THE MOMENT OF TRUTH

for financial services brands

Kai Howaldt, Maurizio Panetti
Rome, October 22nd, 2007

MUC-90007-043-16-01.ppt

Contents

Page

A. Introduction to our understanding of brand management and

marketing based on the RB Profiler approach
3
B. Challenges in financial services branding and marketing

15

C. The Moment of Truth for financial services brands

Summary
27

This document was created for the exclusive use of our clients. It is not complete unless supported by the underlying detailed analyses and oral presentation. It must not
be passed on to third parties except with the explicit prior consent of Roland Berger Strategy Consultants.

MUC-90007-043-16-01.ppt

A. Introduction to our understanding of brand

management and marketing
based on the RB Profiler approach

MUC-90007-043-16-01.ppt

Why branding and customer oriented marketing in

financial services industry matters

PAST

FUTURE

Financial services brands tend to be

positioned as brands for everybody

Focus on specific customer groups and

correspondingly a clear brand positioning

National brands with national

customers

Global brands operating on international

markets with balanced brand portfolios

Customer segmentation and marketing

mix based on demographics (income,
age, marital status, etc.)

Customer segmentation and marketing mix

based on understanding of customer
needs, supported by socio-demographics

As a brand for everybody, the need for

brand engagement is very limited

As a clearly positioned brand, consequent

brand engagement is a key success factor

A major paradigm shift in the financial services industry is necessary

Source: Roland Berger

MUC-90007-043-16-01.ppt

BRAND MANAGEMENT

Our brand philosophy is based on the congruity of

customer and brand values
The Moment of Truth
= Fit between perception and projection

FIT

BUY

CUSTOMER

BRAND

Values, needs
Preferences
Desires
Aspirations

Brand Communication
Functional attributes
Brand name, symbols
Users (peer group)

The individual absorbs

a brand's promises and
projections, tests it
(unconsciously) against
his/her individual value
and need profile

By all marketing activities,

esp. communication and
design, or by its user peer
group a brand addresses a
certain set of values and
transports a brand promise

PERCEPTION

PROJECTION
NO FIT

Source: Roland Berger, Brand Congruity Theory

NOT BUY
MUC-90007-043-16-01.ppt

BRAND MANAGEMENT

Two elements of customer understanding:

a quantitative database plus a holistic value system
1 QUANTITATIVE DATA BASE
Sociodemographic
data

Socioeconomic
data

Product-/
brand awareness & usage

Consumption
behavior

Interests &
Attitudes

Values, needs
& desires

Enormous pool of quantitative data available

for economic assessment, product- and
service-design, marketing campaigns etc.
Existing databases from > 200 projects
Individual market researches
In Germany: "Typologie der Wnsche"
Source: Roland Berger

2 VALUE SYSTEM

20 general B2C consumer values in six

specific clusters describe the needs of
people or the values addressed by brands
The RB Profiler value system is the result of
extensive research, many years of branding
expertise and continuous refinement
MUC-90007-043-16-01.ppt

BRAND MANAGEMENT

20 general customer values measure the needs of

customers and the values addressed by brands
Traditional Hedonism
Tranquil

Clanning

Prestige

Altruism
Purism

Prestige

Fair

Nature

Tranquil

Clanning

Security

Moneyism
Smart
Shopping

Thrill&
Entertainm.

Vitality
Classic
Carefree

Nature
Purism

Smart
Shopping

Total Cost

Classic

Progressive Hedonism

E
Fair

Vitality

Total Cost

Carefree

Thrill &
Entertainm.

