In the differentiation game, customers need to see and believe that your organization is unique.  And that your uniqueness is relevant to them.

This is an elementary marketing rule. Ironically, many financial services advertisers continue to play variations of the same “unique” tune about superior customer service.  Admittedly, some ads are definitely more entertaining than others like this spot from ANZ in Australia.

But do customers actually believe service is a differentiator?  Where’s the beef? The fact that Canada Trust was open 8 till 8 put a huge stake in the ground and became emblematic of how a small trust company tries harder.

Service differentiation in many industries can be hugely disruptive. Porter has become famous for the way they treat travelers. While kudos to Porter for delivering on service it was not difficult to improve on the competition. Porter has done a superb job of branding the experience from check-in to boarding.

A brand is a promise kept. So don’t just tell customers you’re different – show them how you’re different and then tell them how you’re different.  Deliver on your promise over and over again.  This translates into superior customer service and a brand that is both talked about and trusted.

Recent research from the Reputation Institute shows that for the first time, Governance (ethics/transparency) was the most important dimension of Reputation for Canadian consumers

Source: The Reputation Institute

You might think that product performance outweighs everything else. Yet according to this research good governance is top of mind for consumers when judging the reputation of companies with whom they do business or trust their money.

Although the recession of 2009 has brought massive losses in corporate market value, the erosion of trust and strained relationships with employees and customers could ultimately be more damaging for business. Markets have become increasingly commoditized and consumer dialogue about corporate ethics becomes more dynamic as it spills from blogs to facebook to forums.

This means that corporate brands must connect with consumers on a deeper, emotional level. Consumer confidence and loyalty must be earned not just on performance but by everything you say and do.

Consumers are speaking directly to the corner office – it will be interesting to see which companies are listening.

Being liked is one way to build reputation in a commoditized industry.

In 2008 E*Trade featured a baby as a hero in their ads, suggesting the idea, “If I can do it, you can do it”. That first ad generated so much buzz that it became the start of a series of “talking baby” ads.

The marketplace in which E*TRADE operates is anything but child’s play.  E*TRADE also offers banking services, which puts it in direct competition with giants in the banking industry. Because of the banking operation, E*TRADE suffered losses on its subprime mortgage holdings.

Yet E*TRADE has been rated the “#1 online broker for the third straight year,” as determined by Smart Money magazine. And the company had a net gain of 115,000 new brokerage accounts in 2009.

The latest Nielsen numbers show that financial services lead in brand ad spending. We can understand a mortgage rate promotion for house buyers but image based advertising? We’ve all seen those nice fuzzy feeling ads that show how banks are helping people “make sense” of their money. Why are banks spending $34.5 billion on this kind of advertising? And what is it doing for them?

Do clichéd images of confused people generate confidence and trust in a bank? Simply reminding consumers of what they need from a bank doesn’t build meaningful relationships. At the least, consumers expect competitive rates and excellent customer-service.  Consumers already want to do better with their money. Instead, they need to hear how you can be doing better with their money and ultimately, why they would trust you with their money. Before spending money on look alike advertising, financial services firms should consider how they can build trust while differentiating themselves.

There are brand police everywhere. Even though this ad pokes fun at the obvious hypocrisy of Ally bank, there is something to say for being forthright and honest.  When your corporate claim is doing the right thing eventually you’re going to be outed so you might as well out yourself.

The power of a brand’s profit potential hinges entirely on the degree of influence the brand has in consumers’ purchasing decisions.

When customers, clients or advisors invest their money with you they are expressing their trust in your company. Unfortunately, few financial institutions have provided a clear and compelling argument for why they should be trusted. Your ability to attract assets is directly related to how people feel about you as a company as much as they may be attracted to the past performance of your investment products.

Recently a report in the NY Times sheds some light on the relationship of trust to your bottom line.  Forrester’s annual Customer Advocacy rankings, ranks nearly 50 financial services firms in the United States by the percentage of each firm’s customers who agree with the statement: “My financial provider does what’s best for me, not just its own bottom line.”

So if trust in your brand is so important to your bottom line, why is that Banks are routinely ranked lowest in terms of customer advocacy or trust. The bottom seven of this year’s rankings, first to last, are Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank, and in last place, HSBC.

“Customers feel banks are preoccupied with their bottom line. They are public institutions who are in business to make money for their shareholder and inevitably, that shows to customers,” Forrester vice president, Bill Doyle said.

Customer advocacy/trust rankings are a predictor of customer retention and attrition, and customers who rate their financial institution high are more likely to consider their firm for additional products. In contrast, customers who give their banks a low ranking are most likely to switch in the next year and are “going to be reluctant to put any more money and open new accounts at those institutions,” Mr. Doyle said.

