Invisible Brand

Paul Gordon thinks that the country’s remaining building societies have a surprisingly strong story to tell.

Most have ageing and generally downmarket customer bases, old-style branch loyalists who pop in on a Saturday morning as a social experience as much as a financial one.

Market Harborough, Stroud, West Bromwich, Coventry, Swindon, Peterborough, Leeds, Skipton, Chesham, Barnsley, Norwich, Holbeck, Dunfermline – not, you have to say, the most poetical list of British towns.

But coherent in one way: the name of all of these towns and cities still appear in the names of some of the country’s 90-or-so remaining building societies.

With the obvious and unmissable exception of Nationwide, and the slightly-less-obvious exception of the Britannia, these are now all smallish and virtually all regional organisations. And although there are some hugely impressive success stories among them – the Skipton being particularly highly-regarded – it would be fair to say that taken as a whole, they represent a more-than-somewhat troubled sector.

I know nothing about their business and financial challenges. I couldn’t tell you anything about their cost of funds, or access to capital. I couldn’t even – perhaps more importantly – say whether or not they’re in a position to invest in their future success and development.

But as far as their brand, marketing and communications challenges are concerned, I can say that most of them have a great deal in common.

Many have some difficult problems in common. One of the most serious is that few have managed to extend their credibility and popularity into today’s younger generations. Most have ageing and generally downmarket customer bases, old-style branch loyalists who pop in on a Saturday morning as a social experience as much as a financial one.

Talking of branches, and without straying into alien corporate-planning territory, few have been able to invest in their networks. There may be a couple of flagship home-town branches, but beyond these it’s generally a picture of small, dilapidated premises which somehow never seemed to quite get round to implementing the last visual identity review. Or, in some cases, even the one before that.

Along with this – and clearly connected to it – even those with tightly-defined geographical heartlands find it hard to deploy the kind of weight of communications firepower required to match the share of voice of their national rivals. When it comes to TV advertising, some regional building societies are lucky – our own clients at the Derbyshire, for example, can cover a very high percentage of their heartland by means of the extremely low-cost East Midlands ITV transmitter, and the Stroud & Swindon and the Norwich & Peterborough are similarly fortunate. But others are much less so, and of course everyone has difficulty accessing targeted, good-quality print media.

Factors like these give the impression that as far as winning and retaining customers is concerned, regional building societies are at a big disadvantage compared to their national bank, mortgage bank and even building society competitors.

But in fact, I would argue that their advantages and opportunities far outweigh their weaknesses. Here’s a grab-bag of half a dozen positive points, in no particular order, some entirely separate and some overlapping, which I think add up to a pretty strong position.

1. These are among the country’s few remaining mutual organisations. Some people doubt that mutuality is a meaningful benefit to consumers. True, the word isn’t meaningful in itself. But in these ever-more distrustful times, an organisation which can’t make a real benefit out of the fact that it’s owned by, and answers only to, its customers frankly deserves everything bad that happens to it.

2. Most enjoy a huge fund of goodwill in their heartlands. Again, this point isn’t completely positive. Too often, the goodwill is concentrated more among older and less affluent consumers. And it certainly isn’t strong enough to offset shabby premises, unexciting products and poor marketing. But, my goodness, these days any financial institution which finds itself in the credit column rather than the debit column as far as goodwill is concerned should count itself very fortunate.

3. By and large, the staff are loyal and lovely. No offshore call centres. No saboteurs and enemies within. Just extremely nice people who the customers enjoy dealing with.

4. Short lines of communication, and simpler decision-making. Good for customers – for example, mortgage customers wanting decisions – and also good when it comes to corporate decision-making. The Skipton stands out as one of the most entrepreneurial businesses in UK financial services: no doubt its size has helped it overcome the labyrinth bureaucracy that paralyses so many bigger players.

5. Everyone is the same size on the Internet. Considering the amazing power and potential of the Internet, most of all for small organisations that want to extend their reach beyond their heartland, it’s disappointing to see how little regional building societies have yet made of it. Why isn’t everyone in the émigré Welsh community doing business with the Principality? It can only be a matter of time.

6. Their communications needn’t succumb to lowest-common-denominatorism. Big national organisations have to try to be everything to everyone. Small regional organisations can be much more targeted, much more focused, much more relevant. I must say I’m not aware of many which have seized this opportunity – budget pressures still tend to mean that the communications of most are amateurish, crudely-executed and slightly embarrassing – but it’s there for the taking.

I’m sure I could think of plenty more advantages and opportunities if I tried, but this list seems to include more than enough to be going on with.

I don’t think there is yet a really great case history of a regional building society with the energy, creativity, confidence and commitment to reinvent and reinvigorate itself within its heartland. It’s time there was.