Cool &
Trendy

Cool&
Trendy

Service
Innovation/
Protech
Quality
Personal
Efficiency
Proven

Progressive Performance
Personal
Customized Efficiency

Innnovation/
Protech

Customized

Traditional Performance
Security

Source: Roland Berger

Quality

Service

Proven

MUC-90007-043-16-01.ppt

BRAND MANAGEMENT

All customers have individual needs, values and

desires than can be measured and visualized
Example: Individual customer profile "Peter"
E

"PETER"
ICP Individual
customer profile
(ID 0335)
No. of level lines
indicates statistical
significance in relation
to the peer group

Values that Peter

agrees with i.e. his
preferences, desires

INTERPRETATION

Prestige

Fair

Vitality

Nature
Purism

Classic

Tranquil

Thrill&
Entertainment
Carefree

Clanning

Service
Smart
Shopping

Cool&Trendy

Protech

Quality
Personal
Efficiency
Proven

Values that Peter does Total Cost

not agree with i.e.
his dislikes

Source: Roland Berger

Customized

Peter is a very modern,

progressive person
He finds new, innovative
technology very thrilling and
demands customized,
service-oriented and topquality products
Money is not an issue for
Peter he is ready to spend
Classical or ethical values do
not matter for Peter he is
open to new things and does
not worry about society or the
environment
MUC-90007-043-16-01.ppt

BRAND MANAGEMENT

Identifying consumers with homogenous needs and

behavior is the starting point for a brand strategy
Example for homogenous consumer Archetypes
INDIVIDUALS

VALUES-BASED CONSUMER ARCHETYPES

Fun-oriented, costsensitive consumers

Performers
Performers

Humanists
Humanists

18,6%

Maximalists
Maximalists

16,5%

Hedonists
Hedonists

13,9%

Minimalists
Minimalists

Dreamers
Dreamers

12,5%

Traditionalists
Traditionalists

Individualists
Individualists

9,3%

Source: Roland Berger

8,8%

8,4%

7,9%

MUC-90007-043-16-01.ppt

BRAND MANAGEMENT

The values conveyed by a brand can also be

measured in the same way as consumer values
Examples Actual Brand Perceptions
Lidl

Douglas

BMW

Strong minimalistic profile

The main assets of the brand
are low prices and good
value-for-money
The brand does not offer any
emotional stimuli and does
not convey a high level of
comfort and efficiency

Strong emotional profile

The brand addresses both
traditional hedonistic values
like Prestige or Classic and
progressive values
Altruistic values like Fair and
Nature are also attracted
Cost values are not attracted

Strong maximalistic profile

Focus on traditional and
progressive performance
values as well as emotional
hedonism
Cost-sensitive values are not
addressed at all

Source: Roland Berger, BCN Typology of Desires (Germany 2007)

MUC-90007-043-16-01.ppt

10

BRAND MANAGEMENT

There is a strong correlation between brand profiles, customer values and consumption behavior
Understanding consumption behavior
CONSUMER "PETER"

BRAND PROFILES

BUY

Peter likes innovative

technology, customized
products and good service.
He is neither a responsible
person nor price-sensitive
Peter drives a BMW it is
expensive, but stands for
innovation and quality
Source: Roland Berger

FIT

NO
FIT

CONSUMER "BEN"

NO
FIT

FIT

BUY

Ben is a serious and

altruistic person. He is very
concerned with society and
the environment
Ben drives a Toyota it
addresses his needs for
ecological and social
responsibility
MUC-90007-043-16-01.ppt

11

BRAND MANAGEMENT

By visualizing the complete competitive

environment strategic options can be derived
Strategic Situation
Example: Automotive Germany
PERFORMANCE

Methodology

TRADITION
KNS

LEI
Mercedes-Benz
Audi
VW
KOM

Renault
Peugeot

PRA

Opel

Skoda

BMW
Toyota

Ford

ANS

The analysis of the competitive

environment allows to answer a series of
highly relevant strategic questions:
Which consumer Archetypes do my
brand(s) and the competitors' brands
address?
Is my brand portfolio positioned in a way
that allows maximal market
development with minimal risk of
cannibalization?
Do any market gaps exist that are
currently not occupied at all?
Which positioning options exist and
who would my main competitors be?