Every financial services firm should consider how they can build trust in their brand and not rely on flogging historical investment returns or low introductory rates. These are not the way to build a sustainable competitive advantage. Doing the right thing for your customer, your employees and society is essential. And effectively communicating your values to customers, clients and advisors will make a huge difference in growth, retention and your bottom line.

The TD Great Canadian Shoreline Cleanup has now grown into the second largest cleanup in the world, powered by Canadians, this program allows people from all regions and all walks of life to make a positive difference to their environment. Last year alone, over 63,000 Canadians registered for the TD Great Canadian Shoreline Cleanup.

“At this stage in the economic cycle, the service sector should be sprinting into recovery, not limping as it is now. And the missing ingredient is the consumer.” Michael Gregory, BMO Nesbitt Burns Economist

For better or for worse North America’s economy is a consumer driven economy. And that means that jobs in retail, service and (still) manufacturing are dependent on advertising to stimulate consumer spending for Coke, condominiums, cars or snow blowers.

Traditionally, advertising has been a driver of consumer demand. Blamed for making needs out of wants, advertising, the art of persuasion, has helped create the consumer-driven economy.

If you believe that advertising is persuasion and that persuasion generates economic activity, it comes as no surprise that advertising spending and economic declines are congruent:

Global advertising spend is expected to drop 5.5 percent in 2009, more than previously thought, before a mild recovery begins in 2010, according to a new forecast. (Reuters, June 2009). 

Clearly nobody needs a Lexus but advertising has created a viable luxury brand. The first Lexus to be made outside Japan was built in Ontario. Lexus sales mean more jobs for Canadians.

With the Adwomen’s Ball on Friday, January 29 we concluded National Advertising Week in Canada. I hope you had the opportunity to attend at least one event.

During 2010 Advertising Week it really felt like Canada’s ad industry was a community. Every day there was some event that was vying for our attendance and attention.  And from an agency CEO perspective it was a time competitors put down their swords and got to know each other.

A high point for me was the lunch with, and formal introduction of Bobby Kennedy Jr. to the crowd at Leading Social Change on Tuesday. Having grown up in the U.S. during the presidency of JFK and RFK’s run, it was the equivalent of hanging out with the Royal Family.  And of course Bobby’s speech – rant – was passionate, informative, and inspiring.
You can find out a lot more about the event (videos, slides, etc.) at leadingsocialchange.ca

Some of the low points were the interminable panel discussions.  I am not very patient listening to a bunch of self-anointed pundits expressing their views on the world of media and advertising.  We need sharp points of view. Can we eliminate these next year?

Another personal high was modeling in the fashion show at the Adwomen’s Ball! It was definitely a unique moment and a career first for me. Glad it was for a good cause.

Have we come to an understanding the origin of the power of social media? Well one way is to think of it as word of mouth. We’re sharing opinions through Facebook, Twitter, email, blogs and forums.  Sometimes that’s proactive as when we enter a conversation and interject our opinion.

Social Media is another source of information or influence But it/s likely that what your gearhead brother in law tells you about cars will likely influence your next car purchase (for or against) more than what you see on Facebook or a forum.  But it works both ways.

Recently when researching a health drink pitched to Moms we found this bit of wisdom:

“The power of word of mouth is more defined by the affinity for and trust of the information source rather than online versus offline means of interaction,” Laura Fortner, senior VP, marketing and insights at CafeMom, said in an e-mail interview. “You can have an offline recommendation made by a stranger in a grocery aisle that may not be as powerful or impactful as online recommendations made by someone in your social network with whom you share common interests, values and experiences.”

But if you fear the influence of unbridled social media consider the debate going on in the U.S. between Big Pharmas and the FDA. The lack of regulatory guidelines for marketing via tools such as Twitter, Facebook, blogs and websites, came to a head in April of this year when the FDA sent warning letters to 14 companies for search-engine ads that the FDA said violated regulations regarding presentation of fair balance.

PhRMA, the industry association, is advocating for a universal safety symbol — either the FDA logo itself or an FDA-approved symbol — to indicate that a Twitter or Facebook mention links to a page that contains the pharmaceutical company’s FDA-mandated risk information.

Big Pharma wants to continue to use the social media space build word of mouth for their drugs. Online consumer communities want to continue to investigate themselves and talk to each other about the safety and efficacy of drugs.  Can they filter out Big Pharma without the help of their doctor or pharmacist or Big Brother? Who do you think is right? What would you suggest?

Mr. Sub has fired its agency BOS after the sandwich chain was accused of promoting homophobia in its latest advertising campaign.

“WWF Brasil and DDB Brasil would like to jointly express their regret for the unfortunate incident involving the ‘Tsunami’ ad for World Wildlife Fund Brasil.”

