products aspire to. In financial services, a strong brand is one that promotes a sense of reassurance that the organisation is a safe and credible company to do business with. Importantly, the values of the company need to be in place and then a brand developed to reflect those brands. It would be foolhardy to create a brand that is completely different from the kind of organisation it represents and the experience of clients doing business with that company.
How does my target audience affect my brand?
The mortgage market is a complex place with lots of companies jockeying for position in different sectors. The kind of brand you present will normally be driven by the type of audience you are aiming for, whether it is consumer or business to business.
A brand such as Mortgages plc does not have the same impact as the big lenders, so it has to be more focussed to make its mark. Mortgages plc, for example, does not target the borrower directly, so its brand needs to resonate with the intermediary. The brand embraces the qualities Mortgages plc believe brokers want from a lender, good products backed up by great service.
Brokers on the other hand have to establish a brand that appeals to the borrower and creates an image of trust, choice, good advice and personal service. Distributors/packagers have an even tougher challenge as their role in the post-regulation industry will need to change to survive, so their brands must communicate value-added service, professionalism and reliability.
After October 2004, companies who have got their businesses sorted out and are able to use branding to demonstrate that will be the winners in a new look industry.