HED

INDIVIDUALISM
Archetype

Brand positioning

Source: Roland Berger; Roland Berger Market Research, Typologie der Wnsche Trend 07/08

MUC-90007-043-16-01.ppt

12

BRAND MANAGEMENT

A strong, focused brand positioning is a crucial

factor for the economic success of every brand
Strategic Situation
Example: Automotive Germany
PERFORMANCE
LEI

Methodology

TRADITION
KNS

A strong, differentiated brand and a

clear, consistent target group focus are
crucial pillars of economic success
The figure on the left side combines the
joint space strategic map with a graphic
illustration of the sales development
over the last 10 years

PRA

KOM

Sales increase growth >1% p.a.

Constant sales.
Sales decrease growth >1% p.a.

ANS

HED

INDIVIDUALISM
Archetype

Result: Brands with a clear target group

focus and a differentiated brand
positioning are clearly more successful

Brand positioning and sales development

Source: Roland Berger; Roland Berger Market Research, Typologie der Wnsche Trend 07/08

MUC-90007-043-16-01.ppt

13

BRAND MANAGEMENT

Superior marketing strategies are therefore based

on superior understanding of the customer
Applications
MARKETS & CUSTOMERS
Market and customer segmentation
Economic assessment of
customer segments
Fundamental insights into
customer values
Market analyses

BRANDING

Understand

Measurement of effectiveness and

efficiency for marketing & sales
Track
(Retail, POS)
Brand & Marketing KPIs
Campaign & response measurement
Marketing funnel (transparency & tracking)

MEASUREMENT & CONTROLLING

Source: Roland Berger

Actual brand perception

Brand positioning
Brand strategy
Target
Brand portfolio management
Brand architecture
Brand extension

Moment
of truth

Product portfolio breath

Campaign management
Gain &
Product- and service-design
Retain
Loyalty concepts
POS/ assortment strategies
Pricing and marketing communication strategy

MARKETING & SALES

MUC-90007-043-16-01.ppt

14

B. Challenges in financial services

branding and marketing

MUC-90007-043-16-01.ppt

15

Banks brand architecture can vary and is the result

of different drivers and decisions
PRELIMINARY
Drivers

Domestic retail branding complexity index

45,5

UBI Banca

35,5
33,5
32,5

Intesa San Paolo

Royal Bank of Scotland
Banco Popolare

31,5

MPS

28,5

Gruppo Capitalia

20

HBOS Group

15

UniCredit Group

10,5

BBVA
Grupo Santander

9,5

BNP Paribas

9,5
8,5

Lloyds TSB

8
7,5
7

Commerzbank
ING
UBS

5,5
5
4,5

Allianz Group
HSBC Group
Fortis

Deutsche Bank

ABN Amro

Key questions

Groupe Crdit Agricole

Barclays

Organic versus non

organic growth
Segmentation strategy
Organization structure
Institutionalconstrains

2
1,5

Source: analysis Roland Berger

Consistency with
business strategy/
objectives
Campaign/ advertising
spend effectiveness
Managed targeting
versus inertial
proliferation
MUC-90007-043-16-01.ppt

16

There are five key challenges in financial services

branding and marketing

Superior understanding of customers and target groups

Brands with systematic customer focus

Consistent international brand management

Internal brand engagement

External brand execution

Source: Roland Berger

MUC-90007-043-16-01.ppt

17

UNDERSTANDING CUSTOMERS AND TARGET GROUPS

Sociodemographics are loosing importance for

applicable consumer segmentations
Decreasing homogeneity of consumers example funds owners
Funds owners 1996

Funds owners 2006

Consumer group with largely

homogeneous sociodemographics, e.g.
Age
Household net income
Household size
Marital status
etc.

Inhomogeneous sociodemographics
diversity of sociodemographics within
consumer group is constantly increasing1):
Age
+ 42%
Household net income
+ 98%
Household size
+ 25%
Marital status
+ 36%
etc.