These controversial ads deemed in bad taste have resulted in one agency being fired, two clients making public apologies and untold damage to their brands.

Both ads were approved by the client. So how do we let ads that attract a storm of criticism get on the air or into print or cyberspace?

There are a lot of effective ads that in some eyes would be considered offensive or stupid (AXE). And there are controversial ads (Benetton) that generate debates about their commercial intent and sensitivity.

An ad becomes a nightmare when it contravenes your brand. It clashes with the values of your brand or your company’s values or those of your organization. And then as soon as it gets out, it gets pulled.

If you’re a client this is your worst nightmare. So I don’t want to consider the poor judgment of these ads but to speculate on how they got approved and more surprisingly put on air, on a website or in print.

Many ads are presented every day that are just plain silly or in bad taste. Most get killed by the agency or the client. Others die in research but a few make it past these screens.

Why do silly ads or ads in bad judgment even get presented? Sometimes the creative director doesn’t filter ads from other teams and will present, with conviction, ads that probably are off strategy or off brand to demonstrate the team’s range of thinking. But usually your creative director pushes the ad believing from his or her perspective that the ad represents powerful advertising. And when you question the IQ of an ad you’re likely to hear: “You’re not the target audience.”
So how can you face up to pressures like that when you question the wisdom of an ad? You must put your brand’s or company’s values first. If you are basically uncomfortable with what is being depicted or said, you should consider whether to allow it to run. Because when the ad runs and you are asked to pull the ad, you need to defend the ad as being right for the brand.

Axe deodorant runs consistently irreverent and often very sexist ads. This brand speaks to guys. Axe ads are clever and appealing to this target. The brand and the ads are synonymous and they work at that level.

When Puretracks launched Canada’s first legal music download service we ran a series of ads that put music in juxtaposition with the concept ‘pure’.  The billboard for “pure rock”, showed a baby wearing Kiss make-up. “Pure hip hop” showed a woman in a nun’s habit revealing some cleavage and wearing bling.  This irreverent approach worked within the music community and the client agreed. The ad stimulated a wave of criticism from Catholic youth groups but the client stood his ground. Eventually the campaign ended but not after a lot of discomfort and threats of legal action. (Puretracks continued to operate until it was sold 6 years later.)

What to do? If the ad presented to you makes you feel uncomfortable but the agency insists this is the best approach, there are a few things you need to do. First ask yourself if the ad fits the values of your key customer segments and your brand. If the ad gets negative publicity are you prepared to hold your ground and stand up to the critics? If you can answer yes to both questions go ahead. Prepare an issues management plan to defend the ad. As further insurance you can test the ad in focus groups to make sure the humour or irony in the ad is indeed relevant to your customers.

Clients want edgy advertising that people talk about. With risk comes reward. Courageous clients are celebrated by agencies. Just be prepared to deal with the risk.

Were you ever asked to approve an ad that made you squirm?  What did you do? What happened?

“Well I’d have to convince the other guys to spend the money on our brand. We sell to purchasing agents not consumers. And by the way, let’s not use the brand word in front of the boss.”

This sums up a conversation I had with the senior public affairs manager at a large industrial corporation. The company is the biggest in its sector in Canada and they are ubiquitous in their industry. They’re winning contracts and their financials look good. Why should he care about their brand?

Canadian banks have weathered the financial storm and are on track to make record profits.  They have little reason to worry about their corporate brand.

A leading manufacturer of floor covering sells great products at competitive products. They sponsor all the right environmental groups. People know all about their products. Why did they want to talk to us about their brand?

Why would any company take money out of their shareholder’s pockets or the bonus pool and invest it in their corporate brand?

Today companies are transparent. The digital world is fundamentally bringing companies’ core values and products closer to their consumers in both positive and negative ways like never before.

How people feel about a company can determine it’s future business success.  Our research shows that 2 out of 10 customers make purchase decisions on the basis of how they feel about the company behind the product or service.

The initial success of Saturn showed how a car company brand could sell cars. Saturn launched with “A different kind of company, a different kind of car”. And the brand took off with an unheard of passion for an American car brand, legendary stories of Saturn owner gatherings and tales about the care and devotion of the men and women who built the cars. The brand was as much about the company as it was about the cars. But GM forgot about the power of the brand.  New models were inconsistent with the values of Saturn customers. Labour problems ensued and the Saturn brand was gutted.

So that’s ok for consumer brands but why would any company that sells to other companies want to imbue its name with values and vision? Because purchasing agents want to buy from known companies. Politicians want contracts to go to companies that give back to the community.  And anyone making a large purchasing decision needs to feel that the company they are buying from can be trusted.