1) 1997 to 2006
Source: Roland Berger; BCN Typologie der Wnsche 1997 - 2006

MUC-90007-043-16-01.ppt

18

UNDERSTANDING CUSTOMERS AND TARGET GROUPS

Values drive consumption behavior value-based

models allow to predict consumption behavior
Sociodemographic and value-based customer segmentation
Sociodemographic approach
female
35 years
Saleswoman
married
female
40 years
Saleswoman
married

TARGET GROUP:
"Female married
sales-personnel,
age 30-40 years"

female
32 years
Saleswoman
married

Similar sociodemographics,
different value sets
One target group

Value-based approach
male
48 years
Lawyer
single
female
33 years
Teacher
divorced
male
63 years
Engineer
married

TARGET GROUP:
"Traditional,
performanceoriented, costinsensitive
customers"

Different sociodemographics,
similar value sets
One target group

Source: Roland Berger; BCN Typologie der Wnsche Trend 07/08 (n=10,083; population 14 years and older)

MUC-90007-043-16-01.ppt

19

SYSTEMATIC CUSTOMER FOCUS

Customer focus is the silver bullet to allure the

most attractive customer segments
Impact of brand positioning on customer base example from Germany
Value profile:
Maximalists

Attraction of different bank brands

BRAND
PROFILE

Over-/Underrepresentation
of Maximalist

+80,0%
+1,3%

Maximalists

Rejection of
altruism and
purism, low
costsensitivity

Emotional
appeal,
progressive
performance

within bank
customer base

-58,7%
13,5%

within German
population

Source: Roland Berger; BCN Typologie der Wnsche Trend 07/08 (n=10,083; population 14 years and older)

7,6%

3,1%

7,5%
MUC-90007-043-16-01.ppt

20

SYSTEMATIC CUSTOMER FOCUS

Customer focus has greatly increased in recent

years balanced brand portfolios gain importance
Banking Germany,
development 2000 - 2007

KEY INSIGHTS

Dreamer
Humanist

Maximalist

Sparkasse

Deutsche
Bank

Minimalist

Traditionalist

Volks-/
Raffeisenbank

Hypo Vereinsbank

Citibank

Hedonist

Dresdner Bank
Individualists

Performer

Archetype

Brand positioning 2000

On the German banking market, a

strongly increasing customer focus can
be perceived
From 2000 to 2007, almost all brands
have significantly sharpened their
respective brand profiles and are now
much more focused on specific customer
Archetypes
In order to still allow maximum market
cultivation despite a more focused
customer approach, a balanced brand
portfolio becomes more important
Different sub-brands for different target
groups allow a broad market approach
without diluting the brand

Brand positioning 2007

Source: Roland Berger; Roland Berger Market Research; BCN Typologie der Wnsche

Brand migration
MUC-90007-043-16-01.ppt

21

INTERNATIONAL BRAND MANAGEMENT

Across the world, homogeneous consumer

segments exist but still, every country is unique
Split of consumer Archetypes per country [% in population]
Consumer
Type

Maximalist
Types

Hedonist
Types

Traditional
Types

Minimalist
Types

Typical
value profile
Short
Description

Maximalistic
Costinsensitive

Fun-seeking
Costsensitive

Traditional
Costinsensitive

Unpretentious
Serious
Minimalistic

GER

8%

10%

10%

13%

ESP

9%

10%

17%

10%

CZ

14%

20%

9%

9%

RO

21%

23%

5%

7%

CN

6%

25%

11%

19%

Source: Roland Berger; various market researches

MUC-90007-043-16-01.ppt

22

INTERNATIONAL BRAND MANAGEMENT

Successful international brands display a consistent brand profile with only minor differences
Nike United Kingdom

Nike Portugal

Nike Germany

Highly consistent brand profile across the different countries minor differences
in value perceptions and intensities
Source: Roland Berger; Ipsos, Metris, Emnid

MUC-90007-043-16-01.ppt

23

INTERNATIONAL BRAND MANAGEMENT

International brands need an international position

some brands are consistent while others are not
Examples for international financial services brands
BRAND A (ESP, POL, RO)

ESP

Highly consistent
brand image across
the different
countries:

BRAND B (AUT, CZ, HUN)

AUT

Rational brand
focus

POL

RO

Focus on
efficiency,
innovation and
quality
Self-conscious
premium pricing

Source: Roland Berger; various market researches

CZ

HUN

Very individual
brand image within
the different
countries:
Quality focus and
medium prices in
AUT
Efficient and
customized
solutions in CZ
Emotional
<Vitality>-focus
and premiumprices in HUN
MUC-90007-043-16-01.ppt

24

INTERNAL BRAND ENGAGEMENT

Excellent brand engagement starts with a common

understanding of the brand "mission"

E+

Thrill
Thrill &
&
Expression
Expression
Fair
Fair
Entertainment
Entertainment
Vitality
Vitality
Classic
Nature
Carefree
Nature Classic
Carefree
Clanning
Clanning
Cool
Tranquil
Cool &
& Trendy
Trendy
Tranquil
Purism
Purism
Security
Security
Smart
Smart
Shopping
Shopping
Total
Total Cost
Cost

Service
Service

Quality
Quality

Protech
Protech

Personal
Personal
Proven
Proven Efficiency
Efficiency
Customized
Customized

R-

R+

E-

E+

Thrill
Thrill &
&
Expression
Expression
Fair
Fair
Entertainment
Entertainment
Vitality
Vitality
Classic
Nature
Carefree
Nature Classic
Carefree
Clanning
Clanning
Cool
Tranquil
Cool &
& Trendy
Trendy
Tranquil
Purism
Purism
Security
Security
Smart
Smart
Shopping
Shopping
Total
Total Cost
Cost

RSource: Roland Berger

Service
Service

Quality
Quality

Protech
Protech

Personal
Personal
Proven
Proven Efficiency
Efficiency
Customized
Customized

R+

PROBLEM:
Different
understanding of
the actual brand
mission prevents a
consistent brand
positioning

KEY QUESTION:

E-

E+

Thrill
Thrill &
&
Expression
Expression
Fair
Fair
Entertainment
Entertainment
Vitality
Vitality
Classic
Nature
Carefree
Nature Classic
Carefree
Clanning
Clanning
Cool
Tranquil
Cool &
& Trendy
Trendy
Tranquil
Purism
Purism
Security
Security
Smart
Smart
Shopping
Shopping
Total
Total Cost
Cost

Service
Service

Quality
Quality

Protech
Protech

Personal
Personal
Proven
Proven Efficiency
Efficiency
Customized
Customized

R-

R+

E-

E+

Thrill
Thrill &
&
Expression
Expression
Fair
Fair
Entertainment
Entertainment
Vitality
Vitality
Classic
Nature
Carefree
Nature Classic
Carefree
Clanning
Clanning
Cool
Tranquil
Cool &
& Trendy
Trendy
Tranquil
Purism
Purism

"Who do we actually
want to be?"

Security
Security
Smart
Smart
Shopping
Shopping
Total
Total Cost
Cost

R-

Service
Service

Quality
Quality

Protech
Protech

Personal
Personal
Proven
Proven Efficiency
Efficiency
Customized
Customized

CUSTOMER SERVICE

MARKETING

E-

MIDDLE MANAGEMENT

SENIOR MANAGEMENT

Anonymous financial services example: "What does our brand stand for?"

R+
MUC-90007-043-16-01.ppt

25

EXTERNAL BRAND EXECUTION

A brand strategy has to be consequently integrated

into day-to-day business processes
Example: Implementation into day-to-day sales business
Target Value Proposition

Highest efficiency
and comfort
Excellent service
Promotion of vitality
Carefree services
Premium price
Source: Roland Berger

Implementation in services

Sales approach

We relieve the customers of work

and worries

"Don't worry we'll remind you of

the deadline "

We never communicate internal

problems towards the client

"No problem, we always do our

best to help you.

To greet a customer, we stand up

and call the customer by his/ her
name

"Good afternoon Mr. Smith. What

can we do for you today?"