Have you tried to talk brand within business-to-business companies? How successful have you been at convincing your company to invest in its brand? I’d love to hear your stories.

If you watch CNN or golf on American networks you’ve undoubtedly seen corporate advertising for IBM, HP, HSBC etc. And usually it’s an anthem about the wonderful things this company makes or does for the world.

Lots of corporations must think corporate advertising works because they spend millions on this genre. For me most advertising like this is not engaging. It does little to make me feel better about the company (I can only imagine it must play beautifully on a big screen in the executive boardroom.).

A case in point: RONA, the Canadian home renovation supercentre, has made a commitment to be a leader in sustainable development through the sale of eco-responsible products, its paint recycling initiatives, and its new policies on pesticide sales and wood products procurement. In doing so it has developed a consumer friendly theme “Doing it Right” to replace “The Canadian How-To People” as the company’s new signature line.

That’s great stuff. With all the wood products, glues, plastics etc that are sold in home renovation centres, a real commitment to corporate social responsibility is certainly needed.

But do you need to spend advertising dollars telling people that you’re a good citizen? RONA thinks so:

“The campaign’s series of dynamic messages are designed to enhance RONA’s visibility and ensure our innovations in the area of client experience are better known,” said Claude Bernier, RONA Executive Vice President, Marketing and Customer Innovations.

Still good stuff. Why shouldn’t your customers know you’re committed to the environment?

Above: Mixed message. Rona’s billboard campaign – hmm… using a billboard for advertising may not be as environmentally friendly as the message on it! 

Here’s the problem. By patting yourself on the back, you’ve fallen into the same trap of self-congratulatory advertising that you see on CNN or on tennis and golf matches every Sunday. By advertising your environmental record on billboards and newspapers you might even be accused of ‘green washing’ by those who really should like you most.

If you do good things and you want to tell the world about it, you must have Permission to Advertise™. Simply stated, there needs to be an engaging reason to spend money to advertise your involvement in a cause. What if, say a bank ran an ad on TV saying, “Doing it Right –­ We­ support Sick Kids?”  What would be your reaction? Probably “Good on you…. but wait a second….you just spent $50,000 on that spot in prime time – plus production costs, to tell me you support Sick Kids? Why don’t you just give that money to Sick Kids?” Like in the case of RONA, don’t run ads telling me you’re doing the right thing. Just do the right thing and save the advertising for your next DeWalt tool sale.

That’s the paradox. Don’t spend money to tell people what a great citizen you are. Because it begs the obvious. And consumers are not stupid. If asked they’d tell you that if you want to be a good citizen, they’d rather you spend your advertising dollars on the causes you support.

We identified the concept of Permission to Advertise™ during weeks of advertising testing about 10 years ago. The Government of Ontario (under Mike Harris) wanted to win back voters by telling them that they were committed to building new hospitals, hiring new nurses, opening new ERs etc. Nice ads. Earnest ads full of busy doctors and nurses.  But every single group who participated in the testing saw right through it. Every one. They’d say: “Why are you telling me this? Why are you using my money to tell me this?” In fact, the ads had a negative effect: approval for the government dropped after seeing the ads.

This attitude towards self congratulatory advertising exists in the corporate world too: “I am a shareholder. Why would you spend my money promoting yourself to me?” So at the end of the day, an ad that was meant to grow trust and confidence ends up having the opposite effect.

Permission to Advertise™ simply means, don’t advertise unless you clearly convey a purpose for the advertising other than promoting yourself. Trust and confidence are earned by good work, not by advertising.

If you are guided by Permission to Advertise™, you can build your brand reputation by advertising if you involve your brand and your customers in citizenship practices and activities. With government advertising, we moved quickly away from self-promoting ads (patronage advertising in Ontario is now policed by the Auditor General). Instead, we ran ads promoting the flu vaccine and other tangible programs. And guess what? Favorability for the government spiked when these ads were tested. They had Permission to Advertise™. The ads were a useful public reminder. They had a real purpose and their cost was justifiable.

Toyota enjoys the best environmental reputation among carmakers. They didn’t get there by running ads telling people what a wonderful company they are. They committed themselves to hybrid cars, even though they lost money on them. So what does a Prius ad do for Toyota? It helps them sell all their models. While it may seem to be an ad for a Prius, correctly or not, Prius advertising tells car buyers that Toyota leads all car manufacturers in its environmental concern and actions.

RONA should promote the heck out of their paint can recycling program. It’s a great way to get people to their stores. Ads that inform the public of the program give Rona Permission to Advertise™. And by doing so, they say we’re “Doing it Right”. The right way.

Do you agree with Permission to Advertise™? I’d love to hear your thoughts.