We say friendly and supportive

good-byes

"I am happy that I was able to

help you, Mr. Smith"

We handle all customer inquiries

immediately

"We'll take care of that at once"

Swift clarifications: We make

precise appointments

"I will let you know by tomorrow

afternoon "

MUC-90007-043-16-01.ppt

26

EXTERNAL BRAND EXECUTION

and to be consistently implemented through all

elements of the marketing mix
Marketing implementation and results example from fashion industry
IMPLEMENTATION ACTIONS
Product/ Price

Store design

RESULTS
Profile 2003
E

Solidarity

Looks, styles and

cuts
Colors and quality of
fabrics
Accessoires
Prices

Communication

Distribution

Monobrand stores
Concept stores
Presence in wholesale
chains
Mail order business

Advertising campaign
PR activities
Testimonials
Event sponsoring

POS design
Key visuals
Product presentation
Store window themes

Prestige
Passion
Prestige
Passion

Fair
Fair

Thrill&
Thrill&Fun
Thrill&Fun
Thrill&
Entertainment
Entertainment

Vitality
Vitality
Classic
Classic

Nature
Nature

Tranquil
Tranquil

Purism
Purism

Carefree
Carefree

Clanning

Cool&Trendy
New&Cool
New&Cool

Security
Security
Service
Service
Quality
Quality

Smart
Smart
Shopping
Shopping

Profile 2007

Stimulation

24/7
24/7
Protech
Protech
Protech
Protech
Personal
Efficiency
Efficiency

Proven
Proven
Total
Total Cost
Cost

Price

Customized
Customized

Solutions

Store Design 2003

Store Design 2007

etc.
Source: Roland Berger

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C. The Moment of Truth for financial services

brands Summary

MUC-90007-043-16-01.ppt

28

SUMMARY

The moment of truth for financial services brands

elements of a paradigm shift
1

Superior understanding of customers and target groups values as the real drivers for
consumption behavior in financial services backed up with sociodemographic data

Brand positioning with systematic customer focus a brand for everybody will not be
sustainable in the future

Balanced international brand management international brands with consistent core

values and/or differentiated (national) brand portfolio

Internal brand engagement with a more focused brand positioning, systematic brand
engagement becomes the key success factor

External brand execution every element of the marketing-mix has to be aligned with the
target segments and the brand value proposition to maximize effectiveness and efficiency

Source: Roland Berger

MUC-90007-043-16-01.ppt

29

SUMMARY

The moment of truth for financial services brands

elements of a paradigm shift (1/3)

Superior understanding of customers and target groups values as real drivers for
consumption behavior in financial services backed with sociodemographic data
The (sociodemographic) diversity of customers is increasing. Values are the real drivers of
consumption they are stable, can be used for consumer segmentations and allow a reliable
prediction of consumption behavior. They are the real key to superior global marketing
strategies

Brand positioning with systematic customer focus a brand for everybody will not be
sustainable in the future
The positioning of a brand directly influences the customer base the silver bullet to allure
economically attractive consumers. As a result, a distinct increase in customer focus could be
observed in the financial services industry in recent years

Source: Roland Berger

MUC-90007-043-16-01.ppt

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SUMMARY

The moment of truth for financial services brands

elements of a paradigm shift (2/3)

Balanced international brand management international brands with consistent core

values and/or differentiated (national) brand portfolio
Basic value-based consumer Archetypes could be identified globally. Still, every country is
unique the distribution of the Archetypes varies greatly. International brand management
remains a major challenge for the future

Internal brand engagement with a more focused brand positioning, systematic brand
engagement becomes the key success factor
An excellent brand execution needs a common understanding of all involved parties ("Who
do we want to be?") and requires a stringent brand engagement process throughout the
whole organization

Source: Roland Berger

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SUMMARY

The moment of truth for financial services brands

elements of a paradigm shift (3/3)

External brand execution every element of the marketing-mix has to be aligned with
the target segments and the brand value proposition to maximize effectiveness and
efficiency
A consistent implementation of a defined brand strategy through the marketing mix and the
integration into all aspects of day-to-day business are the success factors for a consequent
brand execution

Source: Roland Berger